GigaOM » Enphase Energy

Introducing new solar gear that could change the game

Katie Fehrenbacher — Tue, 26 Mar 2013 20:33:11 +0000

Inverters are the silent workhorses that convert power from devices like solar panels and batteries into usable power. There’s been considerable innovation around solar panel inverters in recent years, as some solar roofs have started moving from a single large central inverter to smaller “microinverters” embedded on each panel. But now year-and-a-half-old chip startup Empower Micro Systems has been pushing that solar inverter innovation even farther and has developed a new low voltage solar microinverter based on its new chip designs that it said costs less and is more reliable and efficient than the current ones on the market.

Empower Micro Systems CCO Jon Bonanno told me that the company’s inverter tech “is a quantum change in how solar is done.” It can be attached to a solar panel system, on the rack or the frame, or embedded at the individual solar module level. Bonanno says the inverter is five times more reliable, five percent more efficient and costs 20 percent less than traditional “string” inverters, which have been used for decades. The potential of a lower inverter cost, is that the entire cost of the solar system could be lower, in addition to the recent dramatic drop in solar module prices.

Empower Micro Systems doesn’t plan to manufacture the inverter box itself. The company is a fabless chip firm and it sells its integrated circuits and architecture design to manufacturers like inverter makers and solar module producers. In that respect it’s adopting Intel’s mode, churning out the chips inside the inverter devices.

Bonanno is pretty confident of the disruptive power of the inverter tech, called the “Universal Micro Power Inverter.” He thinks it can “replace all solar inversion options, hands down.” The key technologies of the inverter are how the system on a chip synchronizes and controls the power flow at a low voltage, as well as the design of the inverter box itself.

Enphase Energy’s tech

Microinverters use energy storage tech to temporarily store the DC power from the solar panel and decouple it from the AC grid power. The Empower Micro System’s inverter uses a next-gen solid state capacitor for this energy storage tech, while other systems more commonly use more traditional liquid-filled electrolytic capacitors.

The next steps for any startup are bringing this hardware to market. Bonanno says the company has already signed one agreement with a “top-three” module maker, and is in discussions with many more module makers and power supply vendors. Just this Sunday, Bonanno said the company’s field trials went live with solar installers. This year the inverter will be certified and could be produced in pilot production by the third quarter of 2013.

The technology has attracted a list of angel investors including Jurgen Krehnke, recent President & General Manager of SMA Americas, Ken Lawler, General Partner at Battery Ventures and Silicon Ventures, Kiki Tidwell, Kauffman Fellow and cleantech investor, and Eugene Zhang, Managing Director at Tsinghua University Executive Entrepreneur Club. Chinese module manufacturers will be key for the company’s market strategy. Empower Micro Systems is currently in the process of raising a $5.5 million series A round.

There’s a lot of competition in the solar inverter space. Not only are there the new microinverters companies like Enphase Energy, and power optimizer tech from the likes of Solar Edge and Tigo Energy, but also the traditional inverter giants like SMA dominate the market. The company will need to launch and scale to prove a competitive edge.

But Empower Micro Systems plans are actually even more audacious than just replacing solar inverters. The technology can be applied to energy storage and electric vehicles, and Bonanno says one day down the road they hope to move into those markets, too.

Updated at 3PM PST, to fix the spellings of Jon Bonanno, and Jurgen Krehnke.

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Why 2012 hasn’t been such a bad year for cleantech

Maud Texier — Tue, 18 Dec 2012 08:00:26 +0000

As 2012 is coming to an end, SolarCity’s suspenseful IPO could be the final bright spot of a troubled year. Yes, as has been noted many times over the past few months, we are in Gartner’s trough of disillusionment, but the plateau of productivity might not be so far away.

The downside

So where do we stand now? First of all, the solar market has been deeply affected by the dramatic cost reduction of solar panels due to Chinese manufacturers. While China and the US are disputing trade tariffs, solar modules continue to fall in price, creating a lot of victims among US module manufacturers or emerging startups working on cheaper cells.

Wind Production Tax Credits are also expiring at the end of the month, which will likely dramatically impact the wind market. Last time the PTCs were allowed to expire, at the end of 2003, installations dropped 77 percent the following year. Power Purchase Agreements for wind projects have also never been so low: from $72/MWh in 2009 they decreased to $35/MWh by 2011. The equation might be hard to solve in 2013 for the wind industry.

IPO attempts in the cleantech sector have not been so successful either. Several companies ditched their IPO plans in 2012, such as solar thermal company Brightsource, waste fuel company Enerkem and electric vehicle company Smith Electric. In addition to SolarCity, Enphase is one of the only companies that made out this year. VCs are now stepping out of the industry as some have put heavy investments into development and manufacturing and have seen few returns.

The upside

However, this year could just be a step that eventually delivers market maturation rather than a “crisis”. Low cost Chinese manufacturers actually enabled a dramatic increase in solar panel installations, particularly in the U.S. With a more than 100 percent year-over-year increase in mid-2012, the US market has been booming this year and grid parity is on good track.

The focus has now shifted beyond module manufacturing and to new financing mechanisms such as leasing or crowd-funding. The objective is to make solar projects more accessible by avoiding high upfront costs and enabling the mass-market to participate in this effort.

Venture-capitalists are also not totally out of the game yet. The energy market is a tough one to penetrate with high upfront investments and 20-30 years payback as you build a new power plant – a far cry from the quick returns of IT/Internet companies. That is why VCs shifted their attention to what they know best: software.

Call it Green IT, Cleanweb or Cleantech 2.0, these are the application of web business models to cleantech. Focused on software or apps, these products do not need high capex and can generate some revenues fairly quickly. Some people are skeptical about if the cleanweb can be as disruptive as next-gen energy technologies like new solar cells. Nonetheless IT will be a useful tool that will support and promote the cleantech market, and act as a catalyst for breakthrough technologies. In fact, these apps and software could be the trigger to bring renewable energy or electric cars to the mass market.

Ultimately, policies are still decisive for our industry. Obama‘s re-election creates hope regarding the PTCs’ extension. A few game-changers were also introduced this year: the Green Button initiative announced in 2011 really materialized this year through utilities’ adoption and the Apps for Energy challenge. It opened up a new market in terms of energy services and will help entrepreneurs to develop their products without entirely depending on utilities to reach end-customers. More recently, California’s Cap and Trade market finally put a price on CO2 emissions. This will enhance energy efficient systems and promote low-emissions technologies.

In a few words, a lot of money has been spent over the last years within the cleantech industry. 2012 has actually been the witness of a market concentration, where we had to start rationalizing the expenses in order to build a sustainable system. With most of the technologies now in place, we need to modulate and bundle them, so they meet the market’s expectations. Inevitably, cost structures and customer adoption will be decisive for the cleantech to really and sustainably take off.

As an engineer Maud Texier dedicated her efforts towards the energy market. She hails from the oil & gas industry, and started her career working in electricity markets. As an analyst on a power trading desk, she studied the market mechanisms that can develop new demand-response models. Maud is now scouting new technologies such as renewables, storage or energy efficiency, for a large power utility, and analyzing the main trends of this growing market.

Images courtesy of SolarCity, flickr user Tapestry Dude.

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A power conversion startup buddies up with Japan’s electronics giants

Katie Fehrenbacher — Mon, 01 Oct 2012 19:35:58 +0000

In the latest example that cleantech startups really need the big corporations in their corner, power conversion startup Transphorm says it has raised funds from, and created a partnership with, a group of some of the largest electronics companies in Japan. The news is also another indicator that innovations created by cleantech startups in California, and funded by the Valley’s venture capitalists, are finding a growing amount of opportunities outside of the U.S.

Transphorm says it’s raised a round of $35 million (series E) led by the Innovation Network Corporation of Japan (INCJ) — a partnership between the Japanese government and two-dozen Japanese companies like Sharp and Toshiba — as well as power electronics giant Nihon Inter Electronics Company (NIEC). Existing investors including Kleiner Perkins, Google Ventures, Foundation Capital, and Lux Capital also participated in the round.

Five-year-old Transphorm makes energy-efficient power conversion devices out of the semiconductor material gallium nitride, instead of the more commonly used silicon. Power conversion devices are used in any device that uses electricity, like electronics, HVAC systems, servers, data centers, electric car chargers and solar panels.

Watch this video for free on GigaOM

Transphorm says its energy-efficient power conversion devices can eliminate up to 90 percent of electric conversion losses. The company has been making strategic products in its early days, like power diodes made of gallium nitride. Transphorm is also working with solar inverter company Enphase Energy (also backed by Kleiner) to develop a solar power conversion device using financial support from the Department of Energy’s ARPA-E program.

Transphorm didn’t invent gallium nitride as a semiconductor; other companies have been tinkering with the material for years. But most companies that use gallium nitride are working on low-voltage conversion, while Transphorm is looking to crack high-voltage conversion. Transphorm’s products will likely be more expensive than comparable silicon ones in the short term.

Transphorm has now raised $104 million. The news today also includes a business partnership with Nihon Inter Electronics to help Transphorm move into commercial high-volume manufacturing. Check out our video interview with Transphorm CEO Umesh Mishra from Green:Net 2011.

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Battery Ventures comes out swinging for solar, efficient lighting, green IT

Katie Fehrenbacher — Wed, 30 May 2012 18:07:30 +0000

Quite a few greentech companies closed sizable funding rounds this week, and Battery Ventures is involved in three of them. Is cleantech support holding on in the venture world? Here’s what we’ve seen from Battery and others:

SolarBridge raises $25 million, series D: SolarBridge makes solar microinverters, which are miniature versions of conventional central solar inverters that are necessary for converting the direct current generated by solar panels to alternating current for feeding the grid or to be used onsite. Instead of matching a central inverter to a dozen panels at a time, each microinverter serves one panel. This design allows the microinverters to calculate and adjust the optimal energy output of each solar panel and prevents poor-performing panels from affecting the power output of the best-performing ones.

SolarBridge raised $25 million in a series D round led by Shea Ventures and including Battery Ventures, Rho Ventures and Osage University Partners. The company has raised more than $71 million to date, including a $19 million series C round last year. SolarBridge says the funding will be used to launch “new hardware and software products, increase sales and marketing efforts and expand the company’s operations globally.”

Solar microinverters are the future of solar inverters, but are still at an early market phase. Enphase Energy is another leader in the microinverter space and Enphase went public earlier this year.

Redwood Systems raises $11.75 million, series C: Redwood Systems makes a control and sensor system for LEDs that runs over an optimized version of Ethernet cables. The company just closed $11.75 million in a series C round from investors including Battery Ventures, U.S. Venture Partners, Index Ventures and Mitsui & Co, Ltd. Japanese conglomerate Mitsui started backing the company a year ago.

Redwood Systems is four years old and some of its customers include SAP, Volkswagen, Johnson Controls and most recently, Facebook. Commercial building owners and data center operators can use Redwood’s LED system to cut the amount of lighting used throughout the building — in some cases, up to 70 percent over standard non-networked fluorescent lighting systems. LEDs are more efficient than fluorescents, but Redwood’s management system also monitors the building environment, including temperature and room occupancy, and can dim and manage the lights to help maximize efficiency.

Lighting Science Group raises $140 million: LED maker Lighting Science Group has closed on $140 million in private funding, led by private equity firm Riverwood Capital, and including Pegasus Capital Advisors. Lighting Science Group is already publicly traded on the OTC bulletin board, and over a year ago indicated that it wanted to go public on the Nasdaq and raise $150 million.

Lighting Science designs and makes LED lamps and other light fixtures for the residential, commercial and industrial market. The company has been selling LED lighting for nearly a decade and owns factories in Satellite Beach, Florida and Monterrey, Mexico.

GreenBytes raises $12 million, series B: GreenBytes makes data de-duplication storage gear, which are tools that reduce redundant data as well as store data on energy efficient storage solid state drives. The company raised a $12 million series B round from Battery Ventures and Al Gore’s Generation Investment Management.

“Primary storage”, or top tier storage, is comprised of hardware designed for quick data access and are usually reserved for active or just-created data. Beneath this are “secondary tiers” devoted to backup storage, archives and storage of lower priority business data. GreenBytes’ appliances are deployed close to the top tiers of storage so that fewer data trickles down to other tiers and the greater the potential cost and energy savings overall. Despite the promise of data deduplification, IT managers are still wary about it, according a GigaOM Pro report “De-Duplicating the Storage Industry” (subscription required).

Solar Mosaic raises $2.5 million: According to a filing, the kickstarter of solar, SolarMosaic has raised $2.5 million. The company is just about to launch the truly disruptive part of its business: as early as this Summer SolarMosaic plans to start offering people a way to buy into rooftop solar panel projects, and make back a return on their investment over time.

Soladigm raises close to $5 million in debt, option: Soladigm, which makes electrochromic “smart” windows that tint when electricity is applied to them, has raised $5 million in debt and options according to a filing. The startup was founded in 2007 and is based in Milpitas, Calif.

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Enphase Energy doubles revenues for first earnings as public company

Katie Fehrenbacher — Thu, 10 May 2012 21:59:13 +0000

In Enphase Energy’s first earnings report as a public company, the solar micro inverter maker showed strong revenue growth, doubling its revenues between the first quarter of 2012 ($42.60 million) and the first quarter of 2011 ($18.07 million). Enphase’s net loss was about flat over the year, losing $10.18 million in Q1 2012, slightly up from its loss of $9.29 million for Q1 2011.

Enphase Energy’s CFO Sanjeev Kumar said in a release that the 136 percent revenue growth was particularly important, because Q1 is often a time of seasonal slowness. Enphase expects its Q2 revenues to be in the range of $49 million to $52 million.

At the end of March Enphase Energy went public and became the first solar company to go public on the U.S. market since the fall of 2010. The company sold nearly 9 million shares at $6 a piece, raising about $54 million, but priced its shares at the low end of its $6-$7 price range.

Enphase was the only greentech IPO hopeful that actually made it out of the public gate in recent months. BrightSource, Luca Technologies and Enerkem all ditched their IPO plans in recent weeks.

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The real reason for the greentech IPO missteps

Katie Fehrenbacher — Fri, 27 Apr 2012 15:45:20 +0000

While the greentech industry had been hoping for an IPO revival this month, the sector has actually seemed to hit a higher level on the FUBAR charts. Three companies withdrew their IPO plans in the 11th hour (BrightSource, Luca Technologies and Enerkem), while the one made that it out priced at the low end of its projections (Enphase Energy).

But does this necessarily mean that greentech startups eying the public markets in 2012, shouldn’t waste their time? Well, take a look under the hood of most of these companies, and the problem isn’t really about being green or selling into the energy sector, it’s the lack of profits and even revenues in some cases.

As the co-founder of Lux Capital, Peter Hébert, tweeted Friday morning (@peterjhebert):

“Lot of hand-wringing about #cleantech IPOs. No morals in mkts. Should not expect willing buyers of unsustainable, profitless businesses.

So true. I was wondering just how few revenues and profits these firms have been taking in, so I decided to table ‘em up. The ugly truth:

Company	Type of company	Revenue 2011	Net Income	Investors
BrightSource	Solar thermal	$159.10M	$110.96M loss	Alstom Power, Draper Fisher Jurvetson, VantagePoint, Morgan Stanley
Enerkem	Waste to fuel	No revenue	$26.18M loss	Rho Ventures, Braemer Energy, Waste Management
Luca Technologies	Gas farming	$1.06M	$18.02M loss	Kleiner Perkins, One Equity Partners, Oxford Bioscience Partners, BASF Venture Capital
Enphase Energy (did IPO)	Solar micro inverter	$149.52M	$32.30M loss	ThirdPoint, RockPort Capital, Madrone Partners, Kleiner Perkins, Applied Ventures

The reality is that Enerkem and Luca Technologies had really no business going public with their current financials — the moves seemed like attempts to raise money to build their operations, and the markets just didn’t want to do that. As soon as BrightSource pulled their IPO plans, likely Luca and Enerkem just saw the writing on the wall.

BrightSource on the other hand, has a growing, though clearly, for the time being, a money-losing business. When (and if) the company builds out its first solar plant, Ivanpah on time and budget, then the firm will start moving into a more financially lucrative position. BrightSource was likely also hampered by the fact that the solar panel markets are really struggling, even though BrightSource builds solar thermal plants and doesn’t make solar cells or panels.

Enphase Energy was the one company that actually went through with their IPO and it’s not surprising that they have the most sound 2011 year financials. Enphase Energy is growing pretty dramatically, but that firm, too, has a lot of new competition in the marketplace, so has a big year ahead of them.

Image courtesy of angusf.

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Who wins out in Enphase’s IPO?

Ucilia Wang — Fri, 30 Mar 2012 20:23:39 +0000

Solar inverter maker Enphase Energy ended a solar IPO drought by making its public market debut Friday, but did the company’s venture investor make a killing on the exit?

Not really, at least at the current per share price. Below is a list of major investors who financed the company prior to the IPO and what the value of their shares are after the IPO at the $6 offering price (based on the prospectus filed Friday). These shareholders are subject to a lock-up period of 180 days after the IPO so that they don’t flood the market with their shares and dilute the stock’s value so soon after the IPO.

Investor	Shares after IPO	% of common stock	Value at $6 per share
Third Point	6.4M	16%	$38.4M
RockPort Capital	4.8M	12.1%	$28.8M
Madrone Partners	5.1M	12.9%	$30.6M
Kleiner Perkins	4.8M	11.7%	$28.8M
Applied Ventures	1.8M	4.6%	$10.8M
Bay Partners	1.8M	4.6%	$10.8M

But Enphase Energy has raised more than $100 million in equity and debt from private investors. The company said in a filing last year that it had sold $92.2 million share of convertible preferred stock as of March 31, 2011. Based on a midday trading price, Enphase had a market cap of around $270 million.

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Solar company Enphase rises in morning trading

Katie Fehrenbacher — Fri, 30 Mar 2012 16:17:25 +0000

Solar inverter maker Enphase Energy, which made its market debut this morning, rose in morning trading by as much as 29 percent to $7.76, but settled back down to $7.22 by noon ET. The company sold nearly 9 million shares at $6 a piece, raising about $54 million.

We’ll watch how the stock fares throughout the day. It’s the first IPO for a solar company since the fall of 2010 and is also one of the first greentech IPOs this year. Enphase is one of three greentech IPO hopefuls that plan to debut in recent weeks, giving hope to investors and entrepreneurs that the window for greentech IPOs may be opening up.

Pricing at $6 per share on Thursday night was the low end of the $6-$7 price range that it announced only earlier this week, and Enphase initially set its share price at between $10 and $12 per share, aiming to sell 7.3 million shares. Investors RockPort Capital Partners and Bay Partners agreed to purchase 2.5 million shares of common stock in the IPO.

Enphase develops microinverters for solar panels, which are attached to each solar panel to monitor power output and convert the direct current from the solar cells inside the panel to alternating current for feeding the grid. Traditional design of a solar panel calls for pairing a centralized inverter with about a dozen solar panels.

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Enphase Energy goes public, ends solar IPO drought

Ucilia Wang — Fri, 30 Mar 2012 14:43:16 +0000

Enphase Energy will become the first solar company to go public on the U.S. market since the fall of 2010, when its stock begins trading on the Nasdaq on Friday under the symbol ENPH.

The California company said it’s sold nearly 9 million shares at $6 a piece, raising about $54 million. That was at the low end of the $6-$7 price range that it announced only earlier this week, and Enphase initially set its share price at between $10 and $12 per share, aiming to sell 7.3 million shares.

The last solar IPO before Enphase was the October 2010 debut of Daqo New Energy on the New York Stock Exchange. Daqo makes silicon that is found in most of the solar panels today. Jinko Solar, a solar panel maker, went public on the New York Stock Exchange in May 2010. Solyndra was planning an IPO that year as well, but it ditched the plan in June that year.

Does Enphase’s IPO bode well for other solar or other cleantech companies that want to go public soon? Hard to say. It certainly raises hopes. Goldman Sachs’ head of renewable energy business, Stuart Bernstein, told a cleantech crowd in San Francisco this week that the market is in recovery and things are looking up. Solar power plant developer BrightSource Energy is expected to carry out its IPO in the next few weeks.

Enphase develops microinverters, which are attached to each solar panel to monitor power output and convert the direct current from the solar cells inside the panel to alternating current for feeding the grid. The company is a pioneer in carving out a market for microinverters, which also has gained more converts thanks to a growing number of microinverter makers. The conventional design of a solar electric system calls for pairing an inverter with about a dozen solar panels, which is a centralized approach that Enphase and other microinverter developers say is less effective at tracking and improving the power output of each solar panel.

Microinverters are more expensive than central inverters, so a key to popularizing them involves convincing installers that adding the cost of microinverters is a worthy upfront investment because they can get more power out of the solar electric system during its lifetime.

Since its IPO filing last year, Enphase has raised a private round of $21.86 million to support its expansion plans while waiting for an optimal time to go public. Though it was early to the market with an innovative product, it’s since facing a growing challenge from not just startups but also major inverter makers such as SMA Technology and Power-One. SMA plans to launch a microinverter this year. Power-One introduced its own version last year.SunPower plans to package microinverters from SolarBridge Technologies to its solar panels starting this year.

Enphase doubled its sales in 2011 but has yet to make a profit. Investors RockPort Capital Partners and Bay Partners agreed to purchase 2.5 million shares of common stock in the IPO.

Photo courtesy of Enphase Energy

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Goldman banker: Things are looking up for greentech IPOs

Ucilia Wang — Wed, 28 Mar 2012 22:36:17 +0000

Stuart Bernstein, the head of the clean energy group at investment bank Goldman Sachs, has a message for startups and investors: hang in there, things are looking up, he said at the Cleantech Forum in San Francisco Wednesday.

Bernstein recalled the difficulties of doing an IPO last summer when uncertainties about the economy grew as the U.S. credit rating took a dive and the sovereign crisis gripped Europe. But two companies, Renewable Energy Group and Ceres, went public this year, and that bodes well for other IPO candidates, he said. Renewable Energy Group makes biofuel while Ceres sells seeds for growing crops for biofuel feedstock.

“It’s hard to know whether we are half way up the contraction or above the line, but we are certainly in the recovery period,” he said.

Rising oil price in recent months has helped to make investors consider cleantech IPOs, at least those in the biofuel business. But cheap natural gas continues to temper interest in solar and wind companies, Bernstein said. Natural gas proponents have cleverly positioned this energy source as cleaner than coal and oil and cheaper and more readily available than wind and solar.

In recent weeks a variety of greentech IPO hopefuls have make progress toward planned IPOs. Solar electronic maker Enphase Energy, biofuel producer Enerkem and solar power plant developer BrightSource Energy all recently set the price range for their shares. On Wednesday, Enphase lowered the expected price range to $6 to $7 per share from $10 to $12 per share.

A lot of cleantech companies have — or tried — to go public in the past two years. Some of them have generated little (or no) revenues but turned to the public markets to try to raise money. Bernstein said those companies “are circling and waiting to land on the aircraft carrier, and they are nervous because their fuel is running out. We said not yet, not yet.”

Goldman, by the way, advised Solyndra, which tried to go public but abandoned that plan in mid 2010 when it couldn’t drum up enough interest. That was a little over a year before the solar panel maker filed for bankruptcy.

Bernstein drew a parallel between the cleantech sector and the general tech industry during his talk. By throwing up many charts, he pointed out that many tech companies also had trouble attracting enough interest to make their public market debuts during economic downturns in the past two decades. At the same time, some tech companies managed to pull off IPOs in some of these tough times, including eBay, Qualcomm and Netflix, he said. He ended his talk on that positive note.

Photo courtesy of Richard Allaway via Flickr

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