If we cast our gaze across the next generation, the smart money is on the over when it comes to global energy consumption compared to current levels.
According to BloombergNEF’s New Energy Outlook 2025, as sustainability transforms into the starting point for consumers and industry alike, electricity demand is expected to increase by 34 per cent over the next decade and by 75 per cent by 2050, representing record growth, saddling the electrical grid with unprecedented strain.
The strongest premise behind this thesis is electric vehicle demand, which a report by Bloomberg New Economy estimates to represent 4.6 per cent of total energy demand by 2035 and 11.2 per cent by 2050. Data centre and AI demand is also significant, growing from an estimated 4.5 per cent by 2035 to 8.7 per cent by 2050. Combined with manufacturing and air conditioning, these catalysts put electricity on pace to transform from “a supporting utility” into “the backbone of the global economy.”
In a bid to efficiently accommodate this transition, the International Energy Agency expects solar energy to account for about 80 per cent of the increase in renewable energy capacity through 2030, driven by decreasing costs and a more streamlined permitting process.
Unlike traditional electricity generation, which relies on fossil fuels, solar boasts no marginal fuel costs, meaning it costs nothing to produce electricity after panel installation and ongoing maintenance. This works out to the price of solar panels falling more than any investment good in recorded history, according to Goldman Sachs Research, besting both computers and all communication equipment. Leveraging this drop, the solar industry is expected to deliver 57 per cent growth from 2024 to 2030, when it will surpass 900 Gigawatts in installations, creating momentum that has propelled the Invesco Solar ETF (AMEX:TAN) to a 71 per cent year-over-year gain.
Despite solar energy’s robust growth runway, entrepreneurs keen to create value from it have a major obstacle in their way in the form of China, which controls more than 80 per cent of the global solar panel supply chain, and recently removed grid access for new large-scale commercial solar projects and opted to not provide minimum guaranteed prices for projects already online. Combined with the elimination of the US solar tax credit, as well as lower margins as technology prices continue to fall, the pathway for new entrants to compete on the global stage is significantly constricted, incentivizing large-scale players with reliable cash flow to step in and claim market share.
Enphase Energy’s glowing forecast
Investors after a solar energy provider actively treading this growth path, with the operations and financial track record to excel over the long term, should think about Enphase Energy, a mid-cap company based in Freemont, California, that ranks as the world’s largest provider of microinverter-based solar and battery systems.
While traditional solar panels convert sunlight into direct current (DC) and require a separate string inverter to convert DC into alternating current (AC) for consumption, Enphase’s microinverter converts DC to AC within each panel, using proprietary batteries and software to analyze performance data and optimize energy production, all while allowing clients to generate, use, save or sell their solar energy from a mobile app.
Enphase’s value proposition, backed by manufacturing capacity in the US and China, has been rapidly gaining traction over the past two decades, with the company shipping more than 86 million microinverters and more than 5 million energy systems to more than 160 countries since inception in 2006.
On the income statement, the company’s has ascending unit count has translated into exponential revenue growth, from US$264 million in 2020 to US$2.3 billion in 2022, though the figure fell to US$1.5 billion in 2025, reflecting a demand slowdown in Europe and ending subsidies in China and the US. Looking ahead, the near-term future is a bright one, with Wood Mackenzie expecting the US industry to pick back up in 2028 and Solar Power Europe expecting the bloc to return to form by 2030.
Throughout the post-COVID period, Enphase has also proven to the market that, although solar energy’s long-term tailwind remains highly sensitive to the regulatory environment, its business is attuned to and locked into profitability, increasing net income from US$73 million in 2020 to US$172 million in 2025. That said, the optics of net income being down from US$438 million in 2023, coupled with leadership’s forecast for slight margin erosion in Q1 2026 – reflecting reciprocal tariffs – may take a bite out of shareholder value.
This means that Enphase Energy stock (NASDAQ:ENPH), already down by 20 per cent year-over-year and 75 per cent since 2021, could be headed into deeper losses, despite almost tenfold market share growth and more than doubling net income since 2020, creating a value play scenario for investors who can look past short-term solar industry volatility, confident in leadership’s ability to scale into solar energy’s long-term tailwind, de-risked by internal cash flow, a multi-year track record of profitable growth and US$1.51 billion in cash, equivalents and securities as of Q4 2025.
While many investors steer clear of stocks near all-time-lows, choosing instead to feed their winners, others can recognize opportunities in the pessimism, finding conviction in their contrarianism, because all publicly available data shows it to be the rational decision. Although both philosophies are valid, presented with Enphase’s stark dislocation between sentiment and financial performance, the question is, which do you pledge allegiance to?
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