Enphase Energy, Inc. · NASDAQ:ENPH
Enphase Energy — Investor Day (November 2015)
50 slides from Enphase Energy's investor day presentation, November 2015
Slide 1: Analyst Day
Enphase Energy Analyst Day November 2015
Slide 2: Safe harbor
Safe harbor Use of forward-looking statements • This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, including, but not limited to, statements related to Enphase Energy’s financial performance, advantages of its
Slide 3: Agenda
Agenda Paul Nahi Enphase Energy vision Martin Fornage Technology for cost reduction Greg Steele Engineering for cost reduction Darien Spencer Operations and automation for cost reduction Stefan Zschiegner Product cost reduction roadmap Raghu Belur Home energy systems roadmap Stefan Zschiegner Enligh
Slide 4: Paul Nahi
Paul Nahi President and CEO 4 © 2015 Enphase Energy, Inc.
Slide 5: Enphase focus and priorities
Enphase focus and priorities Enphase is executing on its strategy to address market-driven cost pressures in the near term, while positioning the company for long-term growth: [ 1 ] Significantly reduce the cost of a solar system through product cost reduction and simplification of the installation
Slide 6: Enphase goals
Enphase goals [ 1 ] Invest in our next generation technology to reduce costs by 50% in 24 months, towards $0.10 per Watt [ 2 ] Provide our partners with best-in-class power electronics, storage solutions, communications, and load control all managed by a cloud based energy management system 6 © 2015
Slide 7: Enphase in more than 375,000 systems in 95 countries
Enphase in more than 375,000 systems in 95 countries 7 © 2015 Enphase Energy, Inc.
Slide 8: Martin Fornage
Martin Fornage Chief Technology Officer 8 © 2015 Enphase Energy, Inc.
Slide 9: Enphase 10 years of innovation
Enphase 10 years of innovation First predictive First custom First Mixed Next Gen Next Gen Next Gen digital control chip signal ASIC power train power train enclosure system control design first operation prototypes 2006 2015 First microinverter 1 million units shipped, Fourth-generation AC battery
Slide 10: Microinverter design constraints are difficult to balance
Microinverter design constraints are difficult to balance Cost Reliability Efficiency Certifications EMC Thermal 10 © 2015 Enphase Energy, Inc.
Slide 11: General design philosophy
General design philosophy • The System approach is critical • System behavior is defined by Software • Distributed architecture wins • Digital control wins 11 © 2015 Enphase Energy, Inc.
Slide 12: The approach to inverter system design
The approach to inverter system design • Choose a low noise, high efficiency power train • Move to a polymeric enclosure • Simplify the wiring • Simplify the installation 12 © 2015 Enphase Energy, Inc.
Slide 13: Enphase power train and control
Enphase power train and control • Advanced power train features • Fully resonant, soft-switched, bidirectional, single-stage converter • World’s first sub-cycle control capability • Much improved EMC signature • WBG semiconductors can be used to further reduce cost and increase efficiency • Addition
Slide 14: Polymeric enclosure
Polymeric enclosure Low-noise power train allows for polymeric enclosure • Reduced mechanical stress on components • Lowest transformation cost • Higher freedom of design • Improved thermal performance • No ground wire • Embedded bulkhead connectors reduce number of cables needed 14 © 2015 Enphase E
Slide 15: 2-wire cable system
2-wire cable system Polymeric enclosure enables a 2-wire AC cable • Less than half the weight per inverter 2-wire • Easier installation • More flexible • Much smaller bend radius 4-wire 15 © 2015 Enphase Energy, Inc.
Slide 16: AC module
AC module Advances in size, weight and technology enable the AC module • Next level of integration with PV module • Eliminates unnecessary components like extra wire and bypass diodes • Possible removal of PV junction box 16 © 2015 Enphase Energy, Inc.
Slide 17: Greg Steele
Greg Steele Senior VP of Engineering 17 © 2015 Enphase Energy, Inc.
Slide 18: Key technologies to enable cost reductions
Key technologies to enable cost reductions Architectural design and silicon integration Magnetics design Polymer enclosure Cable simplification 18 © 2015 Enphase Energy, Inc.
Slide 19: Where is the cost in the inverter today (M250)?
Where is the cost in the inverter today (M250)? 18% 16% 16% 13% 12% 10% 8% 7% <1% Mechanical Actives VAM IC's Magnetics Cables (AC Passives Fab Other and DC) 19 © 2015 Enphase Energy, Inc.
Slide 20: Where will the cost be in the future (S300)?
Where will the cost be in the future (S300)? M250 S300 Mechanical Actives VAM IC's Magnetics Cables (AC Passives Fab Other and DC) 20 © 2015 Enphase Energy, Inc.
Slide 21: Cost reduction – “By the numbers”
Cost reduction – “By the numbers” M250 2015 Part count 396 ASIC count 1 ASIC gates (millions) 1.8 AC cable wires 4 Weight (kg) 1.66 AC cable weight (kg) 0.985 Max AC power 250W 21 © 2015 Enphase Energy, Inc.
Slide 22: Cost reduction – “By the numbers”
Cost reduction – “By the numbers” M250 S290 2015 2016 % change Part count 396 339 -14% ASIC count 1 1 ASIC gates (millions) 1.8 2.8 +55% AC cable wires 4 2 -50% Weight (kg) 1.66 1.38 -17% AC cable weight (kg) 0.985 0.407 -59% Max AC power 250W 290W +16% 22 © 2015 Enphase Energy, Inc.
Slide 23: Cost reduction – “By the numbers”
Cost reduction – “By the numbers” M250 S290 S300 2015 2016 2017 % change Part count 396 339 250 -37% ASIC count 1 1 3 +200% ASIC gates (millions) 1.8 2.8 5 +178% AC cable wires 4 2 2 -50% Weight (kg) 1.66 1.38 1.15 -31% AC cable weight (kg) 0.985 0.407 0.407 -59% Max AC power 250W 290W 300W +20% 23
Slide 24: Enphase semiconductor development
Enphase semiconductor development • 8th generation • 2.8 million gates • Designed in partnership with TSMC • 30-person design team in Silicon Valley • TSMC 55nm LP CMOS process for SoC 24 © 2015 Enphase Energy, Inc.
Slide 25: Substantial reduction in size and cost
Substantial reduction in size and cost Residential and commercial microinverters M250 S290 S300 25 © 2015 Enphase Energy, Inc.
Slide 26: Design for reliability and manufacturability
Design for reliability and manufacturability Reduced weight and size Simplified Fewer parts enclosure Reduced Smaller Single-sided time and cost to potting board manufacture volume 26 © 2015 Enphase Energy, Inc.
Slide 27: Darien Spencer
Darien Spencer VP of Manufacturing and Operations 27 © 2015 Enphase Energy, Inc.
Slide 28: Global industry-leading operations
Global industry-leading operations • 15% year-over-year cost • Global experts Costs reduction demonstrated Partners • Highly leverageable • >25 year useful life for Quality & • Highly automated microinverters Factories reliability • Global, scalable, flexible • Highest factory yield • Global footpri
Slide 29: Higher manufacturing volume reduces costs
Higher manufacturing volume reduces costs Microinverter cost breakdown 100% - 15% COGS overheads & warranty 12 - 5.0 Value-add manufacturing 13 - 1.5 Product cost impact at 2x volume Bill of materials 75 - 8.5 29 © 2015 Enphase Energy, Inc.
Slide 30: Manufacturing cost drivers continue to improve
Manufacturing cost drivers continue to improve 2013 2015 2017 Bill of materials Sourcing localization Asia/Europe Asia/Europe Asia/Europe/LA Raw material and transformation Manual Semi-automated Automated Component count 425 396 250 Value-add Labor/automation (units/quarter/operator) 1,000 2,500 5,0
Slide 31: Quality and reliability throughout the process
Quality and reliability throughout the process Enphase continues investment in quality and reliability infrastructure with commissioning of New Zealand QA lab 31 © 2015 Enphase Energy, Inc.
Slide 32: Manufacturing automation creates efficiencies
Manufacturing automation creates efficiencies 32 © 2015 Enphase Energy, Inc.
Slide 33: Stefan Zschiegner
Stefan Zschiegner VP of Product Management 33 © 2015 Enphase Energy, Inc.
Slide 34: 50% cost reduction in 2 years
50% cost reduction in 2 years $ per Watt $0.25 $0.20 $0.15 String inverter $0.10 $0.05 $- Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 34 © 2015 Enphase Energy, Inc.
Slide 35: AC Module: A solar module with an integrated microinverter
AC Module: A solar module with an integrated microinverter • Lower cost • Microinverter cost savings: 2 cents per Watt • Module cost savings: 3 cents per Watt • Installation cost savings: 2 cents per Watt 35 © 2015 Enphase Energy, Inc.
Slide 36: AC Module: A solar module with an integrated microinverter
AC Module: A solar module with an integrated microinverter • Lower cost • Microinverter cost savings: 2 cents per Watt • Module cost savings: 3 cents per Watt • Installation cost savings: 2 cents per Watt • Simplified installation and logistics • Simplified design and installation process • Single S
Slide 37: Higher power modules uniquely benefit microinverters
Higher power modules uniquely benefit microinverters Global PV module technology mix (in MW) 100% New technology 90% 80% High power “Mono” 70% 60% 50% 40% 30% Traditional “Multi” 20% 10% 0% 2015 2016 2017 2018 Thinfilm Multi C Si Mono Si New Technology 37 © 2015 Enphase Energy, Inc.
Slide 38: Raghu Belur
Raghu Belur VP of Products and Strategic Initiatives 38 © 2015 Enphase Energy, Inc.
Slide 39: The Enphase home: Complete energy solution
The Enphase home: Complete energy solution Increase revenue per home from +$1,000 to +$6,000 ENERGY GENERATION MANAGEMENT Enphase Enphase S-Series Enlighten Microinverter Enphase Envoy Enphase AC Battery ENERGY USE CONTROL STORAGE 39 © 2015 Enphase Energy, Inc.
Slide 40: Consumption monitoring and disaggregation
Consumption monitoring and disaggregation Enhancing the consumer engagement 40 © 2015 Enphase Energy, Inc.
Slide 41: Enphase AC Battery storage solution
Enphase AC Battery storage solution 1.2 kWh energy capacity, 270W power, 10+ year lifetime • Modular and scalable distributed architecture • Highest lifetime value • Seamless integration • Safe and reliable 41 © 2015 Enphase Energy, Inc.
Slide 42: Enphase storage solution
Enphase storage solution Distributed PV (AC Module) and Distributed storage (AC Battery) PV System Load Center Utility Meter Energy Storage System Managed Load by Enlighten 42 © 2015 Enphase Energy, Inc.
Slide 43: Enphase AC coupled versus DC coupled systems
Enphase AC coupled versus DC coupled systems Value • Efficiency • 2 cycles per day, >95% depth of discharge • Less expensive to install Modular • Pay only for what you need • Expandable Reliability • No single point of failure Safety • No high voltage DC • TUV safety certified LFP versus NCA and NMC
Slide 44: Efficiency in AC versus DC coupled systems
Efficiency in AC versus DC coupled systems (1) DC AC (1) DC DC (4) DC AC (2) AC DC ~88% ~88% (3) RTE + Avg. Interface Avg. + - (3) RTE storage storage - efficiency (2) Losses efficiency Not included (4) DC AC 44 © 2015 Enphase Energy, Inc.
Slide 45: The AC coupled advantage
The AC coupled advantage Enphase’s distributed architecture is the clear choice for retrofits + + - - + + + - - - Interface Enphase AC Battery DC coupled battery with string & DC optimizers No need to replace existing inverters Must upsize inverter to accommodate battery 45 © 2015 Enphase Energy, In
Slide 46: Evolution of use cases for storage
Evolution of use cases for storage Today Aggregated grid services – Supporting grid stability ToU optimization – moving energy from lower to higher ToU periods Time Self-consumption – storing excess PV power to offset expensive rates Economics Backup – storing power for use during a grid power outag
Slide 47: Enlighten demo
Stefan Zschiegner VP of Product Management Enlighten demo 47 © 2015 Enphase Energy, Inc.
Slide 48: Paul Nahi
Paul Nahi President and CEO 48 © 2015 Enphase Energy, Inc.
Slide 49: Enphase goals
Enphase goals [ 1 ] Invest in our next generation technology to reduce costs by 50% in 24 months, towards $0.10 per Watt [ 2 ] Provide our partners with best-in-class power electronics, storage solutions, communications, and load control all managed by a cloud based energy management system 49 © 201
Slide 50: We make solar simple and energy smart.
The Enphase Promise: We make solar simple and energy smart.