UPDATED: Solar inverter maker Enphase Energy is taking the plunge by filing to go public. In a government filing Wednesday, the California company said it plans to raise up to $100 million.
Enphase hasn’t priced its shares. It has been on our list of cleantech companies likely to go public this year. The company closed a $63 million private round in June last year, bringing the total private money raised to $104 million by the end of 2010. The company, founded in 2006, created a new market for microinverters and has been a leader in this market segment.
Inverters are a must-have piece of equipment in a solar electric array. They turn direct current from solar panels into alternating current for feeding the grid or onsite use. Enphase’s inverters are much smaller and each is paired with a solar panel while a conventional inverter made by the likes of Power-one and SMA sits in a cabinet and serves about a dozen solar panels at a time.
Enphase says its microinverters are better solutions because they can monitor and adjust power output of individual panels, which are connected in series. In this set up, well-performing panels aren’t affected by poor-performing ones. The same thing can’t be said for an array with central inverters. Poor performing solar panels, such as those in the shade or covered in debris, can drag down the AC power output of a central inverter.
Microinverters remain more expensive, and they haven’t been around long enough to generate long-term data to show whether they will work reliably for a long time. Some installers have expressed concerns about having to replace microinverters often. UPDATE: Enphase’s chief marketing officer, Bill Rossi, told me recently that the company’s microinverters can cost
twice roughly 40 percent more than central inverters for the same-size solar panel array.
A growing crop of microinverter companies have emerged to launch products since. It’s not just the startups that are now peddling microinverters. Last month, Power-One, among the top 3 inverter makers worldwide, launched a microinverter. Market leader SMA Solar Technology expects to do the same soon. As the competition intensifies, Enphase will have to innovate faster and make sure it executes its manufacturing strategy – it contracts with Flextronics to make its microinverters – to meet demand. It also will have to have enough money to compete effectively.
Enphase hasn’t made a profit in the last three years. The company generated $61.7 million in revenue and posted $21.8 million in losses in 2010. In 2009, Enphase brought in $20.2 million in revenue and posted $16.9 million in losses. During the first quarter ending this March, the company reported $18.1 million in revenue and $9.3 million in losses.
Photo courtesy of Enphase Energy