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SunPower snaps up microinverter startup SolarBridge

SunPower, the solar panel maker and project developer majority-owned by oil giant Total, announced Monday that it has acquired SolarBridge, a venture capital-backed startup that makes microinverters for solar panels. Microinverters are miniature versions of conventional central solar inverters that are necessary for converting the direct current generated by solar panels into alternating current that feeds into the grid or is used by the building or onsite.

Microinverters emerged as a new, and disruptive, form of solar inverter several years ago. Instead of matching a central inverter to a dozen panels at a time, a much smaller microinverter can serve, and be embedded on, just one panel. This design allows the microinverters to calculate and adjust the optimal energy output of each solar panel and can prevent poor-performing panels from affecting the power output of the best-performing ones. Another startup called Enphase Energy, which went public in early 2012, is a competitor to SolarBridge.

Mage Solar panel with SolarBridge microinverter. Image courtesy of Gigaom.
Mage Solar panel with SolarBridge microinverter. Image by Gigaom.

SunPower didn’t disclose the terms of the deal or the price it paid for the Austin, Texas–based startup, which started selling its microinverters in any kind of volume at the beginning of 2011. SolarBridge has raised at least $105 million to date, from investors including Shea Ventures, Battery Ventures, Rho Ventures, Constellation Technology Ventures, and Osage University Partners. (Disclosure: Shea Ventures is an investor in Gigaom).

SunPower has been working with SolarBridge since late 2011, when it started reselling a microinverter and panel combo with them. SolarBridge also had various other partners before the deal.

SunPower sees boom times ahead for its solar cell manufacturing and the company said last week in its earnings call that it plans to boost its solar panel production by as much as 46 percent in 2015. The U.S. market has been among the top three big-growth solar markets worldwide, and solar panel installments domestically will likely grow 36 percent to reach 6.5 gigawatts in 2014, according to GTM Research.

But with a big ramp-up, SunPower needs to make sure it’s offering some of the most efficient, cost-effective and best solar products out there — hence its investment in bringing in the microgrid technology in house. By taking over microgrid manufacturing it can use its economies of scale to reduce the cost and make the production process more efficient.

SunPower can also be more vertically integrated, which is something that competitor SolarCity has been doing aggressively lately. After some twists and turns, SolarCity and SunPower have emerged as some hefty competitors.

Since SunPower didn’t disclose the terms, it’s unclear whether or not the price exceeded the amount SolarBridge has raised over the years. It’s difficult not just to exist and grow as a solar manufacturing startup but also to find the same type of multiple that an internet or software company would get in an acquisition.