“We are looking at a significant market share in India”, Sunil Thamaran, Enphase Energy

The Fremont, California Headquartered Enphase Energy has always travelled the path less travelled. Started in 2006, the solar inverter technology firm went the micro-inverter route, instead of the conventional industry move towards string inverters. Over time, the move has paid rich dividends, with the firm closing 2021 with revenues of $1.38 billion, a strong 78.5% growth over 2020. Most of this, from just the residential+commercial segment it focuses on.

The firm’s microinverters led the charge with shipments of 1,082 MW or 3,033,891 microinverters, even as the Enphase IQ batteries also made their presence felt with 100.2 MW hours of sales. Behind all this is a strong India connect, as the firm has a manufacturing, as well as software development presence in India with almost 1500 employees in total. With the firm finally looking at a market presence in India now, we caught up with Sunil Thamaran, VP and MD, Enphase Energy, who runs the India operations.

Q. Before we get into Enphase and its India operations, tell us about your own move to Enphase, after your stint in semiconductors.

Sunil Thamaran: I spent the initial stint of my career, which was about 20+ years, in the semiconductor domain. Then I joined SunEdison and started learning about solar water pump engineering with a new team that focused on solar water pumping solutions for various markets in India. I also managed SunEdison’s Solar plant design and engineering team that was responsible for various utility, distributed generation and rooftop projects.

Later, I joined Enphase Energy to focus on engineering, to help the US company do a lot more product and software development work out of India. We eventually expanded to do end-to-end product design and product management after setting the initial product support.

Today, we are working in one of the largest solar markets, India, which has an ambitious plan to accelerate its adoption of solar energy. We’ve seen a good success rate in India, with over 1500 employees working with us. The Indian workforce is approximately 50% of the global headcount. We have about 700 employees working in Bangalore and another 700 in Noida. We acquired (DIN Engineering Services’ Solar Design Services business) last year in Noida. We also have a team in Chennai, where we undertake contract manufacturing. In partnership with Salcomp, a high precision manufacturer, we produce Enphase Energy microinverters from Chennai and also export them to the global market.

Q. Where are we in terms of the Indian market itself?

Sunil Thamaran: We are pretty active in India and currently have around 300+ installers selling our solutions and installing our products. Over 50 of them are Enphase installer network partners, who are selected and trained by us. These installers are categorized across tiers of qualification, basis the number of Enphase solution projects they undertake.

Q. Tell us more about the Enphase microinverters? Because, you know, it really has been the defining product for the company. And how has it been accepted in the US, despite, I think, the premium price? And what do you see as the challenges for similar products in India and the opportunity?

Sunil Thamaran: In the US, we are the leading microinverter residential player, with significant market share. The Enphase IQ microinverter offers many advantages over other solar inverters, like string inverters. Being a heavily integrated semiconductor and software integrated device that is barely bigger than a phone, makes the microinverter highly efficient with no cable underlays.

Also, our microinverters are more reliable. In a typical solar system, for instance, in a string inverter, if you have a 10-panel system, you have 10 panels in series on the roof connected to an inverter somewhere in the house. If the inverter fails, the entire system is down. In the case of a microinverter-powered solar system, if one inverter goes down in a panel, the rest will continue to perform, and energy generation will continue. So, there is no single point of failure, while in case of string, if one panel goes down, all go down. Inherently Enphase microinverters offer higher uptime because the system will not fail unless all panels are dysfunctional. Each of our inverters are designed to operate for 25 years, across the world. In India, we have started with a 10-year warranty as we pilot our products here. Nevertheless, customers can of course purchase additional warranty for 25 years at an additional cost.

Delivery and safety are major advantages, especially for a market like India. A typical 10-panel system that uses microinverters would generate only 50 volts DC per panel and send it to the system. But in the string inverter system, there are 10 panels and 500-volt DC on the roof. So, it’s a bigger risk for fire, and many studies have proved this. Safety is a significant winning factor for us. Combining this with our plug and play installation and a monitoring app – the Enphase App, allows users to monitor solar energy production and usage in real-time, see trends on system performance, view every module of the system, and check the account and notifications. Our installers also take care of the regulatory approvals from the local DISCOM, among other services they offer.

Q. When you mentioned the Enphase app, for example, whenever I’ve seen string inverters and rooftop systems, typically you use a single SIM card to kind of track and provide all the information. How does it work? In your case? Is it again, using a SIM card or multiple SIM cards? How does it work?

Sunil Thamaran: Each inverter communicates with the system through a cloud gateway. There will be a modem device in every house called the cloud gateway. And that is now connected either via Wi-Fi in the house or via Bluetooth or a single SIM-based modem connection.

Q. Okay, so tell me I just want to understand this pricing bit a little bit more now. Because typically, when we talk about a solar system cost, for the inverter, the typical share price is around seven to 8%. Would that be a correct fit for you?

Sunil Thamaran: Today, Enphase microinverters do have a higher cost when compared to string inverters. But what we are delivering generally are higher efficiency, lower risk products often with a longer warranty. And, of course, because our inverters are simple and modular, maintenance is easier. Add to that our installer network, and we are confident about the value we can deliver.

Q. How big a market opportunity does India have for Enphase Energy right now?

Sunil Thamaran: The Indian market is still evolving, especially the commercial and residential market. So, I wouldn’t put a number on it just yet. What we are trying to target is significant market share growth in the next two years.. As a premium product offering, that means we will target the top end of the market, focus on that, and plan accordingly.

Q. Enphase Energy has now got storage solutions, along with the microinverters. Are these going to be sold together?

Sunil Thamaran: Right now, we are not selling storage in India. The storage product, Enphase battery, was released in the US in 2020. The product is gaining good momentum there. It is made available as a standalone system. We want to give options to customers seeking solar or storage or solar + storage solutions. We found that there are a lot of individuals, apartment owners, and villa homeowners looking for a high level of reliability and storage system like the one we have. So, we are now working to make it available in India by the end of this year.

Q. What do you think of India’s targets in terms of the you know, let’s say 300 gigawatts of solar by 2030? Are those really doable? And what’s the biggest challenge getting those numbers right now.

Sunil Thamaran: The segment we operate in is the small commercial and the large residential segments. The biggest barrier that we see is the awareness among people.

Customers are at times willing to pay but are unsure of the value they get. There are so many cases of poorly installed systems or installers going out of business. So, it is not the price that acts as a primary barrier; once people are assured about what they are getting, they are quite keen to adopt.

Today, we see an increasing demand for Enphase specific products. We have built a comprehensive digital platform for handling our leads wherein with a PIN code and approximate monthly electricity bills, we can immediately recommend a good solar system. Once a user accepts the proposed rate, we connect them with an installer from our network and ensure that the project is monitored end to end, right from material selection and design to the output and efficiency. So, Enphase Energy takes away the stress of investing in a solar system. This process has worked well for us and will be one of the driving factors in a market like India.

Q. We have seen Enphase stay with a focus on the commercial and residential segment due to the premium pricing, with the utility segment ruled out for now. But what is the maximum size you typically look at?

Sunil Thamaran: The largest project that we worked on is a ground-mounted commercial system that is about 4.5 megawatt with 14,000 microinverters. The installation is near Hampi, in Karnataka. That was incidentally the largest project for Enphase Energy in the world. With the support of the client, we have been able to set up a system that is generating solar energy very well, and we have also learnt a lot in the process. We have undertaken a one-megawatt rooftop solar project for a warehouse near Tumkur. We have also done several projects in the range of 100-750 kW, but our core opportunity is towards the lower end of 100-150 kW for showrooms, apartment complexes, schools, etc.

Q. So, what about the residential rooftop segment? Actually, in India, the 2-to-10-kilowatt segment? How big would that be for you?

Sunil Thamaran: We are growing well in the residential market too. We have thousands of systems installed across the country now. As I said, these are early days and our ultimate goal is to grab significant market share over the next two years.

Q. In Europe last year for the first time, we saw corporate demand exceeding utility demand in terms of solar capacity created. So, do you see that happening in India also, at some stage?

Sunil Thamaran: Yes, it is happening. Several multinational companies are trying to go solar and we are working with a couple of them. There are also players like IndiQube, (a co-working space) in Bangalore, that is getting all their buildings to go solar and we are working very closely with them.

Q. Which are the markets you see leading the solar push in India? We had the Southern states lead the charge in the early years, and then states like Rajasthan and Gujarat start to catch up recently. Do you see a second southern resurgence now?

Sunil Thamaran: Yeah, I think we will see a strong push now. Tamil Nadu was having a problem with net metering policy, but that is changing now and we are already seeing a lot of pull from the market. Kerala has been really fantastic for us in the last two years. Karnataka is where we really started our work and we continue to see a strong demand. In the north, we have some good distributors and installers in the NCR region who have been exploring regions like Rajasthan, Gujarat, Punjab, and Delhi, which are also emerging as key markets. So yes, we do see a major opportunity opening up.

Q. You’ve been on the research side, working on semiconductors to solar, engineering side, from a marketing perspective, how do you approach a market like India? What are you looking at?

Sunil Thamaran: There are three things we do. Number one, we partner with the best players, top installers and distributors to provide quality service to our customers. We also have a strong installer network with over 300 partners. We plan to expand this network base in India with the right training and inputs. In time, we want to connect with over 2000 installers and truly tap the potential in the market.

Second being- India is a digital and ecommerce friendly market. We launched our digital platform as an experiment in India. We have observed people want to research and check online before investing in anything. Increasingly people are open to purchasing a wide range of products online. And that is a big driver for us.

The third thing is that we offer a microinverter product that has numerous advantages over other solar inverters. Among others, it has the advantage of being very small. In a rural setup, you can even have one panel, one inverter set up. We are exploring how we can create products specifically for India and build these niche opportunities.

All three things are work in progress.

Q. You have your IQ series right now for the microinverters which is paired with a single panel effectively. Now we’re seeing this whole industry shifting towards very high output panels from you know, around 400 Watts earlier, we’re talking about 600 Watts or higher. Are your microinverters customized for this, can they work with those panels? 

Sunil Thamaran: Enphase Energy has introduced different versions of the microinverter. Our core strength is that we are a software-driven firm, enabling us to offer different options based on the evolving market demands. The Indian market for us is now a 500 plus watt kind of market, and hence we introduced a higher wattage microinverter. We also plan to bring in a dual-module micro-inverter, moving a little bit from a microinverter with a single panel, to a single microinverter for a two-panel model. But that’s a product that will again help us both ways- address higher wattage requirements as it can service 900 watts plus output from the two panels and also to address our cost optimization efforts. It may be by the end of the year or early next year, that we see these micro-inverters coming to India.

I would also like to share that in 2020, we partnered with Salcomp, which is in Chennai, a European multinational manufacturer of microinverters. We have built a capacity that can manufacture about 6 million units annually. That gives us a lot of diversification, as we don’t need to depend on China and Mexico, our other manufacturing centres. The Made in India microinverters are exported and also sold in the Indian market.