Tigo vs Enphase

A few days ago shares of ENPH and SEDG took a hit, apparently due to an analyst report saying they were losing market share to Tigo Energy (TYGO). I reflexively bought shares in Tigo, thinking that if it’s true, Tigo shares will trounce those of ENPH. I have a nagging feeling, though, that I should sell both ENPH and Tigo, because the dynamics of this relatively new industry are too complicated for me to understand.
For the moment, though, I thought I’d bring it to the group and see if any of you want to tell me why I am an idiot for buying Tigo shares. I acknowledge it’s risky since it’s such a new and unproven company, and someone with a lot more resources than I have is paying me an obscene borrow rate to short my shares, but I like what I see so far.
Yes, Tigo is a former SPAC, but I suspect a few former SPACs are going to blow the market away because I think the negativity around SPACs is probably overdone. Here is Tigo’s revenue history.
Q2 23 70-74M (GUIDE)
Q1 23 50.1 M
Q4 2022 31M
Q3 2022 22.8M
Q2 2022 17.6M
Q1 2022 9.9M
Tigo is more expensive than ENPH, but given the superior growth rate, that doesn’t seem worrisome. I went through a recent Tigo investor presentation, and they do claim to be taking share, saying they are cheaper and more efficient. Cheaper and more efficient seems good in the age of inflation, especially after ENPH’s U.S. sales have weakened as higher interest rates have made financing less attractive. ENPH does not address market share, instead focusing on its increasing “share of wallet per home,” which feels a bit squishy and backward-looking to me.

Regarding the analyst report, I haven’t been able to find an article I saw earlier mentioning the market share gains of Tigo at the expense of ENPH and SEDG, though this one citing two recent bullish initiations of coverage, alludes to it.
I currently have about 6% in ENPH and 2% in Tigo.


From my quick research in last 30 mins, Tigo’s approach is akin to Solar Edge approach which is a power optimizer. I do not see this as a mortal threat to Enph.

Link to investor presentation:


Tigo Energy went public by a reverse merger with a SPAC on May 24.

As an Enphase Killer it will probably have the same fate as a dozen Tesla killers have experienced. It’s not so much about technology as about adoption and Enphase has a very dedicated band of solar installers.


The Captain


I would agree but not for the reasons mentioned in the article. For installers (those in OH that I have spoken with), the key is that the microinverter converts DC to AC at the panel on the roof. The rules for transmitting DC vs. AC current are different and there is an advantage to be transmitting AC wtr conduit, shielding, etc. Tigo/SolarEdge transmit DC into the house whereas ENPH transmits AC.


The micro-inverter converts DC to AC at the panel making all panels independent of each other. A power optimizer is a palliative by comparison.

For the solar energy system, one can choose from three different types of inverters: string (also known as centralized) inverters, power optimizer systems (also known as string inverters + power optimizers), and microinverters. “Module-Level Power Electronics” or MLPEs are a general term for microinverters and power optimizers.

The Captain


Tigo sells inverters. Or am I missing something? Are you saying their inverter is inferior? As I have stated previously, this topic is pretty technical which is making me feel like I ought to avoid ENPH and Tigo altogether. But I haven’t gotten rid of them yet. I still have a 5% ish position in ENPH and a 3%ish one in Tigo. At least with Tigo, the revenue growth is moving in the right direction. The main thing keeping me in ENPH is that several on this board who I think are wiser than I are in it and the insider buying in the 150s that followed the plunge of the shares after the last earnings release.


Solar panels generate DC current which needs to be converted to AC which is what utilities provide via the grid. There are several alternatives architectures to get it done. My point was that Tigo does not sell micro inverters which convert DC to AC at the solar panel itself. Tigo collects the DC from several panels through an optimizer and then they convert the ‘optimized’ DC to AC further along the system.

Micro inverters are the most efficient architecture but they are also more expensive. Everything is a trade-off.

In my opinion having a great team of installers is more important than the efficiency of the architecture of the installation.

When it comes to stock picking it is usually best to go with the market leader. They are the leader for some good reason but they can be dethroned.

Denny Schlesinger