Enphase Energy : Environmental, Social, and Governance Report 2023

Enphase Energy, Inc.

Environmental Social and Governance Report 2023

Enphase Energy, Inc.

Environmental Social and Governance Report 2023

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Contents

	A letter from our President and CEO	04
About us	06
	Enphase in numbers	07
	Our purpose	08
	Our core values	09
	Enphase culture playbook	10
	Our technology	12
	Start-up to industry leader	14
	Customer first	15
	Financial sustainability	18
	Our financial performance	19
Environment	20
	E1. Environmental stewardship	21
	E2. Clean energy production	23
	E3. Emissions and energy	24
	E4. Product responsibility	30
	E5. Case studies	33
People	42
	P1. Company demographics	43
	P2. Recruiting and retaining the best	44
	P3. Cultivating a diverse, inclusive and equitable workforce	46
	P4. Developing our people	50
	P5. Promoting a safe and healthy workplace	52
	P6. Responsible supply chain	54
Society	58
	S1. Enphase Corporate Social Responsibility (CSR) initiatives	59
	S2. Enphase grid services	63
	S3. Enphase innovation and industry leadership	66
	S4. Promoting clean energy policies	69
Governance	72
	G1. ESG governance and leadership	73
	G2. Business ethics and compliance	77
	G3. Data privacy, cybersecurity, intellectual property	80
Appendix	83
	Emissions and energy calculation methodologies	84
	GRI index	86
	SASB index	88
	TCFD response	89
	Membership associations	93
	Contributing to the UN Sustainable Development Goals	94
	About this report	96
	Forward-looking statements and other important legal information	97
	GAAP to Non-GAAP reconciliation	98

ENVIRONMENTAL, SOCIAL, AND GOVERNANCE REPORT 2023

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Badri Kothandaraman

President and CEO

"We aim to support a cleaner, more reliable, and better- performing grid to help improve quality of life, and to collaborate with a wide range of stakeholders to advance policy outcomes in support of clean energy across the world."

A Letter from our

President and CEO

Since the publication of our inaugural Environmental, Social, and Governance (ESG) report in 2020, we have made strides in managing our emissions footprint, cultivating a diverse and inclusive workplace, and raising awareness of ESG issues across the business. I am pleased to report the ongoing success of our ESG efforts in 2023 as we continued to make best-in-class renewable home energy systems with a laser focus on product innovation, quality, and customer experience.

Enphase was founded in 2006 with its purpose: "Advancing a sustainable future for all." We are the world's leading supplier of microinverter-based solar and battery systems. Our systems are helping millions of people gain access to clean, affordable, and reliable energy. As you read this report, you will see our purpose is infused into every part of our business. We acknowledge our responsibility to reduce our emissions footprint, focus on our customers and partners, and ensure our employees and the people and communities we serve are treated with transparency and respect, all while continuing to deliver products that are productive, reliable, smart, simple, and safe.

Since inception, we have shipped more than 73 million solar microinverters and 1.2 GWh of IQ® Batteries. Approximately 4.0 million Enphase-based systems have been deployed in more than 150 countries. Approximately 25.2 GW DC power of Enphase microinverters have been installed in solar systems, preventing 56 million metric tons of carbon dioxide equivalent (MTCO2e) - the equivalent of providing energy to 7.3 million homes for one year.1

2023 was a challenging year as our industry suffered through a period of slowdown in overall demand, primarily due to high interest rates in the United States and California's Net Energy Metering (NEM) 3.0, and macroeconomic conditions in Europe. I am proud of the hard work and resilience shown by our employees around the world who worked tirelessly to deliver innovative products and services to our customers as we navigated through the global slowdown. We maintained our operational excellence throughout 2023 and our culture playbookis a reminder of how we work together to achieve results.

We aim to support a cleaner, more reliable, and better-performing grid to help improve quality of life and to collaborate with a wide range of stakeholders to advance policy outcomes in support of clean energy across the world. The passing of the Inflation Reduction Act (IRA) by the U.S. Congress in 2022 enabled us to begin manufacturing in the United States, bring back high-technology jobs, and advance the country's clean energy economy. During 2023, we began shipments from our new contract manufacturing partners in the United States, including Flex in South Carolina and Salcomp in Texas.

In 2023, we introduced our products into more countries. We started shipping our IQ8™ Microinverters into 21 countries worldwide. Our IQ Batteries are shipping to customers in North America, Belgium, Austria, France, the Netherlands, Switzerland, Spain, Portugal, Sweden, Denmark, and Greece. We also introduced our latest Enphase® Energy System, powered by IQ8 Microinverters and the IQ Battery 5P. The IQ Battery 5P delivers the best

	1 Estimate based on Enphase managed systems data as of December 31, 2023 grossed up for non-managed systems
4	based on performance monitoring data; CO2e calculations based on U.S. Environmental Protection Agency (U.S.
EPA) Greenhouse Gas (GHG) Equivalencies Calculator.

"We remain committed to creating lasting value for all stakeholders, delivering a superior customer experience, and driving sustainable practices that make a meaningful difference."

power specifications and commissioning times of any Enphase battery to date. By the end of 2023, we were shipping the IQ Battery 5P to the United States, Puerto Rico, Australia, and the United Kingdom. We plan to enter more countries in Europe and Asia throughout 2024.

We launched our IQ® electric vehicle (EV) chargers in the United States and Canada in 2023. These Wi-Fi enabled smart chargers are now integrated into the Enphase Energy System. This enables use cases such as self-consumption and green charging, and allows homeowners visibility into the operation of their system through their Enphase® App.

We remain committed to creating lasting value for all stakeholders, delivering a superior customer experience, and driving sustainable practices that make a meaningful difference. As we navigate the clean energy market fluctuations due to global macroeconomic conditions, geopolitical instability, and climate change, our team is excited about the opportunities in 2024, knowing that sustainability is at the core of what we do at Enphase.

We appreciate your continued interest in our ESG efforts and thank our employees, customers, partners, and shareholders for their dedication as we continue to embrace our core values and advance a sustainable future for all.

Sincerely,

Badri Kothandaraman

President and CEO

ENVIRONMENTAL, SOCIAL, AND GOVERNANCE REPORT 2023

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About us

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Enphase in numbers

2006	3,157	8,701	25.2 GW DC
the year Enphase	employees and key	installers	approximate cumulative
was founded	contributors across	worldwide1	shipments of
	our global offices1		microinverters1

4 million	73+million	1.2 GWh	80.6 TWh
approximate number of	approximate number of	of storage1	of clean energy
systems deployed in more	microinverters shipped1		production2
than 150 countries1

56 million	6.3billion	144 billion
MTCO₂e prevented from	gallons of gasoline	miles not driven by an
entering the atmosphere,	not consumed3	average gas-powered
enough to power		passenger vehicle3
7.3 million homes with
energy for one year3

1. As of December 31, 2023
2. Annual running total estimate based on Enphase managed systems data as of December 31, 2023 grossed up for non-managed systems based on cumulative production records
3. Estimate based on Enphase managed systems data as of December 31, 2023 grossed up for non-managed systems based on cumulative production records; CO₂e calculations based on U.S. EPA GHG Equivalencies Calculator

ENVIRONMENTAL, SOCIAL, AND GOVERNANCE REPORT 2023

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Our purpose

Advancing a sustainable future for all.

Founded in 2006, Enphase is a global energy technology company and a leading provider of solar, battery, and EV charging products. We are working every day to enable whole- home energy management powered by clean energy, as well as helping to create a more resilient and reliable electricity grid for everyone.

Enphase transformed the solar industry with its revolutionary microinverter technology which turns sunlight into a safe, reliable, resilient, and scalable source of energy to power our lives. Today, our microinverters can be paired with our industry-leading batteries, EV chargers, and software, creating a comprehensive home energy management system.

The Enphase App provides unprecedented data and control in the palm of your hand. For the first time in the evolution of our centuries-old grid, people can get paid for the clean energy they produce and share with their communities, helping to build a new energy future that harnesses the sun. This clean, free, abundant source of energy can power our lives and ultimately help replace fossil fuels altogether.

Today, if you see a home with solar panels on it, there is a good chance it is an Enphase home. As of the end of 2023, more than 73 million microinverters1 have been installed on approximately four million homes in over 150 countries, helping millions of people gain access to clean, affordable, and reliable energy while creating jobs and a more carbon-free future. Enphase is putting people and their power at the center of our shared energy future.

Enphase. Power by people.

	1 Estimate based on Enphase managed systems data as of December 31, 2023 grossed up for non-managed
8	systems based on cumulative production records since inception

Our core values

Our company values are reflected in the way we work together, our performance, and how we are rewarded.

Customer first

We exist for our customers.

We listen to our customers and measure our success based on their feedback.

We take action to deliver the best customer experience.

Integrity

We tell the truth at all times, without making excuses.

We do what is best for the company.

We take ownership of our behaviors and results.

Innovation

We value innovation and recognize that it is the cornerstone of our existence.

We encourage appropriate risk-taking and challenge the status quo to find solutions.

We actively promote innovation through curiosity and continuous learning.

Teamwork

We appreciate and respect different behavioral styles and perspectives.

We collaborate globally to achieve more together than we can on our own.

We actively work to break down silos.

Quality

We place safety and quality above everything else.

We measure everything that matters and drive continuous improvement.

We make the highest quality products.

ENVIRONMENTAL, SOCIAL, AND GOVERNANCE REPORT 2023

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Enphase culture playbook

The pillars of the Enphase Culture Playbookhelp align and guide daily interactions with our purpose and values.

High performance

• We set the standard.
• We stretch ourselves to achieve exceptional results.
• We are relentless in the pursuit of excellence.

Recruiting and retaining the best

• We hire only the best.
• We reward and retain the best.
• We promote our people who get results.

Openness and transparency

• We are curious and encourage new ideas.
• We recognize that people have different styles and encourage diverse perspectives.
• We openly discuss issues and want to learn rapidly from our mistakes.

Accountability and execution

• We acknowledge reality and get things done without making excuses.
• We measure what matters and manage our performance through metrics.
• Our metrics have clear targets that don't change on a whim, and we publish progress against these each quarter.

Learning organization

• We encourage innovation.
• We develop employees through two-way coaching and feedback.
• We learn from our mistakes using a structured problem-solving approach known as 8-D.
• We document and share knowledge freely.

Culture playbook

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