Enphase hosted an official event today in Guadalajara, Mexico to celebrate an ongoing partnership with Flex Electronics Manufacturing that has resulted in a new microinverter production plant and business growth across the country. More than just a marquee moment for Enphase, the U.S. Ambassador to Mexico participated to showcase the positive impact of investment and trade between the two nations.
While Enphase has been active in Mexico since 2010 through installer partnerships, product distribution, and customer support, activity escalated in 2019 in response to Section 301 tariffs on inverters made in China. Beyond today’s official press release, there is much more to share about why
“Hecho en Mexico” truly matters and how we got there.
Section 301 tariffs drive manufacturing shiftIn September 2018, the Office of the United States Trade Representative (USTR) initially set a 10 percent tariff on inverters and alternating current (AC) modules that rose to 25 percent at the beginning of 2019.
Given the location of Enphase’s manufacturing with Flex at the time of the Section 301 tariff announcement, there would be certain impact on operations. Beyond the tariffs cost, the timing and magnitude of the tariffs also cast uncertainty on the solar industry.
“We can plan for the worst, expect the best, have scenario planning. But predicting precisely? It’s impossible,” said JD Dillion, VP of Marketing at Enphase, at a Solar Power International roundtable when the tariffs were first enacted.
As a result, Enphase worked with Flex to move production from China to the company’s Guadalajara facility in Mexico. Two years since the enaction of inverter tariffs, Enphase has invested over $20 million in capital investment and produced over 2 million “Made in Mexico” microinverters.
Mexico as a strategic partnerEnphase’s decision to move manufacturing to Mexico was the result of much more than U.S. import tariffs and the related uncertainty. The plant in Guadalajara, dubbed the Silicon Valley of Mexico, enabled Enphase to expand upon an existing foundation of more than 1,250 certified installers, over 20,000 customers, and a growing distribution network across the country.
There’s no doubt that the facility has made an impact on the Mexican economy by employing 650 employees across five high-tech production lines. Flex and Enphase now have the annual capacity to produce 4.4 million microinverters and 500,000 Envoy gateways and combiner boxes.
The Guadalajara plant is also making a positive impact on the United States market. The first “Made in Mexico” microinverters arrived during the first half of 2019 and the country is now the primary source of the latest products for customers. Moreover, Enphase now has the increased ability to mitigate trade policy risk and serve the U.S. market closer to home, all while maintaining a high-quality output.
The success of the new facility with Flex means additional investment is underway from Enphase. Several new Enphase products currently slated for 2020 and 2021 will be manufactured in Mexico and a new supply chain across the country is under development for plastics, metals, and packaging. We are confident that this will also translate to better supply for our installation partners, ongoing high-quality products for customers, and even more international collaboration.
Innovation as a key pillarEnphase will continue to push the boundaries of solar technology, both home and abroad, through ongoing innovation and advancement of our products. We are proud to be the leading supplier of microinverters in the world and we are excited to continuing growing operations in Mexico to serve customers around the world.
To read more about Enphase in Mexico, visit.