UPDATED: Power electronics that can boost energy production from solar panels have emerged in recent years as a favorite among venture capital investors. On Monday, that trend continues with the announcement that an Israeli startup, SolarEdge, has raised $37 million from VCs.
SolarEdge belongs to a cadre of companies that have developed devices to track the energy output of solar panels and optimize their production. Before the emergence of these devices, energy produced by each solar panels traditionally flows to a central inverter, which converts the direct current to alternating current to feed the grid (or be used on site). The central inverter also tracks energy output, but it typically is responsible for about a dozen solar panels or so. Because these panels are commonly strung together in series, one poor performing panel can drag down the power production of the rest of the panels, and shade and debris can be major culprits for reducing a solar panel’s production.
Various ways to boost solar power
But many companies have begun to look into electronics that can track performance and minimize losses at the panel level before the DC-to-AC conversion takes place. SolarEdge’s solution is to attach what’s commonly called a power optimizer at each solar panel, and it couples the optimizers with a central inverter and software in a package. Companies that have developed power optimizers and related monitoring software include Tigo Energy and Azuray Technologies.
Other companies are combining power tracking and optimization with DC-to-AC conversion and have created microinverters. Startups in this space include Enphase Energy, Enecsys and SolarBridge Technologies, and these companies are also designing cables and other fixtures to make it easier for installers to attach microinverters to each panel. Central inverter developers are getting onto the microinverter trend, too, and Power-One and SMA Solar Technology have recently joined the competition. Both companies launched microinverters this year.
Some companies are angling to integrate their microinverters into solar panels at production lines because, ideally, these pre-assembled, microinverter-attached solar panels could further reduce installation time and therefore cost. SolarBridge last week announced such a deal with SunPower (s SPWRA), which plans to add the microinverters to two of its solar panel lines. Sharp also announced that it will market its solar panels with Enphase’s microinverters in a kit, but the solar panel maker won’t be integrating them in its factory.
UPDATE: Upsolar plans to roll out a panel integrated with Enphase’s microinverters in 2012. Upsolar will create a slot at the back of its panel for inserting the microinverter (and for making it easy to replace the device). Hanwha SolarOne also plans to attach Enphase’s microinverters to the frame of its solar panels before shipping them to distributors and installers.
Meanwhile, some startups are taking still other approaches to power conversion. ArrayPower is an interesting one to watch; its technology modulates current in pulses until it reaches the right frequency for AC power. Transphorm, on the other hand, is using a more exotic material, gallium nitride, that it says is more efficient at converting DC to AC. Both companies are backed by VCs such as Google (s GOOG), Kleiner Perkins, Draper Fisher Jurvetson and Firelake Capital Management.
While power conversion technologies are must-haves in solar, they also can find applications beyond that. A startup that creates a novel and affordable technology will be able to sell it to many markets, such as data centers and electric cars. In fact, Transphorm caught Google’s attention partly because the startup’s technology could lead to big energy savings for data center operators. Companies that are developing these technologies also tend to skip the need to build their own factories by outsourcing production to electronics manufacturers.
Transphorm, incidentally, is teaming up with Enphase to develop a solar inverter; the companies are getting funding from a Department of Energy program that supports early-stage technology development.
SolarEdge has lined up big-name investors as well. Northwest Venture Partners led the most recent funding round, which also came from Opus Capital, Walden International, Genesis Partners, Vertex Venture Capital, Lightspeed Venture Partners and GE. SolarEdge announced a $25 million round a year ago.