Tomorrow, Enphase will announce that it has jumped into the operations and maintenance (O&M) business in a big way with the acquisition of Next Phase Solar, a provider of O&M services for the PV solar industry. NPS has a portfolio of more than 400 megawatts, split about 70 percent commercial solar and 30 percent residential.
Founded in 2009 and helmed by Adam Burstein, Next Phase has "a staff of trained field service engineers and technicians spread across America." The firm has about 30 employees, a strong East Coast presence and thousands of PV sites under contract for field services including asset management, warranty compliance, solar array cleaning and system commissioning. The transaction price of the deal was not disclosed.
Late last year, we reported that microinverter pioneer Enphase was adding an O&M arm to its hardware sales business. The Enphase execs we interviewed envisioned the O&M team eventually servicing other non-Enphase technology with a small but growing fleet of orange trucks. That vision is now in effect at Enphase, as its Enphase Energy Services business has about 450 megawatts under management.
GTM's Director of Solar Research MJ Shiao noted that "Next Phase was the only independent company that had an actual residential O&M portfolio. O&M is a clear expansion strategy for Enphase, and the firm is uniquely positioned to figure out the business model based on its market share, as well as the fact that all of its systems have a monitoring device that the company controls."
A recent report from GTM Research, Megawatt-Scale PV O&M and Asset Management, forecasts the global market for megawatt-scale O&M surpassing 88 gigawatts by the end of 2014, and almost tripling by 2018, driven predominantly by China, the U.S. and Japan. The report suggests that the competitive landscape of the PV O&M market is country-specific, with different firms leading in each of the top solar markets. Price and service levels tend also to vary across geographies, with differences as great as 100 percent between low-price markets like the U.S. and higher-price markets like Italy.
Chint Power Systems America has an O&M partnership with Next Phase Solar for its inverter customers, as does solar loan financier Dividend Solar.
We spoke with Martin Rogers, Enphase's VP of worldwide customer service and support. He told GTM that the Enphase O&M business provides a proactive solution that can spot reliability issues before they become failures and schedule the proper time for the system to be cleaned or for a truck to roll. He said that the O&M service "allows crew time to be spent generating revenue -- not messing with O&M."
Rogers said that Enphase now offers a complete service in solar, adding that the acquisition provides the firm "automatic credibility," as well as bringing a mix of vendors, including sellers of string inverters. According to Rogers, if "service is your religion," then you are necessarily "non-denominational" about the brand of product being serviced.
Rogers noted that O&M is "a pretty young part of our industry," but that it's a very common service offering in other industries such as HVAC or appliances.
The VP observed that firms such as Schneider Electric have profitable, billion-dollar service businesses and that he would like "to bring solar photovoltaic asset management and operations and maintenance into the mainstream conversation."
Figure: The Crowded O&M Vendor Landscape
Source: GTM Research, Megawatt-Scale PV O&M and Asset Management