The future of smart home energy: An interview with Mika Nuotio of Empower Micro Systems

The future of smart home energy: An interview with Mika Nuotio of Empower Micro Systems

Empower Micro Systems is a power electronics provider for residential solar and solar-plus-storage which has recently announced Genesys 8K, its next-generation product that combines the benefits of both microinverters and power optimisers in one simple, storage-ready system. The product will be delivered through licencees, via a technology model that avoids the need for Empower itself to have a global brand and global channels with the support of big banks. Empower relies on its licencees who have those channels and brands so the customer can still benefit from the support of big names with warranties and so forth.

A big advantage of Empower’s Genesys 8K system is that the system is comprised of only two components: the PowerBridge, a module-level Fractal Inverter, and the PowerHub, a Smart Energy Combiner. This significant reduction in components lowers distributor inventory and logistics costs. In addition, streamlining inventory benefits the installer by reducing the time spent installing systems, ultimately lowering costs for consumers. By addressing the many problems experienced by distributors, installers and homeowners, Genesys 8K is fundamentally changing how residential users understand and control their energy use.

REM talked to Empower founder and CEO Mika Nuotio to find out more.

Tell me about Empower and what it does

We founded Empower Micro Systems just over five years ago. The three founders—myself, our Chief Commercial Officer Jon Bonanno and our CTO Dr. Milan Ilic—had previously worked together in power electronics for solar. At the time, we looked at the market dynamics and saw that, in an ideal case, power electronics should be coupled with the generator in a distributed manner. The closer you get to the generator, the better performance characteristics you get from the system.

With distributed power electronics, the challenge is always how to achieve a system that is competitive in the metrics of reliability, efficiency and cost. We believed that we had to use a different technical approach and make distributed power electronics systems that can break through traditional cost, performance and reliability barriers. Our novel scheme achieves this objective without compromise of performance or cost.

First, we looked at system architecture. From the traditional fundamentals in power electronics, you want to operate at high voltage—as in several hundreds of volts. Those devices are typically best suited to higher power machines, like string inverters or central inverters. However, with distributed power electronics, you’re processing power at the lower power level. If you don’t shift the paradigm away from high voltage, then you’ll always be at a substantial cost and performance disadvantage.

It was also important for us to examine and improve upon the approaches taken by industry leaders Enphase and SolarEdge. In terms of the limitations of high voltage, what Enphase has been able to do over the past 10 years or so is an amazing engineering accomplishment. That said, microinverters are severely handicapped by having to operate at a high voltage output device. It is very difficult to get low cost, high efficiency and high reliability at the same time with low power input. With the SolarEdge architecture, the modular level DC-optimisers are low voltage devices, and as a result they can get to very high efficiencies at very low cost and high reliability.

So instead we looked at power conversion and asked, “What can we change from a physics point of view when we only have low power?” Through this thinking, we have developed a low voltage AC output solution, connected in series. Our power electronics architecture allows us to process power at low voltage, change the power electronics in such a way that we can achieve a combination of low cost, high reliability and high efficiencies to remain competitive with DC inverters. That is Genesys 8K.

We are pursuing a technological business model rather than manufacturing products ourselves, as we believe this is the best strategy for sustainable growth. We’re excited to partner with larger global brands and make Genesys 8K the new smart home standard.

Can you tell me a bit more about Genesys Modular Smart Home Energy Platform and what is its function?

With our current generation of technology, we aimed to create a unified platform for energy resources like rooftop PV and energy storage without the use of specialized DC current – enter the Genesys 8K platform.

Genesys 8K is comprised of two components: a modular-level power electronics device, which we call the PowerBridge, as well as the PowerHub, a smart energy combiner that integrates multiple circuits into one single circuit to get behind-the-meter management into the residence. This means we require only two SKUs (Stock Keeping Units) to design any residential system from 2.4 kilowatts to 11.4 kilowatts AC; for comparison, the nearest competitor has eight SKUs. Our SKU consolidation is huge for distributors, as it enhances operating efficiencies, inventory returns, etc.

It was also important to us to do our part to broaden access to solar jobs by simplifying system architecture, making it as similar as possible to standard electrical wiring used by electricians and HVAC professionals. AC output is generally perceived as being easier to use and easier to install because you don’t need to have specialised high voltage DC training.

Genesys 8K was built so that, whether the inverter is connected a PV source or a lithium-ion battery pack, we operate at entirely low-voltage AC. It is very difficult to stack AC as we have, and took us three years to master how to do that reliably. Now that we’re ready to go to market, we have patents issued on our technology and are confident this is the best solution for today’s smart energy homeowner. We are also expanding with a patent on our solutions for electric vehicle (EV) drivetrains.

How does it positively impact the economics of residential solar systems for the consumer?

Understanding that energy economics vary from household to household, energy management providers must be able to optimise a rooftop solar + storage system in terms of power rating and kWh capacity to deliver the best option for each customer. The Genesys 8K is a unified system that provides end-users with a holistic energy management solution that can be configured for the best energy economics.

Furthermore, in the U.S. solar market, two-thirds of installation costs are non-hardware related, or “soft costs” – customer acquisition, profit, installation cost, supply chain cost and many other line items. When you break that down, two-thirds of the soft costs are associated with the supply chain and installation. That is where power electronics can really add value.

Genesys 8K streamlines installation; we make it easier and more efficient for installers to service the market. Having only two SKUs to install simplifies management, especially for smaller installers, as they can buy the same equipment all the time. They can also stock equipment in their van, rather than having to order from suppliers, which can delay a project by a week or two. In some cases, installers are looking to install two or three rooftops in one day. The Genesys 8K platform’s all-AC architecture simplifies installation to accelerate this transactional velocity.

Additionally, by using AC versus DC, we allow installers to pull the wiring inside the building, which mitigates the need for conduit and speeds installation. And because the system is connected in series, it is much easier to install as compared with a front cable complication that a microinverter system needs to have.

To recap, having only two SKUs streamlines the entire supply chain, which means it’s much easier for installers to have all the components they need for solar and/or storage systems. This reduces soft costs for installers, who can pass along those benefits at the homeowner level.

In which countries around the world are you marketing this?

Ultimately, it will be up to our customers to determine which market segments are most important to them. As a company, we are strongly encouraging our licensees to go after the U.S. residential market first. We see an immediate opportunity in the very strong value proposition in the U.S. residential solar market for two reasons: One is that module-level power electronics are 60 percent of the residential PV space in the U.S. right now and expected to grow as a result of the 2017 rapid shutdown requirement, which is being rolled out over the next 12 to 18 months.

The second reason is that the U.S. market has historically been dominated by highly concentrated solar providers. Organisations like SolarCity have sold 70 percent of the volume to a handful of buyers – the rest of the rooftop solar projects have been handled by smaller distributors or mom-and-pop installers. In the last 18 months, however, there has been a shift against this monopoly. Residential solar is becoming a localised game, enabled by all the solar financing offerings that are out there.

The other major market where there is strong traction for hybrid systems is in Australia. In addition, we see Germany, Japan, Mexico and Brazil as emerging solar hotspots that would be a good fit for our technology in the coming years.

For additional information:

Empower Micro Systems

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