By Hannah Mann
Following stable market growth in recent years, market research institutes like GTM (GreenTech Media) now anticipate an unprecedented boom in the U.S. solar industry in 2011. GTM foresees 2011 to be “an exciting, if volatile, year in the U.S. PV market” (GTM, Q1 2011). One explanation they propose is that the solar slowdown in major European countries caused PV manufacturers and developers to seek opportunities in the U.S. The analysts saw that PV installations had grown by 252 MW in Q1 2011, 66% over Q1 2010. Given the pipeline of projects and recent module price declines, they also suggest that a doubling of the total U.S. PV market in 2011 remains likely. In addition, 2011 is the year in which we will see a major leap in the use of ‘Module Level Power Management (MLPM)’ solutions. MLPM started to take off as a trend in 2009 and is now making the transition to a widely adopted solution for PV installations. A recent report issued by iSuppli states that micro-inverters and power optimizers, collectively known as Module Level Power Management (MLPM) solutions are now rapidly penetrating the [US] PV market and that the market for MLPM solutions is expected to exceed US$1 billion and 6 GW by 2014 (iSuppli, Q1 2011). Where do module-level power management solutions fit into the U.S. market projections for 2011? What are the similarities and differences between them?
Micro-Inverters and Power Optimizers
The rapid market acceptance of MLPM can be contributed to the industry’s sincere demand for their advantages. Conceptually, both micro-inverters and power optimizers solve the same problems and offer the same benefits. Both devices decouple the interdependence to which modules in a serial connection are usually subjected and both devices bring intelligence to PV systems by operating at the module-level. Both devices improve energy harvest, offer module shut- off mechanisms (including voltage); monitor module performance and facilitate maintenance. Lastly, both devices bring a long overdue flexibility to installation design.
Yet differences between the two solutions exist. Though conceptually equal, their difference lies in the implementation of the concept. Micro-inverter manufacturers add a small inverter to each module. The inverter includes an MPP tracker and all capacitance necessary for the DC/AC inversion. In contrast, power optimizer manufacturers assert that while there is need for technology at the module-level, there is no need to add an inverter to every module. Therefore, they decided to move the MPP tracker to the module-level and to keep the DC/AC inversion in a central unit, the inverter.
The Rise of the Non-Residential Sector
In the U.S., micro-inverters and power optimizers are currently still perceived as mostly suitable for residential installations. The residential sector, though growing steadily, has not experienced an exceptional increase over the past years. In comparison, the non-residential sector (commercial and public sector) grew by 119% over Q1 2010 and accounted for the majority of installations which contributed to the total growth rate. The non-residential sector also experienced a significant 6% price drop from Q4 2010 to Q1 2011 which directly relates to the increase in installed capacity. The expectation throughout the majority of 2010 was that the Section 1603 Treasury grant would expire on December 31, 2010. This led to an application boom for non-residential installations. Given that the expiration of the cash program was delayed to the end of 2011, it is estimated that another application boom for non-residential installations will happen in 2011.
Given the rise of the non-residential sector in the U.S., it will be interesting to see how MPLM will perform with regard to commercial size installations. It is safe to say that micro-inverters do not offer a scalable solution. The multiplication of one inverter per module is simply too expensive and unsuitable for commercial size installations. Additionally, larger systems require compliance with various grid-interactive functions such as ride-fault through and reactive power generation which are very hard to implement with micro-inverters. Therefore, micro-inverters are most likely to remain in the realm of small residential installations. In contrast, power optimizers present a viable solution for commercial size systems. It’s a fact that power optimizers are being used plentifully in commercial installations outside of the U.S. The combination of module-level benefits and one central DC/AC stage makes power optimizers scalable.
MLPM Solutions on a Steeper Cost-Down Curve
The iSuppli report also states that while micro-inverters and optimizer+inverter solutions currently have an acquisition cost premium of about 50% per watt than traditional string inverter, MLPM solutions are on a steeper cost-down curve than traditional inverters so this difference will be narrowed over the next few years (iSuppli, Q1 2011). This is due to the fact that there is widespread usage of semiconductors in MLPM solutions allowing them to enjoy the benefits of Moore’s law.
Power optimizers are likely to be able to reduce costs faster than micro-inverters because optimizers consist of fewer components to begin with. SolarEdge, for example, recently released a new version of its optimizer with 30% fewer parts and 50% smaller in size. A kit solution like the one offered by SolarEdge already lies way below the cost premium suggested above by iSuppli and is similar to the price of a traditional string inverter today.
Micro-inverters and power optimizers offer similar benefits to the system owner and to the installer. It is forecasted that the non-residential market will continue to account for most of the U.S. PV market growth. Power optimizers are more flexible and scalable when it comes to commercial system sizes and, therefore, a greater penetration of power optimizers into the non-residential sector is expected. Finally, power optimizers will be cost competitive with traditional string and centralized inverters sooner than micro-inverters which increase their attractiveness to installers and owners seeking both module-level optimization and scalability.
Hannah Mann is Marketing Associate at SolarEdge, a provider of end-to-end solar power optimization and monitoring solutions (www.solaredge.com).
For more information, please send your e-mails to firstname.lastname@example.org.
ⓒ2011 www.interpv.net All rights reserved.