Good morning, welcome to Enphase Energy's 2021 Annual Meeting of Stockholders. I would now like to turn the call over to Badri Kothandaraman, Enphase Energy's President and CEO. Please go ahead.
Good morning. On behalf of Enphase Energy's Board of Directors, officers, and employees, I am very happy to welcome you to Enphase Energy's 2021 annual stockholders meeting. The meeting will officially come to order. The time is 9:00 A.M. Pacific on Wednesday, the May 19th, 2021, and the polls are now open for voting on all matters to be presented. Due to the various continuing restrictions and precautions we are taking to help promote the well-being and safety of others during COVID-19 pandemic, we are again holding our annual stockholders meeting online, hosted by Broadridge Financial Services. We believe that hosting our meeting online will allow us to reach a greater number of shareholders who can participate from any location and still have the ability to vote and ask questions online.
This meeting is being recorded and will be available for a year in the events section of our IR website. Before we proceed with the formal business of the meeting, I'd like to introduce the members of the board. Mr. Steve Gomo, Director and Chair of the Audit Committee. Ms. Jamie, Director. Mr. Ben Kortlang, Director and Chair of the Nom and Gov Committee. Joe Malchow, current Director and nominee. Richard Mora, Director, and T.J. Rodgers, Director and Chair of the Compensation Committee. Also joining us today online are Eric Branderiz, EVP and CFO. Raghu Belur, Vice President and Chief Products Officer, and Lisan Hung, Vice President, General Counsel, and Corporate Secretary. Members of Deloitte & Touche, the company's independent registered public accounting firm, are also online and available to respond to questions.
Today, we will conduct the formal business of the meeting as set forth in the notice of annual meeting and proxy statement. After that, I will give a brief report on the company and answer questions as time permits. With that, I would like to turn the meeting over to Lisan Hung to conduct formal business of the meeting. Lisan?
Thank you, Badri. Today we will present proposals one through five as set forth in the proxy statement submitted by approval by our board, and then we will take questions from the stockholders related to the proposals. In order for us to conduct an orderly meeting, we ask that you follow the rules of conduct, which can be found under the meeting materials in your online portal. Stockholders who are attending this meeting with a valid 16-digit control number may submit questions or comments after each proposal. To ask a question or submit a comment, click on the Ask a Question button on your screen. We will try to answer questions submitted that are germane to the proposals as and if we have time.
I have at this meeting a complete list of the holders of record of the company's common stock as of March 22nd, 2021, the record date for this meeting. The list is available for inspection by stockholders of record during this meeting through the online portal. I also have an affidavit from Broadridge Financial Services, Inc, certifying that on April 7th, 2021, a notice of Annual Meetings of Stockholders of the company was deposited in the United States mail to all stockholders of record at the close of business on the record date of March 22nd, 2021. At this time, I'd like to introduce Ms. [Patricia Hudson] of Broadridge, who is participating virtually and has been appointed to act as Inspector of Election at this meeting. Ms. [Hudson] has taken and subscribed the customary oath of office to execute her duties with strict impartiality.
We will file this oath with the records of the meeting. Ms. [Hodson's] function is to decide upon the qualifications of voters, accept their votes, and when the balloting on all matters is completed, to tally the final votes. I've been informed by Ms. [Hudson] that proxies have been received for 108,448,344 shares of common stock out of the 135,596,126 shares of common stock outstanding on the record date of March 22nd, 2021. Based on this number, we have a quorum for the meeting, and we may now carry on this official business. As mentioned earlier, the polls are open for online voting. After all matters for voting have been presented, we will close the poll.
We will not accept ballots, proxies, revocations, or changes after the closing of the polls. If you have already submitted your vote by proxy and do not wish to change it, you do not need to do anything, and your shares will be voted as previously instructed. If you intend to vote and have not already done so, you must submit your vote online now in order for it to be counted. Click the Vote Here Now button to vote. We will now proceed with the formal business of the meeting. There are five proposals to be considered by the stockholders at this meeting. We will take questions from stockholders related to the proposals after they have been presented. The first item of business is the election of two nominees for directors to serve until 2024, the annual meeting, and until their successors are elected.
The nominees for Class III directors recommended by the Board of Directors are Mr. Badri Kothandaraman and Mr. Joseph Malchow. I now declare the nominations closed. The second item of business today is the advisory vote on the executive compensation of the company's named executive officers as described in the proxy statement. The third item of business today is the approval of the amendment to the certificate of incorporation to increase the number of authorized shares of common stock of the company to an aggregate of 300 million shares. The fourth item of business today is the approval of the Enphase Energy, Inc 2021 Equity Incentive Plan.
The fifth and final item of business today is the ratification of the selection by the Audit Committee of the Board of Directors of Deloitte & Touche LLP as the independent registered public accounting firm of the company for the current fiscal year ending December 31st, 2021. At this time, I will pause briefly to review any online questions or comments related to the proposal. There being no questions on the proposal, the time is now 9:08 A.M. Pacific, and the polls are officially closed. Ms. [Hodson], please present the preliminary report of the inspector of election.
Based upon the preliminary results, my report as the inspector of election covering the proposals presented at this meeting is as follows. The proposal to elect each of the aforementioned nominees for director of the company's Board of Directors is carried. The resolution concerning the advisory vote on the executive compensation of the company's named executive officers is approved. The amendment to the certificate of incorporation to provide for an increase in the number of authorized shares of common stock to an aggregate of 300 million shares is approved. The proposal to approve the Enphase Energy 2021 Equity Incentive Plan is approved. The selection of Deloitte & Touche as the company's independent registered public accounting firm for the fiscal year ending December 31, 2021, is ratified.
Thank you, Ms. [Hodson]. We expect to report our preliminary voting results, or as available to us on a timely basis, our final voting results on a current report on Form 8-K to be filed with the SEC within four business days after the end of this meeting. If not earlier reported, we expect to report our final voting results in an amendment to our Form 8-K within four business days after the final results are known to us. The formal portion of the meeting is now concluded, and we will now provide a brief management presentation. Please note that management may be making forward-looking statements about the company's current plans and expectations. Actual results may differ materially from current plans and expectations, so I encourage you to read our SEC filings, where we discuss the risks inherent to our business.
You will find detailed discussions in our filings with the SEC, including our annual report on Form 10-K for fiscal year 2020 and our quarterly report on Form 10-Q for the quarter ended March 31st, 2021. Please note that non-GAAP financial measures referenced during Mr. Kothandaraman's presentation are reconciled to their most directly comparable GAAP financial measures found in the investor presentation posted on our website at investor.enphase.com. With that, I will turn over the call to Enphase Energy's President and Chief Executive Officer, Mr. Badri Kothandaraman.
Hi. Let's go to page eight. A quick introduction about the company. Enphase is a leading microinverter-based solar plus storage company. We are growing fast. As of March 31st, 2021, we have 1,595 employees. We're headquartered in Fremont. Our customers are installers, homeowners, the distributor partners, and module partners. We have shipped more than 34 million microinverters cumulatively till date, representing approximately 9+ GW. We have over 1.5 million systems in more than 130 countries. Our 2020 annual revenue was $774 million. We have shipped more than 137 MW hours of energy storage. Also notable, our 2020 non-GAAP net income was $188.5 million and was a record year for non-GAAP profitability. Page nine shows our financial performance. There are four colors here. You can see they are for 2018, 2019, 2020, and 2021, respectively.
As you can see, the yellow bar, which is the latest, which is 2021. We reported revenues, Q1 revenues, which were an all-time record for the company, $302 million in Q1 of 2021. Similar record on the quarterly non-GAAP gross margins. Our operating expenses are just under 15% of revenue. Consequently, our operating income, for the quarter that just ended, Q1 2021, is 26.6%. All of these are non-GAAP numbers. We are doing well and healthily profitable. Page 10. Our core differentiation, I've talked about this a number of times. Semiconductors, software with the power of a technology like Ensemble, which is an energy management technology. The semiconductor integration helps us to achieve outstanding form factors.
There, the name of the game for us is to innovate and go towards different types of semiconductors, like what I talked about in the earnings call, namely gallium nitride-based semiconductors, which support much higher power. Software is critical for us. Various kinds of software, cloud software, embedded software, firmware in the devices. We are an IoT company, Internet of Things company. Every one of our microinverters can be accessed from outside. With a stroke or with a push of a button, we can totally transform those microinverters. They can do bi-directional, meaning they can do AC to DC or DC to AC just with a stroke of a button. That control is extremely important for us. These microinverters are software-defined microinverters. Ensemble energy management technology helps us to basically, there are two things there. One is we have grid-forming technology.
You see IQ8, which we will introduce shortly, microinverters on the roof. Basically, that is the world's first grid-independent microinverter, and we already use that today in our batteries. The technology that supports that is Ensemble technology. In addition to that, the Ensemble also enables energy management between all of the resources that you see on the stage on the right-hand side. Solar, storage, loads, even fuel cells, generators, electric vehicles, and obviously the grid. Managing all of these is no mean simple. We need a consistent methodology for that. All AC-based, Ensemble enables that. Page 11. Because of the power of semiconductor software and Ensemble, we are able to deliver all of these features. Very high quality. You see, our target is 500 DPPM, which is 500 defects per million units shipped. That 500 DPPM is an annual number.
Safety and no high voltage, because ours is an AC architecture. No high voltage DC. Furthermore, our batteries have the safest chemistry, lithium iron phosphate. Flexibility. Because of the modular design, we are able to be extremely flexible in terms of storage size, for example. If you only need 6 kWh or 7 kWh, you only need to buy two of our 3.3 kWh battery storage units. Exceptional value. We talked about grid independence. In the absence of a grid, as long as solar is still on, IQ8 will form a grid. It is the first grid-independent microinverter that can do that, and we'll be releasing that product later this year on the solar side. It's already available today inside the batteries, like what I said before. Because ours is a one hardware platform with extreme software configurability, supply chain efficiency is outstanding.
Because of our semiconductor architecture, we are able to scale things and have an extremely efficient integration that helps us in reducing components, thereby reducing power. Of course, with high quality, with safety, flexibility, great efficiency, low cost, and exceptional value, we pride ourselves. We pride on providing the best customer experience. Page 12. We talked about quality, we talked about customer service. Our customer service worldwide NPS is 63%. Our wait time target, near term target is 30 seconds, but really the long-term target is zero. Gross margin management. We reported in Q1 gross margins a little bit above 40%, and gross margin is accomplished by a few things. One is, of course, product innovation that helps us to charge for value. Working on cost. Cost is multiple sourcing, ensuring that we drop cost due to innovation, like gallium nitride is one of them.
ASIC integration is another way by which we can drop cost. Gross margin management is an engine that's been running really well for the last three years, and is focused both on the pricing side as well as on the cost side. Page 13. The resilient business model. We don't have big factories. We have great contract manufacturing partners, both for our microinverter business as well as our battery business. That's how we can scale up mostly and even down when we need it. Our headcount. 62% of our headcount is in India. We recently acquired a permitting services company based in Noida, which basically skews this number to be greater than 50%. We do have a sizable account in North America as well, both for customer service and the corporate team there. Of course, in New Zealand, we have our microinverter engineering team.
The biggest team is in India, and it does all functions for us. Page 14. We are in the sustainability business. The company was founded with the purpose of advancing a sustainable future for all. Every product that we ship goes into a clean energy system that is good for the environment. We are in that business by definition, and we released our first ESG report earlier this year. Page 15. We are no longer just a microinverter company. Our strategy is to build differentiated home energy management systems and deliver them to homeowners through a comprehensive digital platform and an Enphase installer network. Page 16. The four elements of a home energy management system. The generation that's basically build the best microinverters, grid independent, high-power AC modules, and entering into the small commercial business. Storage is reliable, scalable, simple, safe.
AC coupled architecture, safest chemistry, modularity, load control, no single point of failures, generator compatibility. Because our architecture is microinverter based, scaling up the power of batteries is quite easy. Consumption. Consumption monitoring for homeowners. Based upon monitoring their consumption, we can react quickly, both in terms of customer service as well as providing them recommendations on storage, for example. Provide intelligence via breaker and appliance level consumption. That's another thing that we can do, and we will do shortly. Load control. Our storage products are now built with full circuit load control. That enables you to shed loads that are excessive when you're off grid. That's a big deal. I'll come to services. Yeah, services are basically where we provide exceptional customer experience to installers and homeowners. For example, we just made two acquisitions recently. One, a company called Sofdesk and another, a company called DIN.
The first one, Sofdesk, provides solar design software to installers. DIN Engineering Services provides permitting for installers. The name of the game there is to ensure we provide all the services installers need in addition to the hardware that they need, all on one platform. Page 17, a quick run through all of these. Generation, for example, is the IQ8 microinverter I talked about. That's an example of what we do on the generation side in home energy management. This is, like what I said, world's first grid-forming microinverter system. We'll start selling this soon. Page 18 is the Enphase small commercial solution. Here you can see this is a very similar form factor as the IQ8. It's called IQ8D. It's a little bit bigger because it has to support 640 W AC power, and it can support two panels.
You can see the picture of the board on the left looks similar because while it is scaled up on the DC side, which is the input side to support two panels, the AC side, meaning the home side, is basically the same in terms of the architecture. We are able to get a lot of efficiency there, and it has 50% greater power density compared to the IQ8. Of course, maintaining the same quality and the same efficiency. This product is an exciting product, and we are being extra careful because we need to make sure that we provide the right experience in the small commercial business. We are still learning on that front, and we will release the product only when we are ready. We do expect to be ready this year. Page 19. I've talked about storage a lot.
This is a product we are very excited about. It's got all of the bells and whistles of a standard Enphase system. The highest quality, great customer support, modularity, safe, simple, whole home backup. Power start. Our proprietary feature that enables the soft start air conditioners better than competition. In addition, we are introducing now load control. We'll have four load circuits. When you switch to off-grid, for example, you can share your air conditioner if you want, and it's completely configurable from the app. The other load can be something like a pool pump. If you don't want the pool pump during off-grid, you can do that. This gives enormous flexibility for the homeowners and makes sure that the overall installation can be a whole home backup. Generator compatibility is also a big deal.
The generators can directly plug into our smart switch, now will show up on the app and can be controlled. This means that when you have a power loss, the battery can take over. If the battery is about to deplete, the generator can turn on and can fill up the battery and turn off. If you want the generator to be on always, that's also possible. Again, the name of the game here is everything shows up in the app. It's a one-stop shop, one number to call. That's an example of a complete energy management system. Page 20. Extending that concept, we are making a portable power station. This will be able to take solar inputs, off-grid inputs, and it's got a small battery inside, a 1.3 kWh product. I mean, a battery. Essentially, the objectives are two.
One is provide the energy resilience at home. The other is energy on the go for camping applications, et cetera. We are extremely excited about this product. This is also slated for release end of the year. Page 21, I talked about it, monitoring and load control, and we think this will be a major differentiator compared to competition. Page 22. Summarizing, our new products are expected to increase our served available market from approximately $4 billion in 2020 to $14 billion in 2023. Pretty nice growth there. We are talking about here the residential solar product, which is IQ8 I talked about, small commercial solar, which is IQ8D product, residential storage, our batteries, and the off-grid solar and storage, namely the portable power station. Quickly on the digital platform side, we are slowly but surely developing a comprehensive suite of services.
That's shown on page 23. This is basically starting with a system estimator to estimate our solar and storage based upon your appliances and your preferences for backup. Going to a tool which is called Solargraf, which is used by the installers extensively. That's the acquisition we did from Montreal. It's a Montreal-based team. DIN Engineering Services, permitting services for the installers, proprietary apps for the installer in terms of toolkits, Enlighten Manager, a portal for installers, the Enphase store where installers and even homeowners can buy things they need, and of course, the Enlighten mobile app. It's called MyEnlighten. Quick highlight once again on talking about the two companies. Both were completed in the first quarter of this year, and essentially, both of them are geared to providing one-stop-shop type services to the installers. If you look at Sofdesk, two software offerings.
One is on the solar design side, the other, the solar design software, and the other is roofing software. There, the name of the game for us is to basically get our long-tail installers to start using that software as part of the platform. DIN Engineering Services, they basically provide permit plan sets for 100 installers or so. Again, there, we have a huge network of long-tail installers. What we are basically doing is to take these services to our long-tail installers so that they can now have both software as well as permitting services on one platform from one supplier, which is Enphase. Last slide, page 25. We are transforming rapidly into a home energy management systems company.
We expect to introduce several new products this year, which is IQ8 on the roof, a small commercial product, and portable power station products, in addition to making numerous improvements on our storage products. We take customer experience very seriously. Our goal exiting 2021 is to get to an NPS of 70%. We have already introduced 24/7 customer support because now we realize we are an always-on power company. We need to support our customers a lot better. We'll be doing a lot more things to make sure customer experiences are remarkable. Of course, expand the digital platform by adding new capabilities. We bought two companies, and we are always looking at opportunities. We want to provide an exceptional platform for installers and homeowners, and we want to provide a one-stop shop services for installers there. With that, I'm ready to take questions.
Okay, the first question, any updates on IQ8 release and/or portable power station release? Like what I said, those products are getting closer to the finish line. We do expect to release both of them this year. Any updates on how the chip shortage will hopefully be resolved? We are working on the chip shortage problems day and night. Like what I said, we have a couple of components that are mainly short. We are working with several companies there. We have qualified three sources. We are in the process of qualifying some more. We are looking at all possible things we can do. We have extremely competent companies that we are working with. I am in touch with the CEOs of all of them. While it's difficult for us to predict the future, I'm hopeful that these shortages will be resolved relatively quickly.
The use of EV batteries to supply energy into the grid seems to be an important focus for many companies who are working diligently to find the right software and hardware to best enable this capability. Has Enphase and its engineers thought about deploying IQ technology directly into EVs, like how they do with Encharge, to simplify the connection and intelligently control power flow to the grid via Ensemble? Enphase could corner a market with this ability, add additional supply agreement to several EV manufacturers, and have a sound marketing focus of IQ technology in every EV manufacturer. Good question. Yes, we are looking at this. We agree that the electric vehicles are important market for us to play in. There is a couple of aspects. One is, the electric vehicles are a big source of resilience. They can actually help provide resilience to the grid.
That means the bi-directional capability of our microinverters can be put to perfect use there. This means not only you can charge your electric vehicle from the grid when the rates are low, but you can also utilize the electric vehicle during your power outages. Our microinverter, with its bi-directional capability, is a perfect vehicle for us to do this. There are multiple standards now that allow us to tap into the DC port of the electric vehicle directly. Imagine, at the heart of it, the product is pretty simple. It is a bunch of microinverters totaling maybe about 10 kW to 15 kWs, and control that basically says when to charge, when to discharge, et cetera. It's a communication and control board and a bunch of microinverters. Of course, I'm oversimplifying it, but that's what we are good at.
The interaction with the grid, the interaction with the vehicle, all of the regulatory standards, that's where our expertise lies. We are going to look at this area seriously, and of course, it needs us to make high-power microinverters. We are making 640 W AC. This needs about probably 1,200 W AC, 1,200 W microinverters, which can take a very high voltage DC input from the EV. We are carefully looking at it, and it's important for us, too.
Okay, that was the last question. Thank you again for your attendance today and for your continued support of Enphase Energy.
The Enphase Energy Annual Meeting of Stockholders has now concluded. Thank you for participating.