Enphase Energy : CEO Letter to Shareholders 2021

Use of forward-looking statements

This presentation contains forward-looking statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to statements concerning future financial performance and guidance, including revenues, gross margin, operating results, expenses and costs; our business strategies, including our operations and anticipated trends and developments in markets in which we operate and in the markets in which we plan to expand; our expectations as to the impacts and evolving effects of the ongoing COVID-19 pandemic and current geopolitical issues; the anticipated market adoption of Enphase's new products and technologies; the capabilities and performance of our technology and products, including future products and services, and the reduction of soft costs and commissioning times for installers; the ability to optimize and customize products, load disaggregation, monitoring, and management, and reduction in installation, logistics and supply chain times; our performance in operations, including management and customer service. These statements are based upon current expectations that involve risks and uncertainties. Any statements that are not of historical fact, may be forward-looking statements. Words used such as "anticipates," "believes," "continues," "designed," "estimates," "expects," "goal," "intends," "likely," "may," "ongoing," "plans," "projects," "pursuing," "seeks," "should," "will," "would" and similar expressions are intended to identify forward- looking statements, although not all forward-looking statements contain these words. All forward-looking statements are based on our current assumptions, expectations and beliefs, and involve substantial risks and uncertainties that may cause results, performance or achievement to materially differ from those expressed or implied by these forward-looking statements.

Therefore, you should not place undue reliance on our forward-looking statements.

A detailed discussion of risk factors that affect our business is included in the filings we make with the Securities and Exchange Commission (SEC) from time to time, including our most recent reports on Form 10-K and Form 10-Q, particularly under the heading "Risk Factors." Copies of these filings are available on the Enphase website athttp://investor.enphase.com/sec.cfm, or on the SEC website atwww.sec.gov. All forward-looking statements in this presentation are based on information currently available to us, and we assume no obligation to update these forward-looking statements in light of new information or future events.

Industry Information

Information regarding market and industry statistics in this presentation is based on information available to us that we believe is accurate. It is generally based on publications that are not produced for purposes of economic analysis.

Non-GAAP Financial Metrics

• • The Company has presented certain non-GAAP financial measures in this presentation. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or in-cluded in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States of America, or GAAP. Reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure can be found in the Appendix to this presentation. Non-GAAP financial measures presented by the Company include non-GAAP gross profit, gross margin, operating expenses, income from operations, net income, net income per share and free cash flow.

• • These non-GAAP financial measures do not reflect a comprehensive system of accounting, differ from GAAP measures with the same captions and may differ from non-GAAP financial measures with the same or similar captions that are used by other companies. In addition, these non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the Company's results of operations as determined in accordance with GAAP. As such, these non-GAAP measures should be considered as a supplement to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. The Company uses these non-GAAP financial measures to analyze its operating performance

Copyright and Trademark Attribution

©2022 Enphase Energy, Inc. All rights reserved.

and future prospects, develop internal budgets and financial goals, and to facilitate period-to-period comparisons. Enphase believes that these non-GAAP financial measures reflect an additional way of viewing aspects of its operations that, when viewed with its GAAP results, provide a more complete understanding of factors and trends affecting its business.

• • As presented in the "Reconciliation of Non-GAAP Financial Measures" page, each of the non-GAAP financial measures, excludes one or more of the following items for purposes of calculating non-GAAP financial measures to facilitate an evaluation of the Company's current operating performance and a comparison to its past operating performance:

• • Stock-based compensation expense. The Company excludes stock-based compensation expense from its non-GAAP measures primarily because they are non-cash in nature. Moreover, the impact of this expense is signifi-cantly affected by the Company's stock price at the time of an award over which management has limited to no control.

• • Tariff refunds. This item represents approved tariff refunds, and interest income earned on those refunds, by the U.S. Customs and Border Protec- tion that qualify for the tariff exclusion on Chinese imported microinverter products that fit the dimensions and weight limits within a Section 301 Tariff exclusion under U.S. note 20(ss)(40) to subchapter III of chapter 99 of the Harmonized Tariff Schedule of the United States. Approved refunds relate to tariffs previously paid from September 24, 2018 to March 31, 2020 and are excluded from the non-GAAP measures as the refunds are non-recurring in nature for tariff costs incurred in the past and are not reflective of the Company's ongoing financial performance.

• • Acquisition related expenses and amortization. This item represents ex-penses incurred related to the Company's business acquisition, which are non-recurring in nature, and amortization of acquired intangible assets, which is a non-cash expense. Acquisition related expenses and amorti- zation of acquired intangible assets are not reflective of the Company's ongoing financial performance.

• • Non-cash interest expense. This item consists primarily of amortization of debt issuance costs, accretion of debt discount and non-recurring debt settlement costs, because these expenses do not represent a cash outflow for the Company except in the period the financing was secured or when the financing was settled, and such amortization expense or settlement of debt costs is not reflective of the Company's ongoing financial perfor- mance.

• • Loss on partial settlement of convertible notes. This item is reflected in other income (expense), net and represents (i) the difference between the carrying value and the fair value of the settled convertible notes and (ii) the inducement loss for the difference between the value of the shares issued to settle the convertible notes and the value of the shares that would have been issued under the original conversion terms with respect to the repur- chased Notes due 2025, which is non-cash in nature and is not reflective of the Company's ongoing financial performance.

• • Change in fair value of derivatives. This item is reflected in other income (expense), net and represents changes in fair value of the conversion option in the convertible notes due 2025, as well as the convertible note hedge and warrant transactions, which is non-cash in nature and is not reflective of the Company's ongoing financial performance.

• • Non-GAAP income tax adjustment. This item represents the amount adjusted to the Company's GAAP tax provision or benefit to present the non-GAAP tax amount based on cash tax expense and reserves.

• • Free cash flow. This item represents net cash flows from operating activi- ties plus deemed repayment of convertible notes attributable to accreted debt discount reported in operating activities less purchases of property and equipment.

Enphase Energy®, Enphase, the E logo, IQ, IQ7, IQ8, IQ8+, IQ8M, IQ8A, IQ8H, IQ8D, IQ9, IQ10, Ensemble, Enlighten, M-Series, IQ Load Controller, IQ System Controller, Solargraf Pro, and other trademarks or service names are the trademarks of Enphase Energy, Inc. Other names are for informational purposes and may be trademarks of their respective owners.

ENPHASE CEO LETTER TO SHAREHOLDERS 2021

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"We have never lost sight of the three cornerstones that have guided us since the beginning: innovation, quality, and customer experience."

Dear fellow shareholders,

Badri Kothandaraman President and CEO

2021 was undoubtedly strange. We wanted life to return to normal after experiencing the COVID-19 pandemic in 2020, but it didn't really turn out that way. It was not exactly a dull year though. The demand for our products was robust, and we had our hands full with global challenges, as supply chain shortages impacted almost every business. Enphase and the solar industry were enormously resilient and adjusted well to the changes in conditions. In general, we are pleased with our performance in 2021.

We resolved key supply issues that prevented us from ramping and went from strength to strength on solar microinverters. We started to ramp on battery storage systems in the U.S. throughout the year. The realization that our systems are now in the path of power with batteries caused us to step up our field support to installers as well as institute 24x7 customer service. We released IQ8TM Microinverters which can form a microgrid during a power outage using only sunlight, providing backup power even without a battery. We made four acquisitions during the year, three of them focused on software and services for our installers. Finally, we were pleased to publish our inaugural ESG report in 2021 and remain committed to advancing a sustainable future for all.

I am very proud of all our employees around the world who continue to work tirelessly to deliver innovative products and services to our customers. We have never lost sight of the three cornerstones that have guided us since the beginning: innovation, quality, and customer experience. And our culture playbook is a reminder of how we work together and achieve results.

Our strategy is to build best-in-class home energy systems and deliver them to homeowners through our installer and distribution partners, enabled by an installer digital platform. In this spirit and backdrop, this letter highlights our 2021 accomplishments, reinforces our strategy, and discusses our priorities for 2022.

"We achieved record revenue growth across all regions in 2021, with more than 78% growth year-over-year."

ENPHASE CEO LETTER TO SHAREHOLDERS 2021

For the full year 2021, our revenue increased 78% sequentially to $1.4 billion, compared to $774.4 million in 2020. We shipped 10.4 million microinverters in 2021, compared to 6.8 million microinverters in 2020. Our non-GAAP gross margin in 2021 was 40.7%,1 compared to 40.1%1 in 2020, primarily due to disciplined pricing and cost management, despite inflation. We exited 2021 with $1.0 billion in cash, cash equivalents, and marketable securities. In March 2021, we successfully completed the issuance of green convertible notes that resulted in net proceeds of approximately $1.2 billion. The terms of this capital raise were some of the most favorable to an issuer in history. We were bestowed with an ESG Award and Structured Equity Award from IFR for this green bond.

We are pleased to report that 2021 was a record year for non-GAAP profitability and cash flow from operations. We generated $352.0 million in cash flow from operations in 2021, compared to $216.3 million in 2020. We repurchased approximately 3.2 million shares in 2021 for a total of $500 million dollars with an average price of $155 per share. This represents approximately 2.4 percent of our outstanding shares. Our view on share buyback is simple and we take a page out of Warren Buffet's book. We take care of the needs of our business first, followed by ensuring we have enough cash for future acquisitions and strategic investments. Once these are done, we engage in opportunistic share repurchases if we believe our share price is less than a conservatively calculated intrinsic value.

We achieved record revenue growth across all regions

We achieved record revenue growth across all regions in 2021, with more than 78% growth year-over-year. Our U.S. and international revenue mix for 2021 was 80% and 20%, respectively. Revenue increased 74% year-over-year in the U.S. as we experienced strong demand for both microinverters and batteries. Our growth in the U.S. was broad-based. While we work with installers of all shapes and sizes, it is no secret that we celebrate the small- and medium-sized installers. We think our products and services add maximum value to them and we are committed to doing everything possible to simplify their business.

In Europe, our revenue more than doubled year-over-year. During 2021, we expanded into Italy with IQTM Microinverters and introduced IQTM Batteries in Germany and Belgium. Europe is leading the world in the move towards clean energy not only by adopting full home electrification with electric vehicles (EVs) and heat pumps, but also using self-consumption from solar and battery storage technologies to power the home. We are excited about our growth opportunities particularly in Germany and Netherlands, followed by France, Belgium, Poland, Spain, and Italy for our solar, storage, and EV charging solutions.

1 See Appendix for reconciliation to comparable GAAP measures

In the Asia Pacific region, our revenue increased 80% year-over-year and in 2022, we look to capitalize on the solar industry's recovery from COVID-related restrictions, as well as recent regulatory changes that are favorable to our safer AC architecture.

due to their thermal stability and enhanced safety. Finally, we are always looking at opportunities to globalize our battery supply chain. Our cell pack suppliers are based in China and diversification will help us reduce supply chain uncertainty while driving down costs.

Our revenue growth in Latin America increased 77% year-over-year as we had strong demand in Puerto Rico for our solar-plus-storage business. Puerto Rico is one of the top regions in the U.S. with the highest penetration of batteries due to frequent outages caused by natural disasters. We entered the Brazilian solar market in October of 2021 with the introduction of IQ7+TM microinverters for residential and small commercial installers across Brazil.

Our teams did a terrific job navigating the supply chain crisis

While the global supply chain came under stress in 2021, due to the resurgence in economic activity, we managed our suppliers well and qualified additional sources rapidly. Demand for our microinverter systems continued to be well ahead of supply. We were tight on semiconductor gate driver chips and application-specific integrated circuits (ASIC chips) for our microinverters in early 2021, but recovered quite well by qualifying more sources and working closely with our foundry partners. For batteries, we experienced global logistics challenges with a sharp increase in ocean container costs coupled with port constraints causing long lead times of 14-16 weeks. There were constant disruptions and surprises in the supply chain throughout the year and the teams did an admirable job of plowing through.

"While the global supply chain came under stress due to the resurgence in economic activity, we managed our suppliers well and qualified additional sources rapidly."

We built up a total capacity of approximately 5 million microinverters per quarter as we exited the year. We added a second fully automated line earlier in 2021 at our contract manufacturer in India, bringing our quarterly capacity to about 1.5 million microinverters. We added a fully automated line in Mexico in the fourth quarter of 2021, bringing quarterly capacity to approximately 2.25 million microinverters in Mexico. We also recently announced a new manufacturing agreement in Romania with Flex® for microinveter manufacturing in Europe starting in the first quarter of 2023. We see rapid growth in Europe and would like to service customers better. We will then have four locations in total - China, Mexico, India, and Europe for the manufacturing of our microinverters.

On batteries, our two sources for Lithium Iron Phosphate (LFP) battery cell packs increased their total capacity to approximately 180 megawatt hours per quarter as we exited the year. Our existing cell pack suppliers can always add more capacity if required, and we are continuing discussions with additional cell pack suppliers. We are pleased that we have been right about LFP chemistry all along for residential storage. We are seeing more players adopting LFP batteries

"We released new features for our batteries in 2021, including M-SeriesTM compatibility, load control, and generator support."

Our IQ Batteries have LFP chemistry and operate at low DC voltages around 65V

We shipped 251 megawatt hours of IQ Batteries during the year

We saw steady growth in our IQ Battery shipments every quarter of 2021. We optimized pricing for installers and continued to improve the installer experience by simplifying commissioning and reducing installation times. Our goal remains to reduce the commissioning time to under an hour, allowing installers to install and commission batteries in less than a day. For homeowners, it is important to provide them up-to-date information about the performance of their systems.

To achieve this, we focused on providing text messaging and push notifications for critical events, allowing them to be "always informed" during both on-and off-grid situations. The Enphase® App provides homeowners unprecedented data and control of their systems.

We released new features for our batteries in 2021, including M-SeriesTM inverter compatibility, load control, and generator support. Our batteries are now compatible with legacy Enphase M215TM and M250TM microinverter-based solar systems. The expanded compatibility provides approximately 300,000

Enphase system owners with the possibility of achieving energy resilience through upgrade programs.

ENPHASE CEO LETTER TO SHAREHOLDERS 2021

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