To a layman, electricity seems like a fairly straightforward proposition: It flows like water through wires and into gadgets, end of story. But the real story is a bit more complex, which is why Enphase Energy, a company that makes a device called micro-inverters for solar panels, has raised a new $15 million financing.
An inverter converts direct current (DC), which is what solar panels produce, into alternating current (AC), the type of electricity you’re usually using. Making a small, efficient inverter is particularly hard, and Enphase is one of the few companies that claims to be able to produce them. Adding to their obscurity, micro-inverters are designed to be reliable, and thoroughly hidden away.
But attaching a micro-inverter to each solar panel in an installation can eke out some five to 25 percent more electricity, according to Enphase. Because there’s on each panel, they can be used to pinpoint problems, which standard inverters can’t. And as a final advantage, using micro-inverters is also cheaper than installing a standard centralized inverters, at least according to Paul Nahi, the company’s CEO.
Enphase launched its product in June, and Nahi says it has since shipped out thousands, with a backlog for tens of thousands more by year’s end. He expects the company to sell hundreds of thousands of micro-inverters next year, with production ramping into the millions afterward, if the market for solar panels continues to do well.
You can see Enphase’s visualization tools below, the same as what a home-owner who had micro-inverters installed would have access to. The company currently sells into the home and commercial markets, but ultimately plans on getting into the utility market as well.
Rockport Capital led the $15 million financing, with Applied Materials joining as a strategic investor, and previous backer Third Point Ventures returning. Along with its $6.5 million second round, Enphase has taken $28 million to date; Nahi says it will likely seek another equity financing in the future if it continues to scale as planned.