UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 17, 2015
ENPHASE ENERGY, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 001-35480 | 20-4645388 | ||
| (State of incorporation) |
(Commission File No.) |
(IRS Employer Identification No.) |
1420 N. McDowell Blvd
Petaluma, CA 94954
(Address of principal executive offices and zip code)
Registrant’s telephone number, including area code: (707) 774-7000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 7.01 | Regulation FD Disclosure |
Enphase Energy, Inc., or the Company, hosted an Analyst Day on Tuesday, November 17, 2015, in New York from 9:30am – 12:30pm ET. The presentation handout, together with a slide setting forth certain cautionary language intended to qualify the forward-looking statements included in the presentation handout, are furnished as Exhibit 99.1 to this Current Report and are incorporated herein by reference. The presentation handout is also available in the “Investor Relations” section of the Company’s website, located at www.enphase.com.
The information contained in this Item 7.01 and in the accompanying Exhibit 99.1 to this Current Report shall be deemed to be “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that Section or Sections 11 and 12(a)(2) of the Securities Act. The information contained in this Item 7.01 and in the accompanying Exhibit 99.1 to this Current Report shall not be incorporated by reference into any filing with the U.S. Securities and Exchange Commission under the Securities Act or the Exchange Act made by the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
| Exhibit Number |
Description | |
| 99.1 | Slide presentation entitled, “Enphase Energy Analyst Day November 2015” | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: November 17, 2015 | ENPHASE ENERGY, INC. | |||||||
| By: | /s/ Kris Sennesael | |||||||
| Kris Sennesael | ||||||||
| Vice President and Chief Financial Officer | ||||||||
Exhibit 99.1
Enphase Energy
Analyst Day
November 2015
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 technology, product cost reductions and market trend.
These forward-looking statements are based on Enphase’s current expectations and are inherently subject to risks and uncertainties. They should not be considered guarantees of future results, which could differ materially from the results set forth in, contemplated by, or underlying this presentation.
Factors that could cause actual results to differ materially from the Company’s expectations are described in the reports filed by the
Company with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934 and we encourage you to review our filing carefully, especially the sections entitled “Risk Factors” in our quarterly report on form 10-Q for the quarter ended September 30, 2015.
Enphase Energy undertakes no duty or obligation to update any forward-looking statements contained in this presentation as a result of new information, future events or changes in its expectations.
2 © 2015 Enphase Energy, Inc.
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 Enlighten demo
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© 2015 Enphase Energy, Inc. |
Paul Nahi
President and CEO
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 process
[2] Create a total energy solution for homes and businesses through the development of new products, features and services
| 5 |
|
© 2015 Enphase Energy, Inc. |
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
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© 2015 Enphase Energy, Inc. |
Enphase in more than 375,000 systems in 95 countries
| 7 |
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© 2015 Enphase Energy, Inc. |
Martin Fornage
Chief Technology Officer
Enphase 10 years of innovation
First predictive digital control system
First custom chip
First Mixed signal ASIC
Next Gen power train control design
Next Gen power train first operation
Next Gen enclosure prototypes
2006 2015
First microinverter system introduced
| 1 |
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million units shipped, |
Enphase expands globally
Fourth-generation technology introduced
AC battery announced
Fifth-generation
Introduced
9 © 2015 Enphase Energy, Inc.
Microinverter design constraints are difficult to balance
Cost Reliability
Efficiency Certifications
EMC Thermal
10 © 2015 Enphase Energy, Inc.
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.
The approach to inverter system design
| • |
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Choose a low noise, high efficiency power train |
| • |
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Move to a polymeric enclosure |
| • |
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Simplify the wiring |
| • |
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Simplify the installation |
12 © 2015 Enphase Energy, Inc.
Enphase power train and control
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Advanced power train features |
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Fully resonant, soft-switched, bidirectional, single-stage converter |
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World’s first sub-cycle control capability |
| • |
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Much improved EMC signature |
| • |
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WBG semiconductors can be used to further reduce cost and increase efficiency |
| • |
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Additional integration opportunities |
13 © 2015 Enphase Energy, Inc.
Polymeric enclosure
Low-noise power train allows for polymeric enclosure
| • |
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Reduced mechanical stress on components |
| • |
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Lowest transformation cost |
| • |
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Higher freedom of design |
| • |
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Improved thermal performance |
| • |
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No ground wire |
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Embedded bulkhead connectors reduce number of cables needed |
14 © 2015 Enphase Energy, Inc.
2-wire cable system
Polymeric enclosure enables a 2-wire A
| • |
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Less than half the weight per inverter |
2-wire
| • |
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Easier installation |
| • |
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More flexible |
| • |
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Much smaller bend radius |
4-wire
15 © 2015 Enphase Energy, Inc.
AC module
Advances in size, weight and technology enable the AC module
| • |
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Next level of integration with PV module |
| • |
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Eliminates unnecessary components like extra wire and bypass diodes |
| • |
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Possible removal of PV junction box |
16 © 2015 Enphase Energy, Inc.
Greg Steele
Senior VP of Engineering
Key technologies to enable cost reductions
Architectural design and silicon integration
Magnetics design Polymer enclosure Cable simplification
18 © 2015 Enphase Energy, Inc.
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
19 © 2015 Enphase Energy, Inc.
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.
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.
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.
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 © 2015 Enphase Energy, Inc.
Enphase semiconductor development
| • |
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8th generation |
| • |
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2.8 million gates |
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Designed in partnership with TSMC |
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30-person design team in Silicon Valley |
| • |
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TSMC 55nm LP CMOS process for SoC |
24 © 2015 Enphase Energy, Inc.
Substantial reduction in size and cost
Residential and commercial microinverters
M250 S290 S300
© 2015 Enphase Energy, Inc.
Design for reliability and manufacturability
Reduced weight and size
Fewer parts
Simplified enclosure
Single-sided board
Reduced time and cost to manufacture
Smaller potting volume
26 © 2015 Enphase Energy, Inc.
Darien Spencer
VP of Manufacturing and Operations
Global industry-leading operations
Costs
| • |
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15% year-over-year cost reduction demonstrated |
Partners
| • |
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Global experts |
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Highly leverageable |
Quality & reliability
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>25 year useful life for microinverters |
| • |
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Highest factory yield |
Factories
| • |
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Highly automated |
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Global, scalable, flexible |
Inventory carrying
Few SKUs
Distribution
| • |
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Global footprint |
| • |
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Low cost |
| • |
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Automated systems |
28 © 2015 Enphase Energy, Inc.
Higher manufacturing volume reduces costs
Microinverter cost breakdown
100%—15%
COGS overheads & warranty 12—5.0 Value-add manufacturing 13—1.5
Bill of materials 75—8.5
Product cost impact at
2x volume
29 © 2015 Enphase Energy, Inc.
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 5,000 manufacturing Process touchpoints 180 96 68 Yield management (cum) 93% 99.5% 99.8% SKU management (lines) 2 SKU-specific 3 universal 4 universal automated + automated automated 2 manual Component lead time (average days) 65 52 45 Depreciation/asset efficiency Baseline +25% +50% COGS overheads Baseline +100%/unit +200%/unit Automation line throughput (number/day/line) 7,500 11,000 15,000
30 © 2015 Enphase Energy, Inc.
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.
Manufacturing automation creates efficiencies
32 © 2015 Enphase Energy, Inc.
Stefan Zschiegner
VP of Product Management
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.
AC Module: A solar module with an integrated microinverter
| • |
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Lower cost |
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Microinverter cost savings: 2 cents per Watt |
| • |
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Module cost savings: 3 cents per Watt |
| • |
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Installation cost savings: 2 cents per Watt |
35 © 2015 Enphase Energy, Inc.
AC Module: A solar module with an integrated microinverter
| • |
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Lower cost |
| • |
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Microinverter cost savings: 2 cents per Watt |
| • |
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Module cost savings: 3 cents per Watt |
| • |
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Installation cost savings: 2 cents per Watt |
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Simplified installation and logistics |
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Simplified design and installation process |
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Single SKU |
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Simplified logistics |
36 © 2015 Enphase Energy, Inc.
Higher power modules uniquely benefit microinverters
Global PV module technology mix (in MW)
100%
New technology
90% 80%
70% High power “Mono”
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.
Raghu Belur
VP of Products and Strategic Initiatives
The Enphase home: Complete energy solution
Increase revenue per home from +$1,000 to +$6,000
ENERGY
GENERATION
MANAGEMENT Enphase Enphase S-Serie Enlighten Microinverter
Enphase
Envoy Enphase C Battery
ENERGY USE CONTROL
STORAGE
39 © 2015 Enphase Energy, Inc.
Consumption monitoring and disaggregation
Enhancing the consumer engagement
40 © 2015 Enphase Energy, Inc.
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.
Enphase storage solution
Distributed PV (AC Module) and Distributed storage (AC Battery)
PV System
Load Center
Utility Meter
Energy Storage System
Managed by Enlighten
Load
42 © 2015 Enphase Energy, Inc.
Enphase AC coupled versus DC coupled systems
Value
| • |
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Efficiency |
| • |
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2 cycles per day, >95% depth of discharge |
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Less expensive to install |
Modular
| • |
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Pay only for what you need |
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Expandable |
Reliability
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No single point of failure |
Safety
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No high voltage DC |
| • |
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TUV safety certified LFP versus NCA and NMC chemistry |
Retrofit
| • |
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Easy to retrofit any solar system |
43 © 2015 Enphase Energy, Inc.
Efficiency in AC versus DC coupled systems
| (1) |
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DC AC |
| (2) |
|
AC DC |
~88% Avg.
+
| (3) |
|
RTE storage |
-efficiency
| (4) |
|
DC ? AC |
| (1) |
|
DC ? DC |
| (4) |
|
DC ? AC |
~88%
+
| (3) |
|
RTE Interface Avg. |
-storage
| (2) |
|
Losses efficiency Not included |
44 © 2015 Enphase Energy, Inc.
The AC coupled advantage
Enphase’s distributed architecture is the clear choice for retrofits
Enphase AC Battery
No need to replace existing inverters
DC coupled battery with string & DC optimizers
Must upsize inverter to accommodate battery
45 © 2015 Enphase Energy, Inc.
Evolution of use cases for storage
Today
Aggregated grid services – Supporting grid stability
ToU optimization – moving energy from lower to higher ToU periods
Self-consumption – storing excess PV power to offset expensive rates Time
Backup – storing power for use during a grid power outage Off-grid – being energy self-sufficient without reliance on the grid
Economics Security Independence
46 © 2015 Enphase Energy, Inc.
Stefan Zschiegner
VP of Product Management
Enlighten demo
Paul Nahi
President and CEO
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 © 2015 Enphase Energy, Inc.
The Enphase Promise:
We make solar simple and energy smart.