SolarEdge Misses Out On Rebound, Loses Key Tax Credit Advantage: Analyst

SolarEdge Technologies SEDG shares are trading lower after GLJ Research analyst Gordon L. Johnson II downgraded the stock from Hold to Sell.

With SolarEdge still struggling in the U.S. and European markets, many solar pundits expected the Senate to extend the company an “olive branch” in the form of a revival of the 48E 30% tax credit for solar companies, Johnson II noted.

However, the analyst learned that SolarEdge is not in danger of such a fate, with several headwinds pointing to problems on the horizon.

Also Read: Behind SolarEdge’s Surprise Beat: A Rebound Story Investors Can’t Ignore

From the language in the Senate’s version of the tax-and-spend bill, Johnson II noted U.S. residential solar finance companies would no longer have the ability to sell tax credits to third parties via owned leased systems or PPA-based systems, marking a potentially existential threat to the solar finance companies reliant on inflating the value of their solar systems to claim higher tax credits and the 45 times credits for solar production were left unchanged, marking an incremental positive for First Solar.

While Johnson II did not have data for the second quarter of 2025, he did have California Solar Initiative data for April 2025.

The analyst noted that the April 2025 CSI data dump rests with the idea that while select solar companies did benefit from demand pull-forward in the second quarter of 2025, SolarEdge was not among the companies that saw a surge in fundamentals. In the inverter area, he said that while aggregate California inverters sold were up +23.0% Y/Y in April 2025, SolarEdge’s sales over the same timeframe were essentially at +2.3% Y/Y.

Price Action: SEDG shares are down 34.4% at $15.74 at last check on Tuesday.

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