Followers of the renewable-energy market pay close attention to the sector’s three leading market research firms: Navigant Research, GTM Research and IHS. So, when all three firms release extremely bullish forecasts for a previously overlooked, niche component in photovoltaic (PV) panel installations within a five-month period, it raises eyebrows. That’s the case with module-level power electronics (MLPE)—a category that includes microinverters and direct current (DC) power optimizers—devices for which demand is suddenly booming.
PV systems use string-inverter designs that balance the output of all panels in an array to the output of the lowest producing panel in the string, and, as with old-fashioned Christmas tree lights, if one panel in such a string goes down, the entire system is out of service.
Through a process known as maximum power point tracking, both microinverters and power optimizers maximize the power output of PV installations, even when panels are partially shaded. Simply put, MLPE devices factor in solar radiation, ambient temperature and solar cell temperature to determine the optimum output voltage for each panel. MLPE devices enable panels to operate (and be monitored) independently and will bypass out-of-service panels without disruption.
Introduced about four years ago, microinverters were the first of these products to market, according to GTM Research. Power optimizers just came onto the scene within the last two years or so. Combined, the devices account for more than 1 gigawatt (GW) of installed capacity in 2013, doubling their cumulative installed capacity in just one year, according to GTM Research. By 2017, GTM expects shipments to surpass 5 GW.
Microinverters began as a niche solution for residential PV installations with less-than-ideal rooftop angles, according to Navigant senior research analyst Dexter Gauntlett, co-author of the firm’s November 2013 report, “Microinverters and DC Optimizers.” Microinverters, as you’d expect, are miniature inverters mounted on each panel to convert the DC power PV produces to grid-friendly alternating current (AC). This design eliminates the need for a central string inverter and enables each panel to contribute its maximum power output.
DC power optimizers are a more recent development. While they allow for maximum power point tracking, they still connect to the grid through a central inverter. These devices are less expensive and slightly more efficient than microinverters, but they are more frequently used on larger commercial installations.
“At 30 to 50 kilowatts, the cost of the inverter gets much less expensive per watt,” Gauntlett said.
Gauntlett attributes the rapid MLPE demand growth to the falling cost of PV panels. Now, consumers are more focused on the cost per kilowatt of produced electricity than on the initial upfront cost of the installation. Additionally, falling PV panel prices are making systems more affordable for less-than-optimal locations.
“As solar becomes more affordable, you’re looking at more homeowners, and that means there are more homeowners that don’t have ideal roofs,” Gauntlett said.
For home-automation fans, the equipment also generally comes with remote monitoring capability, either through in-home control screens, smartphone apps or both. System owners can receive panel-by-panel data on power output and notifications when a specific panel needs repair or replacement.
While demand for both types of equipment is booming, two manufacturers are primarily meeting it. Petaluma, Calif.-based Enphase dominates the microinverter market, while SolarEdge, in Fremont, Calif., leads the power optimizer pack. Both companies have seen tremendous growth in a very short period of time.
“Two years ago, it was a niche product, and today, it’s completely flipped around,” said Mike Rogerson, SolarEdge’s North American marketing manager. “Sixty-six percent of the market today is done with some level of panel support.”
While microinverters and power optimizers are designed for easy installation on-site, electrical contractors working in the solar industry may soon see less work with the devices than their sales numbers would indicate. Initially, both companies offered their equipment to solar-installation companies as custom solutions for customers with multi-angled roof systems. Increasingly, though, they are working with panel manufacturers to add value to what many are beginning to view as commodity products.
Research firm IHS believes contractors will see an increased number of panels shipped with preinstalled equipment. Cormac Gilligan, an IHS PV market analyst, said such relationships between MLPE and PV panel makers are mutually beneficial, allowing “module suppliers to differentiate themselves from the competition, while allowing microinverter makers to take advantage of the module suppliers’ sales channels.”
“The future is integrated,” Navigant’s Gauntlett said, explaining that shipping panels to the site already preloaded with a microinverter or power optimizer can make installation more of a plug-and-play process. “The whole focus of solar is to reduce the balance-of-system cost, and module manufacturers need a way to differentiate themselves,” he said.