Solar micro-inverter company raises $40m to expand

March 31, 2010

Solar micro-inverter manufacturer Enphase Energy has secured $40 million in funding from equity partners lead by Silicon Valley-based venture capital firm Bay Partners.

The company based in Petaluma, Northern California, also gained investments from Horizon Technology Finance, Bridge Bank as well as its existing investors Third Point Ventures, RockPort
Capital Partners, Madrone Capital Partners and Applied Ventures LLC.

Formed in 2006 by solar and telecoms industry veterans, the company provides inverter systems used to turn Direct Current (DC) electricity generated by solar panels into Alternating Current (AC) power suitable for export to the grid or use by appliances.

We’re excited to invest in a company that is leading the transition in the inverter market from central to microinverters” - Sandesh Patnam, Bay Partners

While most solar systems use large, centralizes inverters with many solar panels feeding into the same unit, Enphase’s approach is to provide micro-inverters for individual solar panels.

Claims that such an approach can deliver more power, a better reliability at a lower cost have seen Enphase shipping out more than 250,000 units since its formation.

Its latest funding round will aim to accelerate the growth achieved so far.

“Significant market share”

Sanjeev Kumar, chief financial officer of Enphase Energy, said: “Enphase has captured significant market share in the inverter space in an extraordinarily short time frame. This financing will be used to fund our
expansion plans and further strengthen our balance sheet.”

Enphase offers two types of micro-inverter, one with a 190-watt output and the second with a 210W output, and is working on a twin micro-inverter that will allow two solar panels to connect to a single unit to help speed up installation.

The company also provides communications systems for solar installations – the Envoy Communications Gateway, which collects performance data from solar panels, and the Enlighten website system that allows customers to monitor and analyze their solar performance information.

Sandesh Patnam, general partner at Bay Partners, said: “Enphase has a remarkably driven management team, and an excellent track record of technology innovation. We’re excited to invest in a company that is
leading the transition in the inverter market from central to microinverters.”