CEO Interview: Enphase goes big Down Under

Not only did U.S. microinverter manufacturer Enphase recently complete its largest commercial rooftop installation in South Australia, but the company also struck a lucrative supply deal with EnergyAustralia and announced the expansion of its R&D facility in New Zealand – a busy week for one of the world’s leading specialists in the inverter sector. Nevertheless, company CEO and president Paul Nahi found time to speak to pv magazine about these projects and Enphase’s wider ambitions.

Enphase recently announced its biggest commercial rooftop installation in southern Australia, as well as a sizeable supply deal with Energy Australia. Could you give us an indication of the significance of these announcements?

Paul: We view the APAC region as a significant potential growth area, not just for Enphase but for solar in general. We’ve seen time and time again that where you have island states and island nations where the cost of energy tends to be high, you have strong solar markets. APAC has many such energy environments, and coupled with its great insolation Enphase sees this as a region that’s really ripe for solar.

Clearly you have to have the right regulatory policies in place, and all of that is coming, but we remain bullish that there will be huge potential growth in Australia, while New Zealand (NZ) is up and coming, and the rest of the region holds great promise. So by doubling-down on the resources in NZ, we have Research & Development (R&D) activities that can address those markets. We are also growing the sales and marketing team in Australia to service these markets.

All of this is part of a larger geographic expansion phase that includes EMEA and Latin America as well.

There has been ongoing debate that there is a point at which microinverters no longer make sense from a cost perspective when it comes to larger commercial scale installations. How does that cost dynamic play out on commercial rooftops for Enphase?

Paul: What Enphase delivers is a better return on investment. We provide more energy harvest because our uptime is much higher because of the distributed nature of our architecture, and because O&M is simpler and easier, resulting in a much lower LCOE than you would get with a traditional string inverter.

We’ve seen evidence of that, and our market share proves that in the U.S., and we see that proposition now being recognized in Australia. The nice thing about the sales cycle when it comes to these large commercial installations – and 100 kW is not that large, we have many MW and multi MW installations too – is that the cycle is very much about LCOE and ROI, and in those discussions the Enphase value proposition very much resonates.

A common debate about microinverters in very hot climates is that these complicated power electronics on the roof may be susceptible to the harsh elements. How confident are you that these microinverters can stand the test of time, and what kind of data do you have to support that?

Paul: Australia is far from our most harsh climate. We have systems in over 80 countries, including the Middle East and the desert parts of the U.S. where we see extreme temperatures both up and down. Enphase microinverters thrive in those conditions.

If you look at the amount of power being dissipated per square centimeter of surface area, there is more surface area with an Enphase system than there is with a string inverter, and that’s primarily because the amount of power that’s being managed by one single microinverter is in the hundreds of watts, whereas the power being managed by a string inverter or central inverter is measured in the thousands of watts. And there is no greater enemy to reliability than direct heat – which is what you get when you’re dealing with that much power and that much dissipation.

So the physics would tell you that if the design criteria is met properly, you have a better operating condition with a microinverter. For testing, every microinverter model that we produce does not ship until it has had over one million unit hours of testing. Our testing is far more rigorous than any other testing process in the solar industry. We run them under tremendous thermal tests while simultaneously putting them under immense voltage test.

We have 8-9 million units out in the field, some for up to ten years, and so we understand what kind of voltage stresses they are under because we collect data not only on the AC side but also the DC side. So we know what kind of harsh waveforms that are generated under difficult conditions, and we have a database of hundreds of thousands of individual waveforms that we test. This is IP that has been gathered over ten years.

In addition to this rigorous testing, the majority of the components used are all automotive-grade, which is the highest quality you can get. Then we have a series of internal processes that we go to in order to ensure quality. If we didn’t have the highest quality inverter in the world, you would not see us gain the type of market share we enjoy currently.

We don’t see this debate in Australia, the U.S. or France, where we lead. Oftentimes in markets in which we are new people have lots of questions, which is fair, but very quickly they are disabused of the notions they have when they see empirically how well we’ve performed.

But isn’t there an argument at least for greater education? We have spoken with installers in Perth, Australia, where rooftops can get to 60c – not a trivial heat – and there is this worry. What can you tell me about what you are doing there?

Paul: We do have those discussions with installers. Not just in telling installers what our inverters do, but showing them exactly how we test it, the conditions under which the inverter is operating. We also go one layer deeper and show them electrically why it is that we believe they should trust Enphase in different environmental conditions.

A lot of this is very qualitative – if you sit down and evaluate the reliability of the unit and components, and you look at the different operating margins that we provide for each component and see the stresses that we allow and don’t allow, the internal protection mechanisms in place, etc, we can prove to people, empirically, that our units can stand the test of time.

Can you tell pv magazine where Enphase is at with the roll out of its AC battery solution, and what role will the Australian market play?

Paul: Australia will feature prominently in the battery’s launch and roll-out. In Queensland specifically – and maybe other states in the future – there is a desire, a need for self consumption, or zero export, and the only way to achieve that effectively is with a storage solution. I would take that further and say that the success of renewable generation is very much tied to the ability for us to support it with storage.

A first step of that is what we are seeing in Queensland. As a result, you will see that Australia will represent one of the first roll-outs for the Enphase AC battery and for the total Enphase Energy Management solution. The timing hasn’t changed – we expect beta and pilots at the end of this year, and volume shipments in 2016.

Interview by Jonathan Gifford and Ian Clover.

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