Enphase Energy goes public, ends solar IPO drought

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