Huge Numbers for Enphase Microinverters

$40M in new funding, 250,000 units shipped

In a solar universe of more than 250 early-stage startups, many of them shipping PowerPoints in volume (See Solar Bloodbath 2010), microinverter builder Enphase has essentially created a new market sector and run with it. This approach has won them more funding and strong market acceptance.

We've reported on the many aspirants in microinverters and DC-boost architectures in detail here and here, and we've reported on recent developments at Enphase here.

Today Enphase announced that it has won $40 million in funding in an oversubscribed round, with new investor Bay Partners leading the equity financing. This round of financing also includes Horizon Technology Finance (that's debt finance, not VC), more debt from Bridge Bank (NASDAQ:BBNK), and VC from existing investors Third Point Ventures, RockPort Capital Partners, Madrone Capital Partners and Applied Ventures.

I have to admit that I was initially one of the skeptics of the microinverter concept, citing the conservative nature of the solar installer trade and the multiple failure points.  I had bumped heads with an anonymous gentleman at one of Enphase's venture investors (Abe Yokell of Rockport) on this topic. But nothing proves the skeptics wrong more than purchase orders, backlog, improving sales numbers, and millions of hours of real-world field testing at residential and commercial installations.

Enphase's recent spate of announcements continues to prove the microinverter skeptics (see PV Powered on microinverters) and electrolytic capacitor skeptics (see SolarBridge on electrolytic capacitors in microinverters) wrong and has transformed Enphase from early-stage startup to young company shipping in volume.

Enphase, with the help of its manufacturing partner, Flextronics, has managed to ship more than 250,000 microinverters since beginning shipments about two years ago.  The wholesale price of the unit is in the $150 range, so that's $40 million dollars in revenue so far and growing fast.

Enphase also announced a microinverter design specifically for the Ontario, Canada market which will fulfill Ontario's Domestic Content requirement, allowing installers to participate in the Ontario Feed-In Tariff (FiT) program.  Enphase's Canadian production line will have a capacity of 100 megawatts (500,000 microinverters) in the first year. The company plans to double this capacity to one million microinverters in 2011.

Microinverters individuate and convert the energy output of each solar PV module into grid-compliant AC power, offering some potential advantages over traditional centralized inverters in energy harvest, system reliability, and ease of installation and design. Additionally, powerline communications enable continuous, remote, per-module monitoring.

So what's next for this fast growing startup? A focus on growth and expansion, sure.  The firm has to make sure the reliability story holds up.  And in a climate where companies like Tesla, Solyndra, Fallbrook and Codexis can seriously consider an initial public offering -- an Enphase IPO would not be out of the question.

And one more thing to consider -- if the microinverter (or centralized inverter for that matter) already has a communications link and already monitors energy production -- how much of a stretch would it be for the inverter and internet gateway to be the consumer's portal to the utility smart grid?

Company Profile |  BOS/Inverters

Eric Wesoff: March 22, 2010

Petra Solar: Solar on the Pole, Part 2

A new application and a new sales channel—microinverters to utilities.

Petra Solar, armed with $54 million in venture capital raised over the last three years, has built itself into a distributed generation firm leveraging microinverter and grid availability technology with a unique product and sales channel.  Up until now, the startup has been relatively secretive about its affairs.  

Through information garnered from our informants in bars and pool halls, we've been able to write about the firm (see here) and we even placed them in our list of the Top 50 Greentech Startups by virtue of their volume shipments and utility contract with PSE&G.  That profile prompted the startup to contact Greentech Media to clarify just what it is that Petra Solar does.  

Playing in the crowded microinverter/distributed inverter market involves competing against incumbent centralized inverter firms like SMA and SatCon as well as the small army of startups in this emerging field.  Here's a list of the aspirants in the microinverter / distributed inverter market:

I spoke with Petra's VP of Strategic Development, Neel Master, a former investor, researcher and entrepreneur.  Master believes that Petra is differentiated in this field by virtue of, amongst other things, the ten patents they hold in the field of power electronics, originally invented with NASA and the U.S. Air Force in mind.  Here's a link to one of the firm's patents.   

With a history of designing for the rigors of spaceflight and a portfolio of power control patents, Petra was able to get a system designed and out the door for testing by utilities relatively quickly.  According to Master, utility expectations for reliability were regularly exceeded and BP Solar's stress tests yielded "great results."

Technology aside, Petra has exploited an untapped sales channel and unique application -- solar panels that are mounted on utility and power poles and sold directly to the utility.  Petra has won a large contract with Public Service Electric & Gas, New Jersey's biggest power utility, to install solar panels on streetlights and power poles across the distribution network.  PSE&G looks to install 200,000 panels and about 5 percent are up so far, according to PSE&G.  

The company's CEO, Shihab Kuran, has claimed, "This is the single largest distributed installation in the world," according to The Star-Ledger.

Petra sells a kitted system consisting of a solar module, an integrated microinverter, mounting hardware, and wireless monitoring equipment. It sells this system directly to utilities for mounting on the distribution pole or streetlight pole.  It's meant to be installed by a utility crew in less than 30 minutes and to deliver AC power directly to the grid.  By dealing with utilities and mounting directly on the utility-owned pole, the hassles of permitting and Nimbyism are pretty much avoided.

Petra has partnered with SunTech and BP Solar.  But they are essentially vendor- and technology-agnostic.

In Neel Master's words, "We build a self-contained energy generation system."

Unlike the other successful microinverter startup, Enphase Energy, which focuses on residential and commercial solar installations, Petra Solar looks at their solution "with the utility in mind" and "the impact of the system on the grid."  It's not just about the power being generated by the Petra microinverter -- Petra is monitoring in real-time the voltage and current at each power pole.  The microinverter thus serves as an element in the smart grid, alerting utilities to outages and voltage sags via wireless communications.  Typically, voltage sags, which can cause brownouts, are only detected via a truck roll.

And in what is a victory for any startup, Petra is starting to ship in volume with 15,000 units delivered so far and expectations of shipping 70,000 units in 2010.  The firm is commissioning about one megawatt per month and all of the units are assembled in New Jersey.

This potential for this untapped application is immense -- there are hundreds of millions of power poles in the U.S.

This type of installation lets utilities address ambitious Renewable Portfolio Standards (RPS) quickly without having to deal with siting, permitting and limited transmission resources.  In fact, Petra was shipping product within a month of signing the PSE&G contract.  And installation of these modules is straightforward, especially when you're working with a workforce of linesmen who know their way around power poles.