Predicting the future is always fraught with hazards but a recent survey caught our eye with a bold prediction: nearly one-third of solar installers/integrators world wide expect to utilize storage in more than 40% of their installs by 2015! Oh and they need microinverters to come down in cost by 50% before they are willing to adopt them!!! Numbers like that beg for some analysis, so stay with us.
Booming Market for Storage
The survey in question was conducted by IMS Research (h/t to SolarIndustryMag.com) and included global installers, integrators and wholesalers. Among respondents from the U.K., Germany and Italy, the addition of storage capability was cited as the most important requirement for inverters over the next two years.
We aren’t surprised by this result. As the penetration of PV systems onto local grids increases, grid operators and utilities start to complain about solar undermining grid reliability. (Well, ok, utilities are actually complaining about losing market share, but that is not the concern of the ISO.) Likewise for many commercial solar clients, PV alone may not be a complete solution if the client’s electric bills fall under a demand-charge rate structure and their peak demand falls outside of the peak output for their PV array. (Add Feed-in Tariff clients with time-of-delivery factors and you have yet another potential market for cheap storage.)
According to the survey, respondents were looking to add storage for 10-30% additional cost, but is that a realistic expectation? Not from any of the products we’ve seen so far. (The survey noted that 30% of respondents were willing to pay even more – which from what we can tell, they will certainly need to do!)
Ultimately, local storage for distributed generation will boom if the economics justify it – whether because net metering becomes less desirable (or even unavailable), or if demand shifting or time-of-delivery factors boost the ROI enough to overcome initial costs.
How Low Can You Go?
Meanwhile, we were baffled by the survey’s contention that the “high cost of microinverters” was seriously limiting their growth. Indeed, according to the report, a majority of survey respondents who are not presently using microinverters said that they would need to see the price drop by over 50% before they would consider using them! (Interestingly, the illustration that accompanied the article showed the much discussed, but yet-to-be-sold, SMA microinverter instead of the best-selling Enphase product.)
How does such reluctance make sense? Let’s look at a typical 5kW residential project using either Enphase microinverters or SMA string inverters. Assume that we are using twenty 250 Watt modules to power both inverter types. So we would need 20 microinverters and one string inverter. Enphase cost – around $3,500 for microinverters plus cable. String inverter cost – about $2,800. Labor? Well someone has to hang that SMA 5000 on a wall downstairs (preferably somewhere in the shade!) while someone else is mounting microinverters to the rails on the roof. Pretty much a push. (We actually have lower labor rates for microinverters than we do string inverters, but that’s just us.) Which makes the microinverter about 25% more expensive going in.
So for the installer it might look like they have a better deal with the string inverter, but what about the client? Our testing shows a 15% improvement in yield and that goes even higher depending on the amount of shading at the site. Beyond that, the microinverter comes with a 25-year warranty, the string inverter only 10. Which means for the client, they are going to have to spend an additional $2,800 or so ten years down the road when their string inverter dies (sooner if it is baking in the sun). All of which argues quite convincingly that the microinverter is the better deal for the installer’s client – which last time we checked was supposed to be the point of the exercise.
We are all for price reductions, but we suspect that folks who say microinverter prices must fall 50% before they will consider using them have already decided that they will never use them. Of course, installers are entitled to run their business as they see fit, but it certainly isn’t a lack of value to the client that is keeping these installers from taking the plunge with micros.