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The
solar PV inverter market is about $2.4 billion and growing as quickly
as the solar market grows. And as the price of PV modules plummeted in
2009 – the price of inverters and balance of plant became a more
significant portion of the entire system install.
While most
PV module and cell manufacturers stand amidst a bloodbath of slim
margins and murky market conditions, inverter manufacturers have been a
bit more fortunate. Judging by the revenue, margin and stock
performance of some of the inverter market leaders – it was much better
to 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
SMA
Solar Technology is the leading pure-play PV inverter vendor with deep
technological acumen, a wide-ranging product line and a strong global
sales-channel. SMA has a global market share of greater than 35
percent, is ramping up production and will continue to win market share
due to a strong patent position, aggressive R&D (5 percent of sales
goes to R&D) and industry-leading inverter efficiencies of up to 98
percent.
According to recent corporate guidance,
SMA's 45+ percent market share gives them more market share than the
combined shares of the next four vendors (!). Those four vendors are
Ingeteam, Fronius, Kaco and Siemens. It also looks like most of those
Tier 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 percent
of the market.
There is no player in the PV panel market with anything close to that dominance.
SMA
inaugurated its new 18,000 square meter solar inverter factory this
year, which takes its annual production capacity to 4 gigawatts. SMA
claims that the new factory has the lowest possible energy requirements
and includes its' own 1.1-megawatt solar installation (to capitalize on
the Alaska-equivalent German sun). SMA announced
that it will begin manufacturing North American products in Denver,
Colorado in mid-2010 at a manufacturing facility with an expected one-gigawatt annual capacity.
In
the third quarter of 2009, SMA increased its 2009 revenue guidance for
the second time and revealed a record 1.2-gigawatt sales quarter at an
improved 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
Though
met with some skepticism just a few years ago – microinverters and
distributed inverters electronics are winning orders in residential,
commercial and even in utility-scale applications. We've covered this
market trend extensively; for a list of aspirants in this market you
can visit this link or check out this report.
Microinverters
and Distributed Maximum Power Point Trackers convey a number of
advantages to solar installations compared to central inverters. By
individuating the panels – maximum power point tracking is optimized
for each panel. Power harvest is improved while losses due to shading,
soiling and panel mismatch are reduced and overall system voltages are
lowered. There are potential performance and reliability advantages to
both schools of distributed PV electronics.
A number of solar
suppliers and utilities have made alliances or acquisitions of
distributed electronics vendors in what is clearly a validation of the
potential 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 the clear 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 order with New Jersey's PSE&G utility but has yet to ship any true volume. Tigo Energy has begun volume shipments through AEE (N. America), DC Power (N. America), and Enerpoint (Italy) earlier this year.
General Electric (and Other Big Players) Enter the $2.4B PV Inverter Market
When markets get big enough and interesting enough – General
Electric comes a knocking. Having been in solar since 2004, GE has now
entered the PV inverter space. They've spent the past 2 years
developing a 600-kilowatt solar inverter,
introduced last month, to go after the growing utility-scale solar
market - using their expertise in renewable energy power electronics to
bring a "smarter," inverter into the industry.
General Electric
developed the first power conversion unit for its steam turbine in 1900
and 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 turbines
in the market, totaling over 185 million operating hours to date. Each
of its wind turbines has a two-stage converter module performing the
power conversion function – in the case of wind: AC to DC to AC.
Expertise
in wind power electronics translates very well into solar power
electronics and now that utility-scale solar is front and center – GE's
power plant expertise is a differentiator. GE has watched wind go
through its growth stages and expects solar to go through similar
growing pains.
"We have to be sure we can actually deploy that
power into the grid," said Minesh Shah, GE's Renewable Systems Platform
Leader. "Solar needs the capability to ride through disturbances on
the grid. That's where GE brings its power plant experience. That's how
we're different from Satcon or Xantrex," Shah added. (This concept is
called “low voltage ride-through," a feature required as part of
Germany’s 2008 Medium Voltage Directive. SMA has also incorporated
this 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
The
distribution and transmission grid will be increasingly stressed as PV
installations become more prevalent and as power production becomes
two-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 the
rooftop whether it be in adapting to disturbances on the grid or to
adjusting for power factor.
Add plug-in hybrids and
distributed energy storage to the mix and it becomes more and more
important to have smarts in the system. And where better to locate this
smarts than in the electronics already at the site – in the PV
inverter. The DOE's Solar Energy Grid Integration Systems (SEGIS)
Program is the first salvo in this quest to add intelligence to the PV
array and integrate it with an increasingly smarter grid.
As an example of intelligence in the inverter -- GE believes that their inverter line, "is making solar's interaction with the grid ‘smarter’ because of its ability to regulate voltage.” GE has studied large-scale renewable energy projects (>100MW) across the US that and believes that the grid can take the increased penetration... if certain 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.
