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An inverter in every solar panel?

Start-up Enphase Energy raises money to expand the manufacture of microinverters, a decentralized design where each solar panel puts out household current.

Enphase Energy said on Tuesday that it has raised $15 million to ramp up production of its microinverters, a design that it claims significantly boosts the power output and reliability of solar panels.

Rockport Capital Partners led the series C financing, which was joined by existing investors Third Point Ventures and Applied Ventures, the venture capital arm of solar equipment manufacturer Applied Materials.

Enphase Energy's CEO Paul Nahi said the company raised money earlier than anticipated because it's seeing strong demand for its microinverters, which can improve the energy capture of solar panels by 5 to 25 percent.

The microcomputer, or PC, of solar inverters? Enphase's microinverter. Ephase Energy

Solar photovoltaic panels generate direct current from sunlight. An inverter, often placed on the side of a building, is needed to convert that direct current to the alternating current that comes out of electrical outlets.

Typically, one single inverter is dedicated to a rooftop array of panels for a homeowner.

Enphase Energy, by contrast, has built a DC-to-AC inverter that is placed on each single panel.

That design is more reliable than a centralized inverter and more efficient, so panels can generate more electricity, Nahi said. The company started shipping its microinverters earlier this year and has signed on with a number of panel distributors and installers, he said.

Enphase Energy also offers a Web service, where consumers can view performance of panels, helping them spot whether they are operating at full capacity or not.

Nahi predicted that there will be more decentralized inverter companies because of the benefits.

"There's been very little question on the benefits of microinverters, but people didn't think it was possible to get the efficiency levels required," he said. "A microinverter must be developed from the silicon level up to make it work efficiently."

Enphase Energy has been able to improve the DC-to-AC conversion efficiency to around 95 percent, on par with centralized inverters.

Texas Instruments on Monday launched a line of energy-efficient microcontrollers, which can be used for microinverters. Solar companies are investigating these because they can lower the overall system cost by easing installation and eliminating the cost of cables, said TI marketing manager Keith Ogboenyiya.

"Over the next six to nine months, we'll really see whether the microinverter concept will take off," he said.