Among the exciting developments in today’s PV industry is the growth of microinverters and power harvesting systems, and their potential to act as disruptivetechnologies. However, there are a number of questions that remainregarding these technologies, including: What are their concretebenefits? Are they worth the extra cost? And eventually, which marketshare will microinverters and power optimizers gain?
These are some of the questions that we willaddress in this report by Solar Server, which was made possible with the assistance of Lux Research Inc. (Boston, Massachusetts, U.S.), and IMSResearch (Wellingborough, U.K.). In particular Solar Server would liketo thank Research Associate Matt Feinstein of Lux Research and IMSResearch Photovoltaic Group Director Ash Sharma for providing data andanalysis.
Note: in this report the terms "power optimizers" and "power harvesting devices" are used interchangeably.
What they do: inverters, microinverters and power optimizers
Microinverters are a new way to address thefundamental problem of converting the direct current (DC) produced bysolar photovoltaic (PV) modules to the alternating current (AC) which is used in electricity distribution grids, and which most appliancesrequire to operate.
Currently, this problem is usually addressed byone of two dominant technologies: central inverters and stringinverters, which together make up roughly 99% of the market for powerconversion for solar photovoltaic (PV) systems.
Central inverters are used in systems where theentire DC output of a PV array is brought to one point, and thenconverted to AC by one or more inverters. They offer significanteconomies of scale both in production and installation. Due to their low per watt costs and the simplicity of design, central inverters are thepower conversion device of choice for large PV power plants.
String inverters are used in systems where PV arrays are divided into individual groupings ("strings"), with powerconversion occurring at each string. These offer similar economies ofscale, and are more flexible than central inverters.
Microinverters by contrast convert the DCelectricity generated by PV modules to AC at each individual module. The technology has been pioneered by market leader Enphase Energy Inc.(Petaluma, California, U.S.), and in recent years a number ofmicroinverter start-ups have emerged, some with novel approaches toincorporating the technology.
MPPT and monitoring
In addition to converting DC power to AC power, most inverters perform another function, which is to pull the optimumcombination of current and voltage from the modules in a PV system inorder to maximize output by watt.
The current and voltage produced by PV modules, andthus the point that delivers the optimal combination of the two, changes over time. Electrical engineers have developed a method of trackingthat point, called maximum power point tracking (MPPT). MPPT has becomestandard for inverters.
However, a challenge for central and stringinverters is that this point can be different for different modules in a PV system, which traditional inverters lack the flexibility to address. Microinverters, by contrast, offer MPPT at the module level.
Another function that is often built into invertersis the ability to monitor module output, which is important fordetecting system faults. A primary advantage of microinverters is thatthey can report this information at the module level, which can lead tomore timely diagnosis of problems.
Power harvesting systems; parallel installation
Power optimizers offer many of the advantages ofmicroinverters, including MPPT and monitoring at the module level,without DC-AC conversion.
Additionally, some power harvesting systems offer for parallel DC architecture, which allows PV modules to be wired inparallel instead of series. Similar to microinverters, this helps toreduce problems due to shading, module mismatch, and other issues.
Most power optimizers function by means ofelectronic devices attached to the modules or circuits built intojunction boxes. These devices are used in addition to string or centralinverters, and some power optimizer companies, including SolarEdgeTechnologies Ltd. (Hod Hasharon, Israel) sell their own line ofinverters.
Advantages of microinverters and power optimizers
Microinverters and power optimizers claim a numberof advantages: less power loss due to shading, module mismatch and other problems, greater flexibility in system design, enhanced safety forinstallers due to the absence of high voltage DC wires, and the abilityto extract more electricity from the individual PV module.
As with any new technology, it is important to establish both the accuracy and the relevance of claims being made.
Shading, dirt and dust
Aside from those systems located in open fields,deserts, or on the tallest building around, many PV systems facechallenges due to shading. With both centralized and string inverterarchitecture, the shading on one module will affect the entire string,meaning that if one module has a 20% reduction in power due to shading,the output of the entire string will be reduced by 20%.
A report by consultants to the California EnergyCommission states that in a sample of 119 PV systems, 85% experiencedsome shading, with 30% having more than a 5% reduction in output due toshading, for an average of 7% reduction in output over the sample.
This makes shading among the most serious threats to power output in residential and small commercial installations, and the ability of microinverters and power optimizers to reduce the harmfuleffects of shading by isolating shaded modules is among the strongestand best-verified selling points of these technologies.
Dirt and dust are similar problems in that theyprevent light from interacting with the module. According to the samestudy, typical losses from dust are around 7%, with very dirty moduleslosing as much as 25% of output. However, microinverters and powerharvesting devices are not as well suited to mitigate this problem, asdirt and dust buildup tend to affect an entire array – not a singlemodule.
Flexible system architecture and greater power harvest
A related advantage of microinverters is that theycan accommodate greater flexibility in system design, including placingsome modules in partial shade without affecting the output of the entire system.
By modifying output at the module level, both poweroptimizers and microinverters can also overcome the problems ofpotential string and module mismatch.
By performing MPPT at the module level, makers ofboth microinverters and power optimizers claim that their products candraw power more effectively from PV modules. Manufacturers cite powergains up to 25%, in part due to the aforementioned potential mitigationof the effects of shading and module mismatch. However, industryanalysts have challenged the numbers cited by some of these companies.
Longer lifetimes, reliability
Inverters are the part of PV systems most prone toearly failure. Microinverter companies and some power harvestingcompanies have focused on developing longer product lifetimes, offering15-25 year warranties.
A major issue in microinverter design has been thechoice of whether to use electrolytic or thin-film capacitors.Microinverter industry leader Enphase uses electrolytic capacitors,however most other microinverter start-ups including SolarBridge andSparq Systems Inc. have eliminated electrolytic capacitors in theirdesigns, which they say allows for longer product lifetimes.
Both SolarBridge and Sparq offer 25-year warranties with their products, and Enphase offers a 15-year warranty.
Barriers to adoption of power harvesting devices and microinverters
The choice to replicate power conversion at thelevel of each individual module does note com cheaply. Lux Researchestimates that the cost of microinverters averages between USD 0.50/watt and USD 1.00/watt, compared to central inverters, which are typicallybelow USD 0.30/watt, or string inverters, which range between USD0.25/watt and USD 0.50/watt.
The cost of power optimizers ranges widely, anywhere from USD 1/watt to USD .10/watt.
Industry analysts note that the higher cost of suchdevices makes marketing difficult in an industry with a relentless drive to bring down costs to compete with conventional energy sources.
These higher costs are also a barrier to the growthof these technologies in the residential market, particularly as theyoften require a larger initial investment in the same sized PV system.Residential PV system owners often struggle to pay these up-front costs, and many choose to go with a less expensive option even if it does notoffer the benefits that a microinverter or power harvesting system does.
Leading microinverter designs also offer lowerefficiency ratings than string or central inverters, typically offering91-95.5% efficiency, compared to central inverters at 97-99%, or stringinverters at 95.5% – 97.5%.
Power optimizers, while offering greater powerharvest, add an additional efficiency loss to systems. However, itshould be noted that the makers of microinverters and power optimizersstate that the additional power harvested using their devices faroutweighs single-digit efficiency losses at the conversion level.
Lack of familiarity
Finally, the adoption of these products requiresmarket education of their benefits, and in many cases system owners,developers and installers choose to stay with less expensive optionsthat they are familiar with. Some microinverter and power optimzercompanies have chosen to partner with established module and invertermakers, which can assist with this issue of familiarity.
Costs and benefits weighed; Power harvesting examined
Both Lux Research and IMS Research state that thestrongest selling point of microinverters is their ability to limitlosses due to shading, which is more often an issue with residential and small commercial installations.
As for the claims of greater power harvest, Industry Analyst Matt Feinstein of Lux Research states that for most PV plants,additional power harvests are much lower than the makers ofmicroinverters and power optimizers claim.
"What they boast is that, due to the differentdistribution architecture they are going to get 15%-25% additionalenergy harvest," states Feinstein. "But the truth is, that’s a claim,that’s all that is, often times it’s not guaranteed, it’s not verified,and frankly many installers don’t believe it."
"And in certain situations that really call for ityou might see that really good boost of harvest, something like 15%, but a lot of times installers are saying, we are seeing less than 5%. Which doesn’t necessarily justify the cost, even for power optimizers, whichwill be in the ten cent or teen cent range per watt."
Warranties and reliability
Long warranties are a primary way that microinverter makers have emphasized the durability of their products. Aconsideration noted by Lux Research is that as microinverters and poweroptimizers are relatively new technologies, data is not available as towhether or not these devices will actually last as long as theirwarranties.
Warranties are an assessment of financial risk, notmechanical risk, and Lux Research also notes that warranties in anyindustry carry a number of caveats that can be used to limit claimpayment.
Microinverter makers have also noted that there are significant differences in warranties between products.
Market segments – system size and geography
Such cost/benefit considerations are different fordifferent systems and particularly different system sizes. "There is abreak even point, at what system size do microinverters provide benefits or don’t provide benefits, and installers are pretty confident thatthey know where that is," states Feinstein of Lux Research.
The greater advantages of microinverters for smaller installations is reflected both in marketing and existing market share, which emphasizes residential and small commercial market segments. In2010 microinverter maker Enphase captured 13% of installations smallerthan 10 kW installed through the California Solar initiative, and 9.3%of commercial systems sized 10-100 kW.
Likewise, SolarBridge CEO Ron Van Dell states thathis company’s target market is PV installations up to 100 kW or 200 kWin size.
The market share for power harvesting devices tendsto include a larger range of system sizes, however IMS Research notesthat power optimizers are most successful in residential and largecommercial rooftop installations. IMS Research does not predict highpenetration into systems larger than 1 MW.
Until recently, microinverters were mostly confinedto the United States. Almost three years after rolling out itsmicroinverter product line, Enphase opened its first European offices on March 3rd, 2011. SolarBridge also states that it expects to first build a presence in the U.S. market before expanding to Europe.
Market analysts cite the same barriers to acceptance of these technologies in Europe as in the United States – includinginertia from installers and developers as well as the higher price tag.However bad past experiences that Europeans have had with AC modulearchitecture may also play a factor in the delay.
Power optimization companies have a broadergeographical range, and both SolarEdge and Tigo Energy Inc. (Los Gatos,California, U.S.) have offices in North America, Europe, Asia and theMiddle East. IMS Research estimates that 45% of the current poweroptimizer market is in Europe, and 45% in North America.
Leading power optimization companies and products
The following list of companies is notcomprehensive, but is meant to give an overview of some of the industryleaders in these technologies. It is important to note that detailedfinancial information is not available for many of these companies, aseven the industry leaders have not yet held initial public offerings.
SolarEdge is a relatively established player in thepower optimization world, having introduced its first products in May2009. The company’s main products include its PowerBox optimizer, bothsingle and three-phase inverters, and its SolarEdge PV monitoringportal.
SolarEdge has more than 100 employees, with officesin the United States, Japan, Germany and Israel. FlextronicsInternational Ltd. (Singapore) manufactures SolarEdge products,employing an additional 180 workers.
SolarEdge’s funders include GE Energy FinancialServices, ORR Partners and Genesis Partners. In October 2010 the company announced a USD 25 million financing round.
Tigo Energy is another relatively established poweroptimization company, and was founded in 2007. The company’s Tigo Energy Maximizer performs module level power management, using patentedimpedance matching technology, and Tigo Energy markets its products for a wide range of system types, from residential to utility-scale.
In June 2010 Tigo Energy announced in that it hadraised a total of USD 27 million in funding, and in October 2010 TigoEnergy stated that it had partnered with Suntech Power Holdings CompanyLtd. (Wuxi, China), the world’s largest PV manufacturer, to integrateTigo Energy’s solution to create "smart" module technology, as well aspartnering with inverter maker Kaco New Energy Inc. (San Francisco,California, U.S.).
National Semiconductor’s "Solar Magic"
Semiconductor giant National SemiconductorCorporation (Santa Clara, California, U.S.) offers several differenttypes of power harvesting and monitoring devices through its"SolarMagic" line. These include MPPT controllers, gate drivers, voltage regulators, and sensors, available as chip sets for integration intoexisting devices.
eIQ Energy Inc. (San Jose, California, U.S.) offersparallel PV system design with the use of its vBoost product. Thisenables the avoidance of "series" losses from shading, module mismatchand other factors similar to microinverters, without power conversionfrom DC to AC at the module level.
On December 1, 2011 eIQ announced that its products have logged one million operational hours of field use.
Leading microinverter companies
Enphase Energy pioneered the microinverter, rollingout its first microinverter line in June 10, 2008. As competitors havebeen slow to follow, data about the microinverter market currently means data on Enphase’s market presence.
Enphase’s M190 and M210 microinverters have been the core of its business, and in October 2009 the company unveiled a M380"twin-pack" microinverter. All offer standard 15-year warranties. Unlike some new entrants, Enphase uses electrolytic capacitors, and itsmicroinverters offer efficiencies of 95.5%.
On February 1st, 2011 Enphase Energy signed a supply agreement with Siemens Energy (Erlangen, Germany), under which Siemenswill sell Enphase microinverters through its network of U.S. electricalequipment distributors. This acknowledgement by a company of the scaleof Siemens is one of the largest indicators of the success of thetechnology to date.
SolarBridge Technologies (Austin, Texas, U.S.)officially launched its SolarBridge AC module system in October 2010.The company is notable for its approach to microinverter integration,working through partnerships with established module manufacturers whoattach microinverters to PV modules at the factory and sell them as aunit.
SolarBridge notes that this approach avoids a number of potential barriers to market acceptance, including lack of installer familiarity with the product, as the microinverter solution will comefrom a known source. The company also states that incorporatingmicroinverters with modules at the factory lowers overall costs.
SolarBridge places a strong emphasis on productreliability, and offers a 25-year warranty with its microinverters,which it says are designed to last as long as the modules to which theyare attached.
The future of microinverters and power harvesting devices
While both microinverters and power optimizers offer distinct advantages in certain situations, they are likely to remain aniche technology in the near future. Several industry analysts havestated that these companies’ goals of offering disruptive technologiesis still years away.
IMS Research estimates that the total global marketshare for microinverters and power optimizers was 250 MW in 2010, whichrepresents 1.4% of total PV installations by capacity during the year.Total revenue for the industry is estimated at USD 100 million.
Microinverter market share
Microinverters still make up a very small part oftotal PV installations. On January 19th, 2011, Enphase shipped its500,000th microinverter. With a total global installed capacity ofroughly 40GW at the beginning of 2011, this means Enphase installationsrepresent less than half of one percent of all PV installations bycapacity.
However, in certain markets microinverters aregaining speed rapidly. In 2009, Enphase microinverters served only 5.3%of all residential systems up to 10 kW under the California SolarInitiative. The company more than doubled this market share to 13% in2010.
With Enphase’s exponential growth, microinvertershave the potential to present a challenge to residential string inverter markets in coming years, however analysts agree that central inverterswill remain standard for large installations.
Power harvesting devices: the new normal?
Power harvesting devices may follow a different path to acceptance, as in many cases, power optimizers are being packed with or even integrated into inverters or even modules, blurring the linesbetween what is an additional device and what will be the new standardpractice.
"I think you are going to see a few more of thosearise that a la SolarEdge and a la Kaco Energy and Tigo," states MattFeinstein of Lux Research. "Because that is a good way to reduce costsand also to shorten the supply chain, and not make installers have to go out and buy two different things."
Industries projected to reach USD 1.5 billion in 2014
Industry analyst IMS Research has quantified itsexpectations for microinverters and power optimizers, stating that itexpects the market for these devices to reach 3-4 GW in 2014, and thattotal industry size will be around USD 1 billion. However, given theexpected growth of the global PV market these technologies will stillonly be used in a small percentage of PV installations.
IMS Research states that while each technology willgrow and achieve increased market share, that neither will completelytake the market away from central inverters. The company also statesthat power optimizers offer market competition to microinverters.
Within these two industries a number of companiesare fighting for that market share. Lux Research predicts consolidationin microinverter and power optimizer companies in coming years,particularly as larger companies develop their own microinverter andpower optimizer solutions.
Regardless of which directions the industry takes,these technologies have already put additional pressures on invertermanufacturers to provide more sophisticated solutions, which in somecases means incorporating microinverters or power optimization. Theyalso offer an opportunity for module producers to differentiate theirproducts by offering additional value.
In this way, even without currently being trulydisruptive technologies, microinverters and power optimizers have pushed the PV industry in its mission to create better, more efficient andreliable solutions for solar power generation.
An Interview with Sam Wilkinson of IMS Research on Changing PV Market Dynamics
Solar Interview with Energy Policy Expert Paul Gipe
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