SolarEdge Gives an Edge to Solar Installations

In an earlier article highlighting solar company 1366 Technologies, we discussed just how well solar ETFs have performed year-to-date. Now that the last trading day of 2013 is over, we see the Guggenheim Solar ETF (NYSEARCA:TAN) and Market Vectors Solar Energy ETF (NYSEARCA:KWT) have realized gains of 131% and 102% respectively in 2013. One company looking to supply the “picks and shovels” to the burgeoning solar industry is SolarEdge.

About SolarEdge

Click for company website

Founded in 2006, Northern California based SolarEdge employs 270 people across the globe with offices in the US, Japan, China, Germany, and Australia. According to Crunchbase, SolarEdge is financially backed by a total of $85 million in investments so far from the likes of Norwest Venture Partners, Lightspeed Venture Partners, GE Energy Financial Services, and Genesis Partners. A cursory search of the US Patent database shows 19 patents with the company listed as the assignee.

The SolarEdge Portfolio

One critical component in a photovoltaic system is an inverter which transforms the DC power generated by the solar panels to AC power which can then be used by ordinary commercial appliances or fed into a commercial electrical grid. The SolarEdge product portfolio contains three components. The first is the “power optimizer” connectors that attach to the solar panels, the second is the inverter itself, and the third is the monitoring module which also supports smartphones.

Solar_Edge_System

Use of this system is said by SolarEdge to result in 25% more energy with no losses from module power mismatch, partial shading, soiling mismatch, or aging mismatch. The system also provides cost-efficient maintenance with module-level performance data and a presentation of the complete system on a virtual sitemap easily accessible via web browser or smartphone along with automatic alerts on system issues. According to Crunchbase, SolarEdge claims to have established the DC power optimizer segment and says to be leading it with over 70% market share. By Q4 2012, SolarEdge had shipped over 1.6 million power optimizers to more than 40 countries worldwide and in their latest system overview, it states that 2.7 million units (presumably any one component of the system)  have now shipped to over 50 countries worldwide. The “power optimizer” currently sells on Solar Systems USA for around $70.

It is important to note that there is an alternative approach to solar installations which is to use a mini-inverter for each solar panel. SolarEdge addresses this alternative approach with a page on their website showing a comparison between the two methods. Green Tech Media published an article in October 2012 comparing the two methods and concluding that there is a good case for each. Regardless of the pros and cons of each approach, the number of units sold by SolarEdge so far shows their approach is gaining some traction.

Here at Nanalyze, we hold the lion's share of our investing dollars in a portfolio of 30 dividend growth stocks. Find out which ones in the Quantigence report freely available to Nanalyze subscribers. 

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