Much of the buzz around solar energy focuses on panels, the most visible part of a photovoltaic solar system that collects and converts solar energy into electricity. If you can drive down their costs, you have a winning technology.
Petaluma, California-based Enphase Energy takes a different tack. The startup, which on Tuesday announced a $6.5 million, second-round of venture funding, aims to reduce the “rest of system” costs, which include things like installation and wiring, and improve reliability along the way.
The startup hopes to do it by going micro with its inverters, devices that convert a solar panel’s DC power to AC power in order to run machinery and appliances and feed into the electrical grid.
“Enphase Energy marks the beginning of an industry-wide technology shift,” said Mr. Nahi in a statement.
Solar systems today use centralized inverters—many panels feeding into a single large one. Enphase is making inverters small enough so that each panel gets its own. Chief Executive Paul Nahi said this will mean simplified installation and management, better reliability, and more total electricity per panel—though he declined to offer specific figures.
David Kurzman, senior vice president of Panel Intelligence, said reducing inverter and installation costs would benefit the solar sector. But he cautioned that solar panels represent the bulk of overall system cost—about two-thirds according to Panel Intelligence estimates.
Still, Mr. Nahi said there is more to Enphase than just cost. Each inverter will have a communication device that feeds information to a web-based monitoring system. If one panel is down or is working poorly, the company will notify the owner and give advice on repair.
Also, since each panel has its own inverter, if one goes down the remaining panels can still generate electricity.
But Mr. Kurzman said Enphase should expect fierce competition. He said companies will be watching, especially those who stand to lose their share of the inverter market. One is British Columbia-based Xantrex Technology, a publicly traded, power electronics equipment maker.
Robert Schwartz, of Third Point Ventures which led the funding round, said Enphase is at least a year ahead of any competition he’s seen in the micro-inverter space. The startup expects to make its technology commercially available in the second quarter of 2008.