While venture capital has shone on solar panels, the components that make up solar systems, like inverters that convert DC to AC, have received notably less attention from the Valley. But inverter designer 1-Solar has been getting a warmer response, as founder Tranh Nguyen told the audience at the California Commonwealth Club’s Clean Tech Open event on Thursday night that he is just a few days away from wrapping up a $5 million round of Series A funding.
Nguyen was participating in a panel discussion with the other winners of the California Clean Tech Open (CCTO). He told the audience that “Since CCTO, we’ve been frequenting Sand Hill Road almost every week,” though he didn’t detail which firms will be backing the company. Nguyen founded 1-Solar in 2006, and won the CCTO in November, basically outing the then-stealthy company.
1-Solar claims its design triples the life of inverters — at half the cost of traditional designs. Nguyen told us that 1-Solar also already has a customer in Southern California lined up for 60,000 inverters — a deal he says is worth about $72 million.
But before 1-Solar delivers its first inverters, the company says it’s working with partners to build manufacturing facilities in the Middle East and Latin America to start moving inverters into the Mexican and Brazilian markets in as soon as six months. 1-Solar hopes to start manufacturing and selling domestically in a year.
For those of you who have forgotten your high school physics, an inverter is an electronic circuit that converts direct current (DC) to alternating current (AC). DC is what flows out of solar panels, fuel cells and wind turbines (not to mention most other generators); 1-Solar’s inverters convert current to the kind of 110-volt AC that powers your Wii. The key to 1-Solar’s technology, Nguyen explains, is a simplified inversion process of one step instead of two.
The company currently has just four employees, but Nguyen said he plans to hire two PhDs with some of the forthcoming capital, adding that 1-Solar has just hired “one of the best engineers in conversion.” Nguyen himself is a power conversion expert who headed the design of the power system for the Tomahawk cruise missile.
While the company has made progress recently, Nguyen knows he is up against a lot of competition: The two big players in the inverter space are GE and Siemens. But Nguyen told the audience that there’s room for better inverters as the market is growing by, he estimates, some 50 percent a year.
With so much money having already been invested in photovoltaics, the surrounding technical components in the solar value chain are trying to catch up. “The inverter is the weak point in the solar chain,” Nguyen told us. Now it looks like venture capital will be moving to fill that market gap with better inverters.