In this clip from "The High Energy Show" on Motley Fool Live, recorded on Feb. 8, Motley Fool contributors Travis Hoium and Zane Fracek discuss the decade-long battle between microinverters and string inverters and analyze the advantages that microinverters offer.
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Travis Hoium: Zane, what do you have for us?
Zane Fracek: We talked about Stem (STEM 4.94%). I wanted to talk about Enphase Energy (ENPH 2.69%), the ticker there is ENPH. Plays right into the differentiated solar market that you were getting at earlier, Travis. That's because they focus on something called microinverters. We talked about the inverter systems and there's basically two types. There is string inverters, that's what SolarEdge (SEDG 4.15%) mostly makes, another big inverter company. But then, the microinverters are the other type. They're different because, instead of aligning all of the panels in the string where basically all of the energy is collected and then it gets changed to AC power, the microinverter goes on the back of the panel. It's much smaller and it doesn't add the panel level. The advantage here is that, if part of your system is shaded, you're not losing energy production because of that. With the string system, say, if one panel in the strength setup is 50% shaded, then you're going to lose a lot of power output, even if the other panels are OK just because of how it's wired. But with the microinverters, each panel can be separate and you can have a lot more power output. I think as costs come down, hopefully, in the future it won't make sense to use a string inverter.
Hoium: This has been a decade-long battle between microinverters and string inverters. Micros seems to be winning the day, but there was also a huge tailwind for both of those, when, in the U.S., it's mandated that you have to have a module-level power electronics. Meaning, you have to be able to basically shut down a single solar module on your roof. It couldn't just have 50 wires running to one inverter. It was basically mandated that you had to either buy something from Enphase or from Solar. That was an interesting dynamic from a regulatory standpoint.
