SolarEdge to shut down energy storage division, cut jobs

SolarEdge has announced the closure of its energy storage division.

The decision, which will result in the loss of approximately 500 jobs—mainly in South Korea—is part of a strategic effort to streamline operations and focus on the company’s core solar business. SolarEdge expects to save $7.5 million in quarterly operating expenses starting in the second half of 2025.

Interim CEO Ronen Faier described the move as the result of a detailed analysis of the company’s product lines and market trends. “The decision to close our Energy Storage division was the result of a thoughtful analysis of our portfolio of businesses, industry trends, and the competitive environment,” Faier said. The closure, he added, supports the company’s goals of reducing costs, improving cash flow, and prioritizing solar, photovoltaic (PV)-attached storage, and energy management systems.

Significant Costs and Strategic Shift

SolarEdge Technologies Inc. is a provider of power optimizer, solar inverter and monitoring products for photovoltaic arrays. These products aim to increase energy output through module-level Maximum Power Point Tracking.

SolarEdge reported it will incur pre-tax charges of $81 million to $99 million related to the closure. These expenses include inventory write-offs, non-cancelable purchase orders, and severance packages. Despite these immediate costs, the company views the move as necessary to bolster long-term financial stability.

The company also plans to sell its energy storage-related assets, including battery cell and pack manufacturing facilities. However, SolarEdge clarified that the decision will not affect its ability to supply batteries for residential and commercial markets, which it will continue to offer through third-party manufacturers.

Background and Industry Context

SolarEdge, founded in 2006, initially specialized in DC power optimizers and later expanded into inverters and monitoring technologies. It entered the energy storage market in 2015 with its StorEdge battery-compatible inverter and enhanced its capabilities with the 2018 acquisition of a South Korean lithium solutions provider.

However, heightened competition and shifting market dynamics have made the energy storage business increasingly challenging.

The closure follows a year of workforce reductions, including the layoff of 1,300 employees earlier in 2024. SolarEdge’s workforce stood at 5,633 as of the end of last year, with 725 employees based in South Korea.

Market Reaction

News of the division’s closure led to a more than 3% rise in SolarEdge shares during premarket trading, reflecting investor approval of the cost-cutting measures.

SolarEdge’s decision underscores the challenges faced by renewable energy companies in balancing growth ambitions with financial sustainability. While the closure marks a significant shift, the company remains focused on its core strengths in solar and energy management technologies.