Recent stock prices of Petaluma-based Enphase Energy trace a grim trajectory across a dark sky. The stock gleamed at nearly $17 a share in September 2014 then plunged some 94 percent in the past two years to lows near 97 cents in December. At recent prices near $1.50, Early investors who paid $6 a share at the initial public offering in March 2012 lost 75 percent of their money if they held.

A technology startup in 2006, Enphase innovated by equipping each solar panel with a small inverter that changes direct current from solar cells into alternating current used in household circuits. AC electricity travels more efficiently than DC, loses less energy and is safer. The inverters run at 97 percent efficiency.

As Enphase started a decade ago, the solar industry appeared bright. A wholesale watt (voltage x amps) of panel capacity sold for nearly $5 then because a shortage of crystalline silicon drove prices up. Now a solar-panel watt of electricity sells for just 65 cents, dipping a dime from a year ago and down 86 percent from the top.

In August 2016, Enphase launched measures to survive near-term challenges then reenergize the company long term. It began shipping batteries to solar-array customers in Australia and New Zealand as a new trickle of revenue to augment sales of panels.

In September Enphase held a public offering for 13 million shares at $1.20, aiming to reap $15 million before expenses. The same month, the company laid off 11 percent of its employees, and TheStreet Ratings rated Enphase stock over a 12-month horizon as a “sell,” graded D-, with lackluster growth in earnings per share, poor net income and return on equity, bad profit margins and high debt.

Those 2016 shots at revival weren’t enough. In January 2017, Enphase reported a $5 million investment by John Doerr, chairman of venture-capital giant Kleiner Perkins Caulfield & Byers, and another $5 million by Thurman John Rodgers, former CEO of Cypress Semiconductor. Rodgers will join the Enphase board. At the end of January Enphase did a bigger layoff of 18 percent —75 full-time employees plus a dozen contractors.

“They didn’t make it conditional on the layoff,” said Paul Nahi, CEO of Enphase, of the $10 million from Rodgers and Doerr, who got their shares at a deep discount — about $1. But “it was very important for them that we achieve profitability as quickly as possible. That was one of the elements.”

Enphase lost $18 million in a recent quarter, nearly $60 million over a year with $350 million revenue. It has an accumulated deficit near a quarter of a billion dollars.

Investments by “T.J. Rodgers and John Doerr were a tremendous sign of support,” said Nahi. “They see the potential for Enphase.” But for a company losing $18 million a quarter, how far does $10 million go? New offerings also can dilute the value of existing shares. The T.J. Rodgers investment involved 5.4 million shares and represents 8 percent of the share class, according to the company’s Schedule 13G filing with the SEC on Jan. 9.

“In reference to the reduction in force, it is an unfortunate reality in this business,” Nahi said. Overall savings from the layoffs in 2017 will be in the tens of millions of dollars. He expects Enphase to be “profitable in the second half of 2017. We took action in order to pull profitability in from the second half. We have a very aggressive cost-reduction curve,” he said.

“It was fairly evenly distributed,” Nahi said of the layoffs, which left about 350 employees. About 100 work in manufacturing and production. Product testing, development and research laboratories are located in the Petaluma facility. “QA (quality assurance) is a very important element of what we do,” Nahi said.

Early versions of Enphase inverters for panels with 175 watts and 190 watts had unacceptably high failure rates. The current inverters for 300-watt panels have improved performance. “We did have a higher-than-expected failure rate with the 190,” Nahi said. “That was about six years ago. Today we are known to be the highest-quality product in the solar industry. We learned and made all kinds of changes.”

Nahi estimates that the company commands about 30 percent of the U.S. market for micro-inverters designed for solar panels, and 40 percent in France. Enphase is the top seller of micro-inverters in Mexico, Puerto Rico and New Zealand. About 75 percent of the company’s $350 million revenue comes from the U.S.

Enphase’s micro-inverters are made mostly in China, with some manufactured in a Milpitas facility for customers who prefer made-in-U.S. products.

Manufacturing is done under contract with Flex Ltd., previously called Flextronics, headquartered in Singapore.

Most solar-panel systems are intertied to the electric grid. Solar-powered homeowners and businesses used to sell power to the grid when they had more than needed during peak sun periods. That option is diminishing in most locations, so Enphase introduced its battery storage units so energy is not wasted.

Nahi insists there is a bright future for Enphase. “Solar is still in its very early days,” representing less than one percent of energy generated in the United States, he said “The cost of solar continues to come down. The cost of utility energy continues to go up.”

Already in about a dozen states, solar energy is less expensive than utility energy, including California, Louisiana, South Carolina and Texas. “By 2020, that number will be north of 45 states,” Nahi predicted.

But Enphase Energy faces daunting challenges to growth, to its own survival. Solar-panel producers in China and other countries drive prices down with massive volume. An August 2016 study from the Dept. of Energy’s Lawrence Berkeley National Laboratory cited solar-energy system pricing at an all-time low. Installed prices for residential photovoltaic systems in 2015 fell 5 percent. Prices for utility-scale PV systems dropped 12 percent and continued to fall in 2016.

“We have the goal to get back to profitability,” Nahi said, selling more sophisticated and expensive technology than much of the market.

“This is about transformation,” co-founder Raghu Belur said of the company’s move to smart-energy systems and a big-data platform. “Solar was the primary driver. For us to survive, we have to transform ourselves into an energy company. That transformation began at the end of last year. There are perturbations (layoffs). That’s what we are in the midst of.”

James Dunn covers technology, biotech, law, the food industry, and banking and finance. Reach him at: james.dunn@busjrnl.com or 707-521-4257