Reported by Jeanny H. Lim (swied@infothe.com)

LSIS, a spin-off of electronics giant LG Group, is a leader in industrial electricity and automation. Headquartered in Anyang, Korea, LSIS provides total solutions for power systems and automation, smart grids, electric vehicle solution and Photovoltaic (PV) systems.

LSIS has long been providing technologies for power grid connection and conversion with its businesses involved in power transmission and distribution and automation, which naturally led the company to expand its business into photovoltaic energy.

Envisioning a Smart Energy Future

LSIS is one of the first companies in Korea who aims to become a ‘total solution provider’ for smart grid. The company used the term ‘Electric Power IT’ 15 years ago and has strived to bring intelligence to the existing electricity grid to optimize energy with advanced features such as two-way communication. “‘Smart Grid’ is what LSIS’ technology and solutions are ultimately intended for, and photovoltaics is one way of generating electricity that fits well into the smart grid concept,” says Shin.

Up to 30% electricity is lost in transmission through the power grid. The solution to this, he sees, is distributed power generation─creating locally based renewable energy systems. “Among the many renewable energy sources such as solar, wind, geothermal and biomass, solar is the most accessible and most practical to use for almost everyone. Wind energy, for example, requires you to be on a specific place that has incredible wind power to be able to generate the energy you need. And the wind turbines are intrusive and even the quietest of turbines generate some noise,” explains Shin.

For LSIS, photovoltaic energy is a business area where the company can easily leverage its existing technical expertise and experience in power transmission and distribution, and provides a brilliant method for distributed generation of energy─an important part of realizing a smart grid.

Game Changer

LSIS does not compete with typical solar module manufacturers. It has been a system player from the very beginning. “We are not involved in the volume game that manufactures of ingots, wafers and modules are playing. We are differentiated,” stresses Shin. In the PV marketplace, LSIS is pioneering new markets with differentiated technologies: Specialty Module, Smart Module and Packaged System Solution.

LSIS not only provides solar modules for general use, but also provides specialty modules such as High Damp-Proof PV modules and small and lightweight modules for tiled Japanese roofs. These modules are tailored to meet the specific needs of a customer.

In addition, LSIS provides smart modules where modules and inverters are integrated. These smart modules not only generate electricity but even communicate. These all-in-one modules are intelligent and smart and differentiated from other modules on the market.

Importantly, LSIS’ strength lies in its ability to provide packaged system solutions for solar. The solar system from LSIS comprises of solar modules, inverters, junction boxes and monitoring. When these components are sourced from different makers, the interfaces between them may not be optimized and inefficiencies may occur. When the system does not function well, it would be difficult to find out who to talk to. A solar system is supposed to work for more than 20 years, so system reliability is extremely important. “With LSIS’ packaged solar system solutions, customers can get the products from a single source and the services from one hand,” notes Shin.

LSIS’ technology roadmap is to expand from the current packaged solar system business to energy storage system business and further to energy management system business─from solar to the whole energy system. “We view solar from the perspective of entire energy management and build our solar system solutions future-proof,” Shin says.

An Opportunity, Not a Crisis

The weak solar market conditions continue into 2012 affecting solar companies around the world. And the rapidly falling prices of solar modules due to a supply glut are severely affecting solar module manufacturers.

“The current price declines in solar modules do not present a challenge to us, rather an opportunity to solar system suppliers like us,” says Shin. However, since LSIS has a module business, Shin adds, “We will reduce the scale of the module business when the price erosion is severe in the market in order to minimize the risk.”

For a solar system supplier, the downward shift in solar module pricing is welcoming news because it can contribute to lowering the overall system cost.

In Shin’s point of view, upstream solar companies such as manufacturers of ingots, wafers and solar modules will continue to suffer from oversupply and price decline over the next two years. And the support programs of the governments around the world are expected to keep scaling back.

“There will be no sunny days like the years 2007-2010 in the solar industry. The high-profit, high-growth phase has gone and will never come back,” says Shin. However, for system business, the current situation serves as an opportunity to diversify product offering, according to Shin.

Into Japan and Eastern Europe

Again, LSIS is not looking at the general solar module market where the rule of the game is in price. The company is focusing on the market that values system quality and supplier reliability. Japan is such market.

“We’ve already started solar system business in Japan,” says Shin. “Despite the high loyalty for domestic brands by the Japanese customers, we think our solutions are quite competitive in Japan because we offer high-quality solutions at a reasonable price with our long-standing reputation for reliability and trustworthiness.”

Expanding overseas, LSIS sees Eastern Europe and Southeast Asia as potential markets for the company. Eastern Europe and Southeast Asia markets demand turnkey solar solutions due to their poor distribution network and these are the markets that LSIS can address well with its turnkey EPC solutions, according to Shin.

Gearing Up to Dominate Solar System Business

Shin believes there is no dominant player in solar system business. “Today, the majority of the solar system providers are electricity installers. They install solar systems with products sourced from individual manufacturers. But the individual and unpaired separates may not be synchronized and cause performance failure and reliability issues.”

Unlike the many system suppliers currently on the market, LSIS brings together its device manufacturing knowledge and system solution expertise, which makes the company a unique system supplier. LSIS has set its short-term goal to become the top system supplier in Asia, the target the company sees as easily achievable.

Jeanny H. Lim is Editor-in-Chief of InterPV. Send your comments to swied@infothe.com.