Thesolar PV inverter market is about $2.4 billion and growing as quicklyas the solar market grows. And as the price of PV modules plummeted in2009 – the price of inverters and balance of plant became a moresignificant portion of the entire system install.
While mostPV module and cell manufacturers stand amidst a bloodbath of slimmargins and murky market conditions, inverter manufacturers have been abit more fortunate. Judging by the revenue, margin and stockperformance of some of the inverter market leaders – it was much betterto be an inverter manufacturer than a module manufacturer in 2009. Here’s a review of the inverter field in 2009 and some trends to look for in 2010:
SMA Remains the 500-Pound Gorilla in the Small and Medium Inverter Market
SMASolar Technology is the leading pure-play PV inverter vendor with deeptechnological acumen, a wide-ranging product line and a strong globalsales-channel. SMA has a global market share of greater than 35percent, is ramping up production and will continue to win market sharedue to a strong patent position, aggressive R&D (5 percent of salesgoes to R&D) and industry-leading inverter efficiencies of up to 98percent.
According to recent corporate guidance,SMA’s 45+ percent market share gives them more market share than thecombined shares of the next four vendors (!). Those four vendors areIngeteam, Fronius, Kaco and Siemens. It also looks like most of thoseTier 2 players lost market share to SMA in 2009. And the "other"vendors, all 169 of them, are left to split up the remaining 35 percentof the market.
There is no player in the PV panel market with anything close to that dominance.
SMAinaugurated its new 18,000 square meter solar inverter factory thisyear, which takes its annual production capacity to 4 gigawatts. SMAclaims that the new factory has the lowest possible energy requirementsand includes its’ own 1.1-megawatt solar installation (to capitalize onthe Alaska-equivalent German sun). SMA announcedthat it will begin manufacturing North American products in Denver,Colorado in mid-2010 at a manufacturing facility with an expected one-gigawatt annual capacity.
Inthe third quarter of 2009, SMA increased its 2009 revenue guidance forthe second time and revealed a record 1.2-gigawatt sales quarter at animproved margin even as the inverter price dropped to $.365 per watt.
Any aspirant in the small and medium-sized centralized inverter market in 2010 is going to have to go through SMA.
Market Acceptance of Microinverters and Distributed Inverters will Continue
Thoughmet with some skepticism just a few years ago – microinverters anddistributed inverters electronics are winning orders in residential,commercial and even in utility-scale applications. We’ve covered thismarket trend extensively; for a list of aspirants in this market youcan visit this link or check out this report.
Microinvertersand Distributed Maximum Power Point Trackers convey a number ofadvantages to solar installations compared to central inverters. Byindividuating the panels – maximum power point tracking is optimizedfor each panel. Power harvest is improved while losses due to shading,soiling and panel mismatch are reduced and overall system voltages arelowered. There are potential performance and reliability advantages toboth schools of distributed PV electronics.
A number of solarsuppliers and utilities have made alliances or acquisitions ofdistributed electronics vendors in what is clearly a validation of thepotential for this new solar architecture:
- SMA acquired the micro-inverter technology of Dutch ?rm OKE
- Satcon has added DMPPT to its Solstice sub-combiners
- Enphase is working with Akeena Solar and SunTech Power
- Petra is working with PSE&G on a $200 million pole-mount AC module contract See Solar on the Pole.
- Tigo Energy is working with distributor AEE Solar
- Solar Edge is working with Schott, BP Solar and Gerlicher Solar
- NSC’s Solar Magic is working with SunTech Power and SunEdison
From a shipment standpoint, microinverter supplier Enphase is theclear leader with over 100,000 units shipped and in the DC-DC space,SolarEdge claims a backlog of tens of megawatts. Petra has a big orderwith New Jersey’s PSE&G utility but has yet to ship any truevolume. Tigo Energy has begun volume shipments through AEE (N.America), DC Power (N. America), and Enerpoint (Italy) earlier thisyear.
General Electric (and Other Big Players) Enter the $2.4B PV Inverter Market
When markets get big enough and interesting enough – GeneralElectric comes a knocking. Having been in solar since 2004, GE has nowentered the PV inverter space. They’ve spent the past 2 yearsdeveloping a 600-kilowatt solar inverter,introduced last month, to go after the growing utility-scale solarmarket – using their expertise in renewable energy power electronics tobring a "smarter," inverter into the industry.
General Electricdeveloped the first power conversion unit for its steam turbine in 1900and has been active in power electronics for wind turbines for decades.Its 1.5-megawatt wind turbine is an industry workhorse and they have deployed 12,000 wind turbinesin the market, totaling over 185 million operating hours to date. Eachof its wind turbines has a two-stage converter module performing thepower conversion function – in the case of wind: AC to DC to AC.
Expertisein wind power electronics translates very well into solar powerelectronics and now that utility-scale solar is front and center – GE’spower plant expertise is a differentiator. GE has watched wind gothrough its growth stages and expects solar to go through similargrowing pains.
"We have to be sure we can actually deploy thatpower into the grid," said Minesh Shah, GE’s Renewable Systems PlatformLeader. "Solar needs the capability to ride through disturbances onthe grid. That’s where GE brings its power plant experience. That’s howwe’re different from Satcon or Xantrex," Shah added. (This concept iscalled “low voltage ride-through," a feature required as part ofGermany’s 2008 Medium Voltage Directive. SMA has also incorporatedthis capability into some of their systems.)
The utility-scale solar inverter market is officially in the big leagues with GE joining the ranks of Siemens and ABB.
Smart Grids need Smart Inverters
Thedistribution and transmission grid will be increasingly stressed as PVinstallations become more prevalent and as power production becomestwo-way instead of just downhill from utility to user (see Will Solar Crash the Smart Grid?).Inverters can serve a crucial role in adding intelligence to therooftop whether it be in adapting to disturbances on the grid or toadjusting for power factor.
Add plug-in hybrids anddistributed energy storage to the mix and it becomes more and more important to have smarts in the system. And where better to locate thissmarts than in the electronics already at the site – in the PVinverter. The DOE’s Solar Energy Grid Integration Systems (SEGIS)Program is the first salvo in this quest to add intelligence to the PVarray and integrate it with an increasingly smarter grid.
As an example of intelligence in the inverter — GE believes thattheir inverter line, "is making solar’s interaction with the grid‘smarter’ because of its ability to regulate voltage.” GE has studiedlarge-scale renewable energy projects (>100MW) across the US thatand believes that the grid can take the increased penetration… ifcertain guidelines and technologies are in place.
Amongst the many inverter (and storage) firms working on adding intelligence to the grid are Apollo Solar, Enphase Energy, Petra Solar, Premium Power, Princeton Power, PV Powered, Satcon and SolarBridge.
Photo via Apollo Solar.