Enphase Energy downgraded to Underweight from Overweight at Barclays

Barclays double downgraded Enphase Energy (ENPH) to Underweight from Overweight with a price target of $40, down from $51. The firm says the possible repeal of Section 25D “has flown under the radar and is now taking a bite out of ENPH.” Section 25D enables individual homeowners to claim the 30% tax credit for solar energy and storage installations, the analyst tells investors in a research note. Barclays says that as Enphase has been dominant in the non-third-party ownership market and its market share is on the weaker side in the TPO market, the elimination of this tax credit negatively impacts the company’s outlook. The residential solar market will likely evolve into over 90% third-party ownership starting next year if Section 25D is repealed, predicts Barclays. It estimates Sunrun (RUN) is the largest third-party owner, followed by Sunnova Energy (NOVA).