When the sun shines, free electrons pour out of rooftop solar panels in the form of direct current (DC). But every light bulb, fan, and appliance in a house needs alternating current (AC), which reverses direction 60 times per second. And therein lies a huge headache for installers and owners of photovoltaic systems. The central “inverters” that turn solar DC into grid-compatible AC are among the most finicky and failure-prone parts of any solar installation. When they burn out, they put entire solar installations out of commission until they can be replaced, usually at a cost of several thousand dollars. Yet while solar panel manufacturers continue to invest in R&D to make photovoltaic cells more efficient, the old inverter box hasn’t changed much in decades.
Until recently, that is. Befitting the Silicon Valley spirit, there’s a Bay Area startup that’s out to replace the big, dumb inverters attached to most solar energy systems with small, sleek, smart “microinverters.” It’s called Enphase Energy, and under its approach, each panel or module gets its own inverter. It’s sort of like putting out lots of small bowls to catch the water from a leaky ceiling rather than running around with a single big pail.
Enphase’s microinverters are full of custom microelectronics, so they cost more than traditional inverters. But the five-year-old startup in Petaluma, CA, which has raised about $100 million in venture capital, says the devices are more reliable than central inverters and can help harvest more energy from solar installations. Plus, they’re easier for installers to work with, and they emit a constant stream of data that lets owners track performance down to the level of an individual panel. That gives the company an advantage that can be likened to Apple’s emerging lead in the mobile computing market. And, as in the Apple case, Enphase’s systems thinking and marketing savvy could end up helping it grab a huge share of a market that nobody else thought was ripe for disruption.
Traditionally, says Enphase CEO Paul Nahi, the larger the inverter, the less power is lost during conversion from DC to AC, which long pushed solar installers toward wiring panels in series and converting all the power at once—an average of 4.5 kilowatts per residential installation. “When you’re dealing with that much wattage, you stress components,” Nahi told me when I visited the company’s headquarters a few weeks ago. “You generate a lot of heat in the central inverter, and heat is the single biggest enemy of reliability. But it had been drilled into [solar installers] that this is the way solar works. It never occurred to anybody that you didn’t have to have that problem. And the technological leap required to solve that problem was so dramatic that it was never even discussed.”
Enphase’s achievement has been figuring out how to use sophisticated electronics to efficiently convert as little as 200 watts at a time—-the output of a single panel. That might mean using 20 or more microinverters in the place of a single central inverter, but the payoff comes in the form of productivity. If you wire panels the old-fashioned way—in series, like Christmas tree lights—it means that an entire array’s output can only be as high as the lowest-performing panel. If one panel is dirty or shaded by trees, the whole array’s output is lowered to the level of that panel. With microinverters, by contrast, each panel feeds power into the system independently, at maximum efficiency for its light conditions. “Greater energy harvest is the essential benefit,” Nahi says.
But even more importantly, from a practical perspective, any general contractor can wire up a 200-watt microinverter, whereas a central inverter can only be installed by specialist electricians trained to work with high power and high voltages. “Now a handyman can put panels on the roof,” Nahi says.
And many of them are: Enphase has already sold half a million units in North America, where it controls 20 percent of the residential and light-commercial inverter market.
“Microinverters are simply a better way of doing residential solar, and small commercial, and in the future, likely large commercial and utility-scale solar,” says Ben Kortlang, a partner at venture firm Kleiner Perkins Caufield & Byers, which invested in Enphase last year. “What I like about Enphase is that
