SolarEdge Targets $2.4B by 2029, Bets on AI Data Center Power Growth

Key Points

• SolarEdge is targeting $2.4 billion in 2029 revenue, including $1.8 billion from its core solar business and $600 million from AI data-center products, with a projected 35% gross margin and 18% adjusted EBITDA margin.
• The company is prioritizing solar-plus-storage growth, leveraging a residential base of more than 4 million sites—about 90% without batteries—and expanding its commercial and industrial rooftop market share.
• SolarEdge plans to develop solid-state transformers for 800-volt AI data-center power systems, targeting product pilots in 2027 and initial revenue in 2028; however, it acknowledged it has no firm orders yet for the projected AI-factory business.

SolarEdge Technologies NASDAQ: SEDG outlined plans to expand its residential and commercial solar business while pursuing a new power-conversion opportunity in artificial intelligence data centers, targeting $2.4 billion in revenue and a 35% gross margin by 2029.

During the company’s Investor Day, SolarEdge said its projected 2029 revenue would consist of $1.8 billion from its core business and $600 million from AI-factory products. The company said the outlook represents a 23% compound annual growth rate from an estimated $1.29 billion of 2026 revenue. Management emphasized that its $1.29 billion figure for 2026 was not formal guidance.

SolarEdge reiterated third-quarter revenue guidance of $310 million to $340 million and said it expects fourth-quarter revenue to be slightly below the third quarter because of seasonality. The company cited six consecutive quarters of year-over-year revenue growth, from $212 million to $345 million in the second quarter, as well as six quarters of margin expansion. It said EBITDA turned positive in the most recent quarter.

Core Business Focuses on Storage and Commercial Solar

SolarEdge said the residential solar market is shifting from photovoltaic-only systems toward solar-plus-storage installations as export compensation declines and customers seek backup power, energy management and improved returns on their systems.

Liron Einav, SolarEdge’s director of residential product marketing, said the company’s Nexis residential energy platform was designed for this transition. The company said a system with a battery more than doubles SolarEdge’s revenue per installation compared with a PV-only system.

SolarEdge said it has more than 4 million residential sites globally, with about 90% currently lacking battery storage. It described the installed base as representing “dozens of gigawatt hours” of potential battery demand. The company said it generated $20 million in upsell revenue during the second quarter from the Netherlands and Germany alone.

The company said Nexis offers 10.5% more annual energy harvest than string technology, based on validation by VDE Renewables. SolarEdge also said Nexis can provide up to $7,000 in additional lifetime value to homeowners compared with a leading competitor, while its Sera AI energy-management companion can add more than $1,000 of annual savings. These figures were presented by the company.

Einav said Nexis is offered as a single SKU covering 3.8 kilowatts to 13 kilowatts and can be installed in under 30 minutes. The system is designed to allow capacity additions without rewiring, according to the company.

In commercial and industrial solar, SolarEdge said its share of U.S. rooftop installations rose from 29% in the fourth quarter of 2024 to 57% in the second quarter of 2026. Management attributed the gains to energy-harvesting capabilities, safety features and regulatory positioning, including domestic manufacturing and compliance-related qualifications.

Alta Yen, senior vice president and head of energy for the Americas at Prologis, said the logistics real estate company considers safety, scalability and partnership central to vendor selection. Yen said Prologis has worked with SolarEdge for at least six years and currently has 1.4 gigawatts of solar and storage deployed or under its platform after reaching a 1-gigawatt milestone in 2025.

Safe-Harbor Commitments Provide Future Visibility

SolarEdge said it has signed $1.7 billion of firm customer commitments for deliveries between 2027 and mid-2030, primarily involving residential and commercial customers seeking physical-work-test safe-harbor arrangements. Including expected optimizer sales associated with inverter contracts, the company estimated a $3.3 billion opportunity.

Management said a 30% battery attachment rate would increase the opportunity to more than $5 billion. However, it cautioned that not all commitments will convert to revenue because customers may cancel contracts or go out of business, and liquidated damages would not equal the full value of canceled transactions.

AI Data Centers Represent New Growth Initiative

SolarEdge also detailed plans to develop solid-state transformers, or SSTs, for AI data centers that increasingly may adopt 800-volt direct-current power architectures. The company said AI-factory growth is constrained by grid availability and increasing rack power density, which it expects to exceed 1 megawatt in 2028.

Meir Adest, SolarEdge co-founder and vice president of core technologies, said conventional data-center power architectures can lose about 12% of energy before it reaches GPUs. SolarEdge’s proposed DC-native architecture is designed to convert 34.5-kilovolt AC power to 800-volt DC at more than 99% efficiency, according to the company.

SolarEdge estimated that recovering 1% of efficiency at a 100-megawatt AI factory could provide an additional megawatt for computing and generate approximately $20 million in annual revenue for the facility owner. It projected the total addressable market for its AI-factory power products could increase from $200 million in 2027 to $4.1 billion in 2030.

The company expects to have a working SST product by the end of 2026, conduct pilot installations in 2027 and begin commercial deployment and initial revenue in 2028. It forecast $600 million in AI-factory revenue in 2029, while acknowledging during the question-and-answer session that it does not yet have firm purchase orders or customer agreements for the products.

Adest said SolarEdge has demonstrated medium-voltage hardware in its lab and has filed patent applications related to SST conversion and safety technologies. The company also cited a white paper on 800-volt DC protection and grounding to which NVIDIA contributed as a technical reviewer, along with an expanded collaboration with Infineon on solid-state circuit breakers.

Margin and Cash-Flow Targets

CFO Maoz Sigron said SolarEdge expects gross margin, excluding the impact of inflation reduction act-related incentives, to increase from 24% in 2026 to 35% in 2029. The company expects adjusted EBITDA margin to rise from 2% in 2026 to 18% in 2029.

Sigron said Nexis, SST products, operational efficiency, business scale and fuller realization of Section 45X manufacturing benefits are expected to support margin expansion. He said the company’s SST outlook does not assume 45X credits.

SolarEdge said operating expenses are expected to rise from $367 million in 2026 to $480 million in 2029, while declining as a percentage of revenue from 28% to 20%. The company said it expects to continue investing more than half of operating expenses in research and development.

The company reported net cash of $265 million at the end of the second quarter and said cash, cash equivalents and marketable securities exceeded $600 million. It also said first-half 2026 free cash flow was $24 million and that it expects positive free cash flow for the full year.

About SolarEdge Technologies (NASDAQ:SEDG)

SolarEdge Technologies, Inc develops smart energy technology for solar power generation, energy storage and energy management. The company is best known for its DC-optimized inverter system, which uses power optimizers attached to individual solar modules to improve energy harvesting and provide module-level monitoring. Its platform is designed to support residential, commercial and utility-scale photovoltaic installations.

The company's product portfolio includes power optimizers, inverters, monitoring and management software, batteries and energy storage systems, and related solutions for backup power and electric vehicle charging.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.