SolarEdge Lays Off 500 Employees, Closes Energy Storage Division to Save $7.5 Million

On November 27, 2024, SolarEdge Technologies, a global leader in smart energy technology, officially announced its decision to terminate all business activities in its energy storage division due to poor company performance. This move is expected to result in the layoff of approximately 500 employees, around 12% of the total workforce, with most of the affected employees based in South Korea leaving in the first half of 2025.

The closure of the energy storage division is anticipated to save the company about $7.5 million in operating costs each quarter, and operations are expected to fully recover by the second half of 2025. The company plans to sell assets related to the energy storage division, including its battery cell and battery pack manufacturing facilities, but this will not affect its solar business regarding battery sales in the residential and commercial storage markets.

This decision comes amid a challenging market environment, particularly in the U.S., where high interest rates have led to a decrease in demand for residential solar power systems. Consequently, SolarEdge is facing rising inventory levels and expects its profit margins to remain under pressure.

Ronen Faier, the interim CEO of SolarEdge, stated, "The decision to close the energy storage division is based on a thoughtful analysis of the company's business and product line mix, industry trends, and competitive landscape. These measures reflect our commitment to continuing to focus on two main priorities: achieving financial stability through cost reduction, restoring positive cash flow and profitability, and concentrating on our core business lines of solar, photovoltaic storage, and energy management capabilities. I sincerely thank the employees of the energy storage division for their relentless efforts in building this business."

It is noteworthy that the company's sales and earnings in the third quarter fell far short of expectations. Additionally, SolarEdge reported a net loss of $15.33 million in the third quarter, compared to a loss of $0.55 million in the same period last year, with revenues decreasing by 64% year-on-year to $260.9 million.

SolarEdge previously developed an intelligent inverter solution that revolutionized the way electricity is collected and managed in photovoltaic (PV) systems. SolarEdge’s DC optimized inverters are designed to maximize energy production while reducing the energy costs generated by PV systems, meeting the needs of a wide range of energy market segments through its solar, storage, electric vehicle charging, battery, and grid service solutions.