Paul Nahi, the CEO ofsolarmicroinverter maker Enphase, announced that the firm boasted a 53.5 percent market share in the U.S. residential market in 2012, according to IHS. In an anticipated $500 million market, Lazard Capital sees Enphase "as a potential take-out candidate."
Nahi said, "We dominate and designed this category."
Nahi was speaking at Intersolar 2013 in San Francisco last week at an event to introduce the company's fourth generation microinverter. The new DC-AC converter is sized for 250 watts peak power, has a 96.5 percent CEC efficiency, with an integrated ground and status as an ungrounded array as per NEC 690.35.
Nahi suggested that no other company in solar has had this kind of market dominance. (The only company that comes to mind is SMA, which held a roughly 40 percent market share of the global market a few years ago.) The CEO reminded the assembled of Enphase's accomplishments: $217 million in revenue in 2012 and over 3 million units shipped to-date. Nahi saw the inverter landscape in "a rapid and significant migration to microinverters."
He said that he "expected to have formidable or great competition" -- but that it hasn't happened yet.
Which brings us to the question -- where is the microinverter competition in the U.S.? How is it that Enphase luxuriates with its 53.5 percent market share in the U.S. residential market?
Based on the sheer number of entrants, it would appear that a team of competent power electronics and system engineers can design and build a microinverter. Certainly, building a high-performance, high-reliability microinverter is a lot more challenging. But, despite the protestations of CTOs at distributed electronics firms, it's not really the technology or type of capacitor that differentiates these companies in today's market.
It's the channel and relationship with the customer.
Enphase gets the lion's share of its business in the U.S., with 40 salespeople on the ground calling on and training installers in every state with a friendly solar subsidy environment.
There is a long list of other microinverter market entrants -- and most of them will have to contend with Enphase as the 800-pound gorilla in the channel to the U.S. residential customer.
What follows is an incomplete list of microinverter companies: [Updated microinverter sales figures for Renesola and Petra July 19, 9am]
SMA is still the dominant inverter company in a volatile, consolidating $7 billion market. SMA America's spokesperson notes that SMA "is now shipping the [SMA microinverter] to the U.S. market," adding that its "initial launch was limited and we expect those units to be sold out very quickly. Our first manufacturing run was completed in Germany and those lines are now being moved to Denver. Because we are also setting up lines in Denver for our new...string inverters, as well as making some adjustments to handle increased central inverter business, we won’t see volume production on the microinverter until about October."
SMA has its own strong channel and will certainly be able to reach the customer. The question, based on the firm's extremely deliberate microinverter rollout, is whether SMA views microinverter sales as cannibalizing its own business and as such continues to ride the brakes on its marketing efforts.
SolarBridge avoids Enphase to some extent as a microinverter maker in the business of AC modules, getting to market in partnership with module makers and subsuming its own brand. SolarBridge has not disclosed its sales and has recently replaced its CEO. The startup has been shipping into the U.S. market since 2011 (as well as Canada, Mexico, Taiwan, the Philippines, and Australia, its fastest-growing region), according to SolarBridge's VP of Marketing, Craig Lawrence. Lawrence lists the startup's module partners and customers as including SunPower, AUO/BenQ, ET Solar, Mage Solar, Talesun Solar, Hareon Solar, Blueline Solar, Tindo Solar, and Solarland.
Lawrence contends, "We are the only microinverter company successfully executing on an AC module strategy. We exclusively sell microinverters and monitoring solutions to global and regional module manufacturers that factory-integrate, certify, test, and warranty a complete solution. All the other companies are trying to do this, but we win every head-to-head battle because of our superior reliability, our design (which is specifically built for module integration with today’s highest power modules), and our exclusive AC module business model which avoids the channel conflicts that companies like Enphase, SMA, and Power-One that sell a detached microinverter have."
Another contact at SolarBridge asserts that the firm is gaining strong sales traction with SunPower.
Renesola's microinverter "goes toe to toe with Enphase at a 15 to 20 percent lower price," according to Brian Armentrout, Marketing Director at Renesola (NYSE: SOL) America. "We’re delivering 10,000 units per month in the U.S. alone and about to ink a deal that will add 5,000 to 7,000 more units per month on top of that," he added.
Enecsys VP of Sales and Marketing Kevin Bushby claims that the 60-employee firm has sold 160,000 microinverters worldwide through distributors and in cooperation with module makers. We have learned that one of those module makers is Canadian Solar. Distributors for Enecsys include U.S. Solar Distributing, which also carries Enphase, and SolarEdge.
Enecsys' Gen 2 microinverter is software programmable for 240-watt, 260-watt, or 280-watt operation. Bushby spoke of using his resources efficiently and going after the U.S. market by targeting specific regions such as Hawaii and leveraging the power of distributors. Enecsys and others assume the role as second-source to Enphase.
Power-One was acquired by ABB for $1 billion in April (a few weeks after Advanced Energy acquired REFUsol to become the number-three player in the PV inverter market). ABB already plays in the inverter industry, with more than $100 million expected in 2013 sales. The acquisition of Power-One makes ABB the number-two global supplier of inverters and a credible threat to longtime inverter market leader SMA (which recently became a majority owner of Chinese supplier Zeversolar).
Power-One, selling through strong existing channels, also has a microinverter and is offering installers a $20 per unit rebate for its 250-watt and 300-watt units. Chavonne Yee, Director, Product Management at Power-One notes that its inverter "is addressing the growing market for 300 watt and higher PV panels which are a growing market and allow residential homeowners to increase the PV system sizes installed on residential rooftops." She adds that "Power-One began U.S. installations in August 2012 and volume delivery in March 2013."
Petra Solar has installed over 170,000 AC modules, according to Mary Grikas, VP of Product Marketing at Petra. She also claims that Petra has installed over 22,000 units in the MENA region, with more projects in the pipeline. The founder of Petra, Shihab Kuran, left Petra last year to join SunEdison. It would appear that most of Petra's senior staff has left to form systems integrator Eden Energy.
Altenergy Power Systems (APS), a Chinese-American microinverter firm, has shipped a few megawatts of microinverters for commercial and residential applications -- mostly in China.
Chilicon Power has just started building microinverters for its first large design win of 170 kilowatts (680 modules) in Simi Valley, California, according to a release. Alexandre Kral, the co-founder of Chilicon Power, told GTM he expects to ship approximately 5,000 units in 2013. He claims his firm's microinverter has the "highest peak efficiency in the market" at 96.6 percent, adding, "Our company has been self-funded from day one and has always operated profitably, unlike all the other tier-one microinverter companies in the market."
SPARQ Systems, a Canadian microinverter builder, is partnering with Solartec Mexico, a solar panel manufacturer. Solartec has pledged to deploy solar on 1,000 "small homes" with PV modules using SPARQ's microinverters.
CyboEnergy builds a "mini-inverter" with per-module-MPPT for four modules. Allyson Lin, iEnergy's Marketing Manager, claims that iEnergy has been shipping into the U.S. market since late last year. Involar, LeadSolar, and Samil Power also displayed microinverters at last week's Intersolar.
Falling under the dormant or dead heading are Direct Grid, Azuray, GreenRay, EiQ, ArrayPower -- all VC-funded. As of the end of 2012, over $550 million in private venture capital had been raised by companies seeking microinverter and distributed optimization solutions.
Within the greater module-level panel electronics (MLPE) market, Enphase, SolarEdge (SolarCity is a customer), and Tigo account for 93 percent of the market share, according to GTM Research's MJ Shiao. As he notes, "The first-mover’s advantage has allowed these players to make critical R&D and distribution partnerships and to gain significant market traction ahead of newcomers." (More of MJ's inverter research here.)
He adds, "While the field has not been completely set, the microinverter and DC optimization landscape will play out and likely begin to look like the conventional inverter landscape, where the top five companies dominate market share."