Although not yet announced, GTM has just learned that SunPower has acquired Stanford-spawned, early-stage power electronics firm Dfly Systems, according to sources close to the deal. Pricing was not disclosed. SunPower has confirmed the acquisition.

Details are scant at this point, but the small firm "builds power electronics that lower system costs," according to folks in the know who suggest that the new electronics can replace "traditional and unreliable" bypass diodes while lowering balance-of-system costs. The voltage management technology has the potential to reduce cabling and improve inverter performance, according to our sources.

SunPower has declined to comment, although the deal has closed. Presumably SunPower's advanced technology team, helmed by Doug Rose, performed the technical due diligence.

Dfly Systems, originally Dragonfly Systems, has gained funding from the DOE, Stanford's TomKat Center for Sustainable Energy, and The Cleantech Open, as well as a variety of private investors. Founders of the firm include Andrew Ponec, Daniel Maren and Darren Hau.

MJ Shiao, GTM's Director of Solar Research and panel electronics expert, notes that Dfly "is a very early-stage module-level power electronics (MLPE) player looking to replace conventional PV module junction boxes with intelligent controls. MLPE shipments grew to over 1 gigawatt in 2013 and have continued to grow throughout 2014, through leading vendors like Enphase Energy and SolarEdge Technologies."

"While prospects are bright, the path to success in the space is difficult -- downstream players are still skeptical about MLPE performance and long-term reliability, especially in the commercial and utility space that [Dfly] has previously indicated that it's targeting. Furthermore, the market continues to be increasingly crowded with more traditional solar power electronics players like KACO New Energy and Fronius (through Tigo Energy) introducing MLPE solutions and new capital for longer-operating startups like SolarBridge and others."

"On its own, Dfly would have the unenviable task of convincing module manufacturers to adopt the technology by running through vigorous and long technology, compatibility, and reliability vetting processes and then attracting demand pull from downstream customers -- not to mention the continued fundraising necessary with any startup. With SunPower, the leash is likely longer, but with only an early-stage design in the quiver, the final product may be years off and may look completely different than what's currently on the drawing board," said Shiao.

SunPower just had another strong quarter and beat estimates across the board while holding its 2014 guidance steady. The firm is continuing to amass its now 8-gigawatt pipeline and its holdco projects. SunPower has been capacity-constrained since late 2013 and is essentially allocating its production. CEO Tom Werner notes that the firm is still improving efficiency, with a 24.5 percent efficiency anticipated for 2016.       

SunPower has shown little reluctance to purchase a startup when the technology makes sense. About a year ago, SunPower acquired panel cleaning firm Greenbotics. CEO Werner has noted that PV panels are being cleaned three times faster by Greenbotics panel-cleaning technology, at the same time cutting water usage by 90 percent. SunPower has also invested in thin-silicon firm Solexel.

For fiscal year 2014, SunPower's guidance remains unchanged with GAAP revenue expectations of $2.55 billion to $2.70 billion, gross margin of 20 percent to 22 percent and net income per diluted share of $0.75 to $1.05.