I got the impression from personal conversation with SMA guys that their heart isn't in micro inverters. They believe - correctly!! - that you can't expose sensitive electronics to heat day in day out and expect them to last.
The real threat, in my view, comes from solaredge.com. Their approach is a workable revolution because the place only the MPPT box with each panel, allowing for strings of any size. Read their white papers. They outline what is systematically wrong with the central inverter concept and how their approach completely avoids these shortcomings. My company has been a major SMA buyer for a long time but if solaredge can live up to the promise they'll take the lead. I'll say the main issue is reliability of the MPPT box, I'm not worried about the inverter itself because by design it's less complex. But their concept is clearly the solution.

The real news here is not that SMA is taking on Enphase (or Solar Edge, for that matter) but that they will bring a 1 GW US factory online next year. That should lower costs and increase availability here in the US; both quite welcome developments, to say nothing of all those green, US jobs.

Have to disagree with the above poster, however, on who really has the edge in new technology right now (pun intended). Enphase has a working product that is being widely adopted as it is a great fit for otherwise not viable locations. All inverters have their "sensitive electronics" exposed to heat but the micro-inverters are exposed to way less. But the DC-DC boxes - like Solar Edge and the many others showing at SPI - are also exposed to heat. How reliable will they be?

Bottom line is going to be cost. Enphase costs more than SMA but allows you to install at sites where a string inverter would simply not work. Will the DC-DC boxes + inverters cost more or less than Enphase? From what I heard on the floor, they will cost more. Will their higher yields and greater reliability -- assuming that either exists -- be sufficient to justify the cost? That was the big question coming out of SPI 2009.

Jim Jenal - Founder & CEO Run on Sun

Jim, you say micro inverters are exposed to way less heat?? They are placed on the roof in blazing heat! Just measure how hot it gets underneath a panel. A central inverter is mounted on the side of house, often in the shade, and has major cooling design elements in place.
In addition, micros generate heat operating; those 6 % efficiency losses are mainly expressed as heat. My guess is they'll kick the bucket a few years down the line.

Whether solaredge's power box is less susceptible to heat issues remains to be seen; I find it plausible because their DC-DC conversion is higher (=less heat) and their circuitry was built specifically for high temps. They are giving a 25 year warranty for the boxes (and 12 for the inverter).

There was a ton of power-point tech companies at SPI this year. It really surprised me. I also have my doubts about micro-inverter long-term reliability - will they all need replacing in 13 years from worn-out capacitors? Seems like DC-DC power-point approach would last longer - the materials in them experiencing far less electromigration or dielectric breakdown.