Top Ten Solar

5. Enphase Energy

Solar energy systems these days typically rely on a central inverter to convert the direct current produced by each solar panel to alternating current for the grid and to monitor the performance of the entire system. Enphase Energy, founded in 2006, is offering an alternative that could improve energy output by 5 percent to 25 percent and do a better job tracking the system's health.

The Petaluma, Calif.-based startup has developed a miniature version of the inverter that is bolted onto each solar panel. This approach makes it easier to harvest energy from panels that perform poorly as a result of shade or debris. When a few panels are compromised, they can have a big impact on the overall energy output of the system. Enphase launched its micro-inverters last June and said that it already has "tens of thousands of micro-inverters in the field," said Raghu Belur, co-founder and vice president of marketing at Enphase.

It has lined up a good number of customers. It is selling its products through solar equipment installers and distributors such as Akeena Solar and AEE Solar. Akeena plans to sell to electricians and roofers solar panel systems that they could install easily, and those systems would come with Akeena-designed panels and Enphase’s micro-inverters. Suntech Power, a solar panel maker, said last month it would order and market Enphase’s micro-inverters to its network of U.S. dealers.

Enphase entered the micro-inverter market early, but it will face some tough competition soon. SmartSpark Energy, another startup, plans to start commercial production. Other companies such as National Semiconductor are developing devices that also would be attached to each panel, but would boost the direct current output that then goes to a central inverter. National plans to launch its product in May this year.