The leader of the U.S. solar microinverter market, Enphase Energy, needs to watch its back. On Tuesday U.K. startup Enecsys announced that it’s raised £25 million ($41 million) in equity to essentially try to conquer North America (work on product, boost sales in the U.S. and Canada).
Microinverters are mini, distributed versions of centralized large solar inverters, which convert electricity from solar panels from direct current to alternating current in order to be used on site or feed the grid. Each microinverter is typically paired with one panel. Centralized inverters have been used for decades and each can perform the job for an array of panels at a time, while the market for microinverters is newer and growing rapidly.
Enecsys started its life out of the labs at Cambridge University in 2003 and launched its first product in Europe last year, Peter Mathews, vice president of North America sales, told me recently. While Enecsys says it is the only supplier of microinverters in Europe now, the company is just now crossing the pond with its microinverters for North America.
Enphase, on the other hand, is heading over to Europe after demonstrating on its home turf that it can drive demand for microinverters. The company is running field trials with its microinverters in Europe and plans to start shipping the products “shortly,” said Raghu Belur, vice president of products at Enphase.
Enphase has shipped more than 500,000 microinverters within North America since its initial product launch in the summer of 2008, making it the largest microinverter supplier in the world. It, too, has raised some hefty capital, including a $63 million round in 2010. The company is redesigning its microinverters and the accompanying cabling for wiring them to solar panels for a series of launches this year.
Climate Change Capital Private Equity became a new investor in Enecsys by putting in £11 million ($18 million) in the new round. The rest of the money came from existing investors, Wellington Partners, NES Partners and Good Energies, who collectively put up £8.5 million ($14.3 million) for Series A in 2009.
Microinverters remain a tiny piece of the overall inverter market for several reasons, partly because they are currently designed for small solar electric systems for homes and businesses.
Developers of industrial-size solar energy systems and even smaller ones for the residential market still prefer centralized inverters partly because centralized inverters have been in use for much longer, so there are a wealth of long-time performance data that investors can turn to in order to calculate capital and operational costs of a project over its life expectancy of 20-25 years.
Centralized inverters also are cheaper than microinverters, although some of them come with shorter warranties than microinverters. Many of these large solar power projects are located on large tracks of flat roofs or the ground, where shading isn’t such a big problem.
But there are some key benefits of microinverters. Namely, they can track and adjust power output for each solar panel to make sure the poorest performing solar panel doesn’t drag down the performance of the rest of the panels in an array. This feature is crucial for solar panels that need to go on slanted rooftops where they could be under the shades of trees or other structures for part of the day.
As a result of this tracking capability, microinverter makers often tout how much more electricity their hardware could squeeze out of each solar panel (or rather, how much electricity that won’t be lost). Enecsys claims its microinverters can deliver 5-20 percent.
Creating a nice web portal with good graphics, such as the one by Enphase, to show the performance of each panel also is an attractive feature for consumers, many of whom choose solar because they want to do something that is good for the environment and maybe save them money over the long run.
Photo courtesy of Enecsys