Enphase Energy delivers energy management technology for the solar industry that increases energy production, simplifies design and installation, improves system uptime and reliability, reduces fire safety risk and provides a platform for intelligent energy management. Its semiconductor-based microinverter system converts energy at the individual solar module level and brings a system-based high-technology approach to solar energy generation, storage, control and management.
Enphase Energy, Inc. designs, develops, and sells microinverter systems for residential and commercial markets in the United States and internationally. The company's semiconductor-based microinverter system converts direct current (DC) electricity to alternating current (AC) electricity at the individual solar module level. It also offers energy storage systems, including its AC battery; and energy monitoring and control services. The company sells its microinverter systems primarily to distributors, as well as directly to large installers through original equipment manufacturers and strategic partners. Enphase Energy, Inc. has a strategic partnership with Panasonic Corporation of North America for the development of AC modules. The company was founded in 2006 and is headquartered in Petaluma, California.
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The Company
Enphase Energy delivers simple, innovative and reliable energy management solutions that advance the worldwide potential of renewable energy. Their semiconductor-based microinverter system converts direct current (DC) electricity to alternating current (AC) electricity at the individual solar module level, and brings a system-based, high technology approach to solar energy generation leveraging their design expertise across power electronics, semiconductors, networking, and cloud-based software technologies.
The technology was designed to increase energy production, simplify design and installation, improve system uptime and reliability, reduce fire risk, and provide a platform for intelligent energy management. Since inception, Enphase Energy has shipped more than 16 million microinverters, representing over 3 gigawatts of solar photovoltaic (PV) generating capacity, and more than 739,000 Enphase residential and commercial systems have been deployed in over 110 countries.
The Company was incorporated as PVI Solutions, Inc. in March 2006 in the State of Delaware and changed our name to Enphase Energy, Inc. in July 2007.
Enphase Energy delivers simple, innovative and reliable energy management solutions that advance the worldwide potential of renewable energy. Their semiconductor-based microinverter system converts direct current (DC) electricity to alternating current (AC) electricity at the individual solar module level, and brings a system-based, high technology approach to solar energy generation leveraging their design expertise across power electronics, semiconductors, networking, and cloud-based software technologies.
The technology was designed to increase energy production, simplify design and installation, improve system uptime and reliability, reduce fire risk, and provide a platform for intelligent energy management. Since inception, Enphase Energy has shipped more than 16 million microinverters, representing over 3 gigawatts of solar photovoltaic (PV) generating capacity, and more than 739,000 Enphase residential and commercial systems have been deployed in over 110 countries.
The Company was incorporated as PVI Solutions, Inc. in March 2006 in the State of Delaware and changed our name to Enphase Energy, Inc. in July 2007.
The Products
Enphase Energy designs, develops, manufactures and sells home energy solutions that connect energy generation, energy storage and control and communications management on one intelligent platform. Enphase has revolutionized the solar industry by bringing a systems approach to solar technology and by pioneering a semiconductor-based microinverter that converts energy at the individual solar module level and, combined with our proprietary networking and software technologies, provides advanced energy monitoring and control. This is vastly different than the string inverter approach that only converts energy of the entire array of solar modules from a single high voltage electrical unit, and lacks intelligence about the energy producing capacity of the solar array.
In 2017 Enphase expanded their product offerings by launching the Enphase Home Energy Solution with IQTM, a next generation integrated solar, storage and energy management offering. The IQ platform enables self-consumption and delivers a core value proposition of yielding more energy, simplifying design and installation, and improving system uptime and reliability. The IQ family of microinverters, like all previous Enphase microinverters, is fully compliant with NEC 2014 and 2017 rapid shutdown requirements. Unlike string inverters, this capability is built-in, with no additional equipment necessary.
The Enphase Home Energy Solution with IQ brings a high technology, networked approach to solar generation plus energy storage, by leveraging their design expertise across power electronics, semiconductors and cloud-based software technologies. The Company's integrated approach to energy solutions maximizes a home’s energy potential while providing advanced monitoring and remote maintenance capabilities. The Enphase Home Energy Solution with IQ uses a single technology platform for seamless management of the whole solution, enabling rapid commissioning of the Installer Toolkit; consumption monitoring with a metered Envoy and a consumption tracker; and energy insights from the the Enphase Enlighten SoftwareTM platform’s easy-to-use interface.
Unlike their competitors, who utilize a single-point or traditional inverter, or offer separate components of solutions, Enphase has built-in system redundancy in both PV generation and energy storage, eliminating the risk that comes with a single-point of failure. Further, the nature of their cloud-based, monitored system allows for remote firmware and software updates, enabling cost effective remote maintenance and ongoing utility compliance.
The Enphase Home Energy Solution with IQ consists of four key components -- Enphase microinverters, the AC Battery, an Envoy gateway, and Enlighten cloud-based software:
Enphase microinverters provide highly reliable power conversion at the individual solar module level by introducing a digital architecture that incorporates custom application specific integrated circuits, or ASICs, specialized power electronics devices, and an embedded software subsystem that maximizes energy production from each module. The Enphase IQ microinverters provide a path to substantially lower unit cost, a simplified installation process, and higher performance and enhanced features. In addition, they offer advanced grid functions that are capable of meeting worldwide regulatory requirements. The IQ microinverters also enable AC Module products, further simplifying the installation process, reducing installation time and streamlining logistics. We have several manufacturer partnerships that integrate our IQ microinverter into a PV module to create an AC Module.
Enphase Energy designs, develops, manufactures and sells home energy solutions that connect energy generation, energy storage and control and communications management on one intelligent platform. Enphase has revolutionized the solar industry by bringing a systems approach to solar technology and by pioneering a semiconductor-based microinverter that converts energy at the individual solar module level and, combined with our proprietary networking and software technologies, provides advanced energy monitoring and control. This is vastly different than the string inverter approach that only converts energy of the entire array of solar modules from a single high voltage electrical unit, and lacks intelligence about the energy producing capacity of the solar array.
In 2017 Enphase expanded their product offerings by launching the Enphase Home Energy Solution with IQTM, a next generation integrated solar, storage and energy management offering. The IQ platform enables self-consumption and delivers a core value proposition of yielding more energy, simplifying design and installation, and improving system uptime and reliability. The IQ family of microinverters, like all previous Enphase microinverters, is fully compliant with NEC 2014 and 2017 rapid shutdown requirements. Unlike string inverters, this capability is built-in, with no additional equipment necessary.
The Enphase Home Energy Solution with IQ brings a high technology, networked approach to solar generation plus energy storage, by leveraging their design expertise across power electronics, semiconductors and cloud-based software technologies. The Company's integrated approach to energy solutions maximizes a home’s energy potential while providing advanced monitoring and remote maintenance capabilities. The Enphase Home Energy Solution with IQ uses a single technology platform for seamless management of the whole solution, enabling rapid commissioning of the Installer Toolkit; consumption monitoring with a metered Envoy and a consumption tracker; and energy insights from the the Enphase Enlighten SoftwareTM platform’s easy-to-use interface.
Unlike their competitors, who utilize a single-point or traditional inverter, or offer separate components of solutions, Enphase has built-in system redundancy in both PV generation and energy storage, eliminating the risk that comes with a single-point of failure. Further, the nature of their cloud-based, monitored system allows for remote firmware and software updates, enabling cost effective remote maintenance and ongoing utility compliance.
The Enphase Home Energy Solution with IQ consists of four key components -- Enphase microinverters, the AC Battery, an Envoy gateway, and Enlighten cloud-based software:
Enphase microinverters provide highly reliable power conversion at the individual solar module level by introducing a digital architecture that incorporates custom application specific integrated circuits, or ASICs, specialized power electronics devices, and an embedded software subsystem that maximizes energy production from each module. The Enphase IQ microinverters provide a path to substantially lower unit cost, a simplified installation process, and higher performance and enhanced features. In addition, they offer advanced grid functions that are capable of meeting worldwide regulatory requirements. The IQ microinverters also enable AC Module products, further simplifying the installation process, reducing installation time and streamlining logistics. We have several manufacturer partnerships that integrate our IQ microinverter into a PV module to create an AC Module.
- IQ 6 and IQ 6+ microinverters deliver more power and efficiency, while further reducing the balance of system cost due to their simplified wiring, reduced size and weight. They integrate with AC modules and offer installers faster and simpler installations, saving on soft costs. IQ 6 microinverters support high-powered 60 and 72 cell solar modules up to 330 W DC, and the IQ 6+ pairs with modules up to 400 W DC . The IQ 7, introduced in the first quarter of 2018, is segmented into 3 variants - the 250W AC IQ 7 for 60-cell modules, the 295W AC IQ 7+ for both 60-cell and 72-cell modules and the 320W AC IQ 7X for 96-cell modules. IQ 6 was not compatible with 96-cell modules; IQ 7X fills that gap and will offer even more power and a smaller, lighter and easier-to-install product. IQ 7 is a single worldwide SKU, achieved as a result of our software-defined architecture.
While the IQ 7 products provide the Company with a good platform for growth worldwide starting in 2018, the IQ 8 system, which is expected to be introduced in 2019, is based on our grid-agnostic “always on” EnsembleTM technology, which will allow a solar system to operate independently of the power grid.
One of solar’s biggest challenges is that it is tied to the power grid. If the grid fails and the sun is still shining, there will be no production out of a user’s solar system. To address this limitation, we have invented a microinverter technology that is completely independent of the power grid. The Enphase system’s capability is further enhanced when the Ensemble technology is incorporated into our AC Battery storage solution. With IQ 8, a user can have a system that will continuously provide energy, regardless of the presence or absence of the grid, utilizing solar power during the day and storage at night. We refer to this as “always on.”
The IQ 8 ASIC, as of the end of 2017, is fully functional, demonstrating the feasibility of Ensemble technology. This ASIC has 5 million gates and is made in 55nm technology at TSMC, enabling very high speed digital signal processing. We are continuing to productize IQ 8 and expect to introduce it in 2019. - The Enphase AC Battery, a key part of the Enphase Home Energy Solution, applies the modular architecture developed for microinverter to energy storage. Solar-plus-storage, which includes a AC Battery product, is central to the Company's product strategy. The approach delivers low upfront costs resulting from the AC Battery’s system design and the ease and speed of installation. The AC battery balances safety and performance and is warranted for 10 years.
- The Envoy bi-directional communications gateway is installed at the system location and serves as a hub providing three critical roles: collecting and sending data to Enlighten software, receiving and distributing microinverter firmware or software updates, and managing the use of energy within the system. Homeowners can maximize the value of their solar PV system, taking advantage of self- consumption and time-of-use tariff management opportunities with an expandable platform for evolving uses of energy storage , such as residential peak shaving and grid services. One Envoy is typically sold with each solar installation and can support up to 600 Enphase microinverters, making it compatible for both residential and commercial applications.
- The Company's Enlighten cloud-based software provides the capabilities to remotely monitor, manage, and maintain an individual system or a fleet of systems. The software collects and analyzes system performance information to enable owners and operators to realize the highest performance of their solar PV system. Two versions of the monitoring software are available: MyEnlighten, designed for consumers, which provides performance assurance and Enlighten Manager, available for the solar professional, which provides detailed diagnostic capabilities, as well as fleet management tools.
- Truly Integrated. The Enphase Home Energy Solution with IQ is a fully integrated solar generation plus storage offering from one provider. Designed and manufactured to work together, the Home Energy Solution with IQ is a truly integrated home energy solution.
- Higher Performance. Our microinverter system delivers higher performance by maximizing the energy production of each module. A microinverter at each module overcomes issues such as module- mismatch and soiling or shading which can have a significant impact on string inverter systems. Enphase microinverters also provide greater system availability with no single-point of failure. An independent analysis from PV Evolution Labs has concluded an Enphase microinverter system yields higher performance over systems with string inverters or traditional inverters. We believe that our microinverter systems achieve higher energy production and can generate superior returns on investment relative to competitive solutions for system owners.
- Simplified Design and Installation. Our all-AC infrastructure simplifies the design process and eliminates the typical costs of a complicated DC voltage system for PV or Storage . In addition, our microinverters are installed on the roof and hidden from view , with minimal impact to the aesthetics of a home or building. We also offer additional tools, such as the Enphase Installer Toolkit mobile app or the Enphase IQ Combiner+TM with Enphase IQ EnvoyTM, which offer unmatched simplicity, reliability and ease of installation for solar installers.
- Enhanced Safety. Microinverters and AC Batteries are safer because they process low voltage DC and are isolated to the module level, leading to an all-AC architecture. Our microinverter system does not contain any of the high voltages common to string inverter systems. High voltage arc faults associated with string or traditional inverters are the leading cause of fires of solar PV installations. Microinverter technology mitigates this safety risk.
- Reduced Operations and Maintenance Costs. Our microinverter system is highly reliable with one million power-on hours of testing incorporated into our microinverter design. This high reliability , plus a distributed architecture means ongoing operations and maintenance do not require emergency truck rolls, unlike string inverter or traditional inverters which have a 100% probability of failure leading to full replacement within 10 to 12 years. In addition, with module-level monitoring capabilities, remote maintenance can pinpoint issues, thus reducing any time on site. Finally , the networked-nature of our system enables us to remotely update the firmware and software of the microinverters, reducing ongoing utility compliance costs.
Strategy
Enphase Energy's objective is to be the leading provider of energy management solutions for the solar industry worldwide. Key elements of that strategy include:
- Grow market share in our core markets. Enphase intends to capitalize on their market leadership in the microinverter category and their momentum with installers and owners to expand market share position in core markets.
- Enter new geographic markets. The Company intends to further increase market share in Europe, the Asia Pacific region and Latin America. In addition, they intend to expand into new markets with new and existing products and local go-to-market capabilities.
- Expand product offerings. The Company will continue to make R&D investments to develop all components of their energy management solution and remain committed to providing their partners with best-in-class power electronics, storage solutions, communications, and load control, all managed by a cloud-based energy management system.
- Increase power and efficiency, and reduce cost per Watt. The engineering team is focused on continuing to increase average power conversion efficiency above 97% and AC output power beyond 280 watts. Enphase intends to continue to leverage their semiconductor integration, power electronics expertise and manufacturing economies of scale to further reduce cost per watt.
- Extend technological innovation. Enphase distinguishes itself from other inverter companies with their systems-based and high technology approach, and the ability to leverage strong research and development capabilities.
Sales and Manufacturing
Enphase currently offers microinverter systems targeting the residential and commercial markets in the United States, Canada, Mexico and certain Central American markets, the United Kingdom, France, the Benelux region, certain other European markets, Australia, New Zealand, India and certain other Asian markets. They sell microinverter systems primarily to solar distributors who resell to installers and integrators, who in turn integrate their products into complete solar PV installations for residential and commercial system owners.
Enphase works with many of the leading solar and electrical distributors. In addition to their distributors, they sell directly to large installers, original equipment manufacturers (OEMs) and strategic partners. OEM customers include solar module manufacturers who bundle Enphase's products and solutions with their solar module products and resell them to both distributors and installers. Strategic partners include a variety of companies including industrial equipment suppliers and providers of solar financing solutions. In 2017, two customers accounted for approximately 15% and 11% of total net revenues. Historically, revenues generated from the U.S. market have represented 70%-80% of total revenue.
Enphase outsources the manufacturing of products to manufacturing partners. Flextronics International Ltd. assembles and tests our microinverter, AC Battery and Envoy products. Prices for such services are mutually agreed to by the parties on a quarterly basis, and the Company is obligated to purchase manufactured products and raw materials that cannot be resold upon the termination of the agreement. Flextronics also provides receiving, kitting, storage, transportation, inventory visibility and other value-added logistics services at locations managed by Flextronics. Hong Kong Sinbon Industrial Limited manufactures our custom AC cables. In addition, we rely on several unaffiliated companies to supply certain components used in the fabrication of our microinverter system.
Enphase currently offers microinverter systems targeting the residential and commercial markets in the United States, Canada, Mexico and certain Central American markets, the United Kingdom, France, the Benelux region, certain other European markets, Australia, New Zealand, India and certain other Asian markets. They sell microinverter systems primarily to solar distributors who resell to installers and integrators, who in turn integrate their products into complete solar PV installations for residential and commercial system owners.
Enphase works with many of the leading solar and electrical distributors. In addition to their distributors, they sell directly to large installers, original equipment manufacturers (OEMs) and strategic partners. OEM customers include solar module manufacturers who bundle Enphase's products and solutions with their solar module products and resell them to both distributors and installers. Strategic partners include a variety of companies including industrial equipment suppliers and providers of solar financing solutions. In 2017, two customers accounted for approximately 15% and 11% of total net revenues. Historically, revenues generated from the U.S. market have represented 70%-80% of total revenue.
Enphase outsources the manufacturing of products to manufacturing partners. Flextronics International Ltd. assembles and tests our microinverter, AC Battery and Envoy products. Prices for such services are mutually agreed to by the parties on a quarterly basis, and the Company is obligated to purchase manufactured products and raw materials that cannot be resold upon the termination of the agreement. Flextronics also provides receiving, kitting, storage, transportation, inventory visibility and other value-added logistics services at locations managed by Flextronics. Hong Kong Sinbon Industrial Limited manufactures our custom AC cables. In addition, we rely on several unaffiliated companies to supply certain components used in the fabrication of our microinverter system.
My Path Forward
I found these shares based on a scan of moving averages and the chart of these shares show a rather consistently rising moving average at both the 50 day and 200 day averages. It's actually a rather pretty chart. A closer look at the chart and it becomes apparent that the price tends to bounce off the 50 dma so it might be prudent to buy these shares close to that moving average.
My intention is to begin a buying program with a buy limit below $6. Analysts are setting a price point of $7.50 on these shares but personally I think that's a little low. I expect these shares to move up closer to $10 per share. a move of that much would produce a 66% ROI and that's a very nice return.
I found these shares based on a scan of moving averages and the chart of these shares show a rather consistently rising moving average at both the 50 day and 200 day averages. It's actually a rather pretty chart. A closer look at the chart and it becomes apparent that the price tends to bounce off the 50 dma so it might be prudent to buy these shares close to that moving average.
My intention is to begin a buying program with a buy limit below $6. Analysts are setting a price point of $7.50 on these shares but personally I think that's a little low. I expect these shares to move up closer to $10 per share. a move of that much would produce a 66% ROI and that's a very nice return.
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