Solar VC: Microinverter Firm SolarBridge Gets $42M in Strategic and Venture Funding

A PV microinverter startup going after integrated AC modules gets an investment from Exelon subsidiary Constellation’s venture arm.

Eric Wesoff March 07, 2014

Eric Wesoff

Editor-at-Large
Greentech Media

Eric Wesoff is Editor-at-Large at Greentech Media. Prior to joining GTM, Eric Wesoff founded Sage Marketing Partners in 2000 to provide sales and marketing-consulting services to venture-capital firms and their portfolio companies in the alternative energy and telecommunications sectors. Mr. Wesoff has become a well-known, respected authority and speaker in these fields.

His expertise covers solar power, fuel cells, biofuels and advanced batteries. His strengths are in market research and analysis, business development and due diligence for investors. He frequently consults for energy startups and Silicon Valley's premier venture capitalists.

Solar microinverter and integrated AC module enabling startup SolarBridge just raised $42 million from strategic and venture investors.

I have been attempting to recruit VC investors to speak at the annual Greentech Media Solar Summit, and this usually game group has been avoiding me like a dinner check at The Village Pub. Where is the love for solar, cleantech venture investor class? Don't let speed bumps like Solyndra, MiaSolé, Nanosolar, or SoloPower dampen your enthusiasm for the sector. In case you haven't heard, companies like SolarCity and Vivint are acquiring hardware startups. Solar powerhouses like SunPower and First Solar are strong-margin, profitable businesses, and the U.S. and global solar market is setting records and kicking ass. SolarBridge competitor and market leader Enphase is a case study in creating a new market sector. SolarCity and solar-adjacent Tesla have made fortunes for their equity investors, LPs, and shareholders by selling great products to consumers. Solar is experiencing sustained, big, global growth with innovation up and down the value chain while serving trillion-dollar sustainability markets. Yet investors remain pathologically wary.

Where was I?

Oh yeah, at least not SolarBridge's investors. They're game.

Led by strategic investor Constellation Technology Ventures (of Exelon subsidiary Constellation, a retail electricity provider), this Round E for the Austin, Texas-based SolarBridge also included existing investors Shea Ventures, Rho Ventures and Prelude Ventures. Michael Smith, Constellation's VP and chief of Constellation Technology Ventures, has been added to SolarBridge's board of directors. Exelon Corporation is the leading competitive energy provider in the U.S., and Shea Ventures is part of Shea Homes, the largest private homebuilder in the U.S.

We spoke with Michael Smith of Constellation Technology Ventures. He notes that the VC arm of Constellation makes investments in energy startups that complement or disrupt their existing business. The company already has a very diverse C&I solar business, and it sees the SolarBridge integrated microinverter as having better reliability and power electronics than the competition. Smith also views the integration of the unit by the module vendor as a strength, and characterizes the AC module as "game-changing" as the solar market continues to mature.

The startup has raised a total of more than $105 million in VC.

Craig Lawrence, the VP of marketing under new CEO Bill Mulligan, told GTM yesterday that the new funding will be used to develop a large sales and marketing effort, as well as "bulking up in R&D."

Lawrence notes that the "competitive and regulatory landscape [for inverters] is going to get pretty treacherous." He said that the firm is developing next-generation features to meet new utility "command and control" features imposed by CPUC Rule 21. Lawrence spoke of the need for the inverter to provide control over reactive power and ramp rate. He said that a number of other microinverter vendors are not prepared for these requirements.

SolarBridge's panel and integration partners include SunPower, BenQ Solar, Hareon, Mage Solar and ET Solar. The recent GTM Research report The Microinverter and DC Optimizer Landscape 2014 provides detailed information on SolarBridge's price-per-watt selling prices and notes that the company's "cost structure is still the highest in the market, which is a bad place to be in the solar industry."

The report estimates 2013 shipments for SolarBridge at roughly 100,000 units, stating: "The company believed that there was a significant pocket of demand on the premium end of Enphase, with customers willing to pay a premium for a product with enhanced reliability." Enphase is the market leader and shipped 1.6 million microinverters in 2013.

SolarBridge has had some success in Australia's strong residential sector, where its reliability story plays well in a market rife with less reputable vendors.

SolarBridge now has a substantial war chest and the chance to scale in 2014. The company's chief claim remains its reliability. According to Lawrence, "We have a product that is best in class" and "a full solution." He added that SolarBridge will "sell and win" when competing against Enphase on reliability, and suggested that SunPower's extensive vetting of the SolarBridge technology attests that its design "eliminates reliability risks."

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If you're a venture investor smart enough to still be interested in solar and would like to speak to 400 high-level execs on "tackling solar soft costs" at GTM's Solar Summit in Phoenix next month, contact [email protected].