U.S.-made optimizers to maximize manufacturing tax credits

Enteligent, maker of solar power optimizers and solar electric vehicle charging solutions, is relocating its manufacturing operations to the United States. The move is primarily driven by the desire to maximize the benefits offered by the Inflation Reduction Act’s 45x Advanced Manufacturing tax credit, thereby enhancing the offerings for their inverter partners.

Sean Burke, the CEO of Enteligent, discussed with pv magazine USA the details of this transition, emphasizing its role in optimizing the available tax incentives under the IRA.

Burke underscored the financial incentives tied to the move, explaining, “when U.S.-based inverter manufacturers sell their hardware fully integrated as a full system solution, then those companies can claim the IRA 45x $0.11/W transferable tax credit.” Without the inclusion of the optimizer, residential solar inverters secure a credit of $0.065/W, and commercial units a lesser $0.02/W.

This strategic shift aligns with industry trends, notably First Solar’s recent sale of $700 million in tax credits to fund the development of its solar panel manufacturing operations in the U.S.

Highlighting its specialized niche in the market, Burke noted, “We are the only supplier of power-line communication module-level power optimizers that can be integrated with a DC-coupled PV inverter system.”

Burke candidly shared the operational hurdles this transition entails. The shift demands a comprehensive capital investment, covering not just the physical factory and manufacturing lines but also the human resources required for operation. This also marks a shift from their prior business model, which had primarily focused on design, sales, and marketing, and outsourced manufacturing.

Enteligent is actively collaborating with prominent industry partners like Sol-Ark and Solis. Their 0900-80V optimizers are already integrated into Sol-Ark’s residential and commercial units, and both Sol-Ark and Solis incorporate Enteligent’s transmitters. 

The units, boasting Sunspec certification, adhere to industry standards ensuring interoperability and secure communication. They offer rapid shutdown capabilities, along with module output optimization to mitigate issues like shading, and provide detailed module-level data. This granular data is relayed to inverter manufacturers, allowing seamless integration into their user-facing inverter information interfaces.

Enteligent also streamlines the installation process with an app designed for quicker commissioning of systems.

Currently, the hardware production is situated in the Philippines, following a relocation from China. Enteligent anticipates having U.S.-manufactured units ready for their partners by the second quarter of 2024. The core technical components, such as microprocessors, are already sourced from U.S.-based Texas Instruments, while other components like capacitors, cables, connectors and miscellaneous items are produced globally.

Burke did not provide specific insights on the potential impact of these domestically produced units on the 10% domestic content tax credit, a significant consideration for stakeholders in the solar power sector.