SolarEdge Closes the Energy Storage Division

28 November, 2024

This decision will result in a workforce reduction of approximately 500 employees, most of whom are in South Korea. The market sent SolarEdge stock price 8.5% up

Photo above: SolarEdge’s “Sella 2” plant, a two gigawatt-hour (2GWh) battery cell manufacturing facility in Korea

SolarEdge Technologies announced today that as part of its focus on its core solar activities, it will cease all activities of its Energy Storage division. This decision will result in a workforce reduction of approximately 500 employees, most of whom are in South Korea. The expected quarterly operating expenses savings due to the closure are approximately $7.5 million with the full run rate expected to be achieved by the second half of 2025.

The Company intends to sell the assets related to the storage division activities including its manufacturing facilities for battery cells and packs. This does not impact the solar business sale of batteries for residential and C&I markets. Ronen Faier, Interim Chief Executive Officer of SolarEdge, said: “The decision to close our Energy Storage division represent continued execution of two of our main priorities: financial stability  and profitability; and focus on our core business lines of solar, PV-attached storage and energy management capabilities.”

The activity in Korea is based on Kokam, a local producer of Lithium-ion battery cells, batteries and energy storage solutions, which was acquired by SolarEdge  in 2018 for approximately $105 millions. Following the acquisition, SolarEdge opened in May 2022 Kokam’s second plant, “Sella 2”, a two gigawatt-hour (2GWh) battery cell manufacturing facility. The manufactured battery cells for SolarEdge’s residential solar-attached batteries as well as battery cells for a variety of industries, including mobile, energy stationary storage solutions and UPS.

Ending all Non-solar activities

During 2023 , SolarEdge continued to ramp up the manufacturing capabilities in Sella 2, and planned to gradually increase its manufacturing capabilities during 2024. The current descision marks an historic moment for the company: the completion of the exit from all the non-solar activities, such as UPS, e-Mobility and battery cell productions. The non-solar activity never took off and had remained bewlow 10% of total revenues.

At its peak, in 2023, it had reached $200 million sales, when total sales surepassed $3 billions. During the first nine months of 2023, Kokam’s sales totaled $51.9 million, out of  SolarEdge’s $730.7 millions sales. The market reacted to the news by sending SolarEdge stock price on NASDAQ 8.5% up, giving the company a market cap of approximately $861 millions.

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Posted in tags: PV , Solar Energy , SolarEdge