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Solar Inverter Innovation

From mere converters of solar power from Direct Current to Alternating Current, inverters are becoming brainier. It comes as a result of keener competition, particularly from Asian suppliers. None of the top ten photovoltaic inverter suppliers in the world were from Asia in 2011, now almost half came from Eastern Asia thanks to the growing number of solar installations there. While cost is the prime driver in the Chinese market, regulation has been the key driver of demand in Japan, thus playing these markets into the hands of domestic manufacturers. So while the number of inverters bought is rising, cost competition is resulting in a contraction of $60M in solar inverter market revenue worldwide, a 1% reduction compared to 2012.

American inverter suppliers are being boxed out by imports, especially those from Europe. It didn’t help that prices declined by almost a fifth in 2013. So in order to stay afloat, manufacturers are turning to technology to give them a competitive edge.

One of the biggest developments is the emergence of module level electronics such as micro inverters and power optimizers. It is expected that installations of these devices will increase from 1185MW in 2013 to 13GW by 2020.

A big part of this growth is driven by solar PV manufacturers who are integrating these into their panels, producing “smart” PV modules. The advantage of these module level electronics is that they improve grid reliability and increase solar power production and are thus essential for tying in large amounts of solar power into the grid. Innotech Solar produces power optimization modules to increase output of solar cells connected in series that improve their yield by around 20%, reducing the effects of shading and soiling.

Others have a different take and are integrating DC power optimizers with a string inverter to improve its “grid friendliness”. SolarEdge recently launched such a system that adjusts PV power production dynamically so that it does not export too much power into the grid. The company expects to install 1GW worth of solar installations this year.

Inverters are becoming even more sophisticated, to the point that they are communicating with the grid and energy storage equipment.

So while there is a contraction in traditional markets like Europe, there are enormous opportunities presented by a growing global market. There may be clouds on the horizon for most of the old leaders, but there is definitely a silver lining for solar power consumers as a result of the technological innovations that competition is spurring.

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