Microinverters: A Solar Market That’s “On Fire”

Building clean-technology companies with real revenue on relatively little investment is increasingly possible, and it’s happening in the small-but-exploding market for electronics that boost the power output of solar systems.

Several venture-backed companies are rushing in with new products as they play catch-up to the sector’s leader, Enphase Energy Inc. Whether the competitors will be able to gain ground on Enphase - and what will happen once bigger corporates swoop down on the space - remains to be seen.

“The market is on fire,” said Jason Matlof, partner with Battery Ventures, which backed SolarBridge Technologies Inc., an Enphase competitor, in 2007.

All solar panels produce power in direct current, which must be converted into alternating current used on the grid. This is typically done by central inverters, made by companies like Satcon Technology Corp., SMA Solar Technology AG and Power-One Inc., which deal with DC current that is pooled from a string of connected solar panels. The advantage of central inverters is that they are cheap.

Madrone Capital Partners

Madrone Capital Partners, a private investment firm affiliated with Rob Walton and his family, invests with a concentrated, long-term philosophy. The firm is based in Menlo Park, California.