May 05, 2017

Solar Energy - SolarEdge's Optimizers Gaining Popularity

S92 GR, SEDG
By Sylvain Gavard
SolarEdge is gaining share with its optimizer inverter solutions in developed PV markets, such as Europe and Japan, while SMA has had to lower prices for its string inverters in Europe and India to maintain share against Chinese competitors.

SolarEdge’s Optimizers Gaining Popularity in Mature Markets
European and Japanese sources said module-level power electronics (micro-inverters and power optimizers) were gaining share against centralized inverter solutions (string inverters) because the DG (distributed generation) segment is now developing faster than the utility segment in mature markets, and module-level power electronics offer higher efficiency than string inverters in difficult locations, including rooftops. European and Japanese sources were particularly upbeat about SolarEdge Technologies Inc.’s optimizers, noting that in addition to DG projects, they are now also using them for utility projects, despite their higher price. Other European sources noted SMA Solar Technology AG also offered MLPE solutions because of its stake in Tigo Energy Inc. (SMA acquired a 27% stake in Tigo on April 8, 2016) but said its technology was much less attractive than SolarEdge’s.

Quotes:
“The big trend in terms of new technology is SolarEdge, with their optimizers. Sales for SolarEdge are going very strong in Europe. We put them in every third project instead of conventional central inverters, even for utility projects now. SolarEdge is hurting SMA also because they lowered their prices for utility projects, so they are now attractive for all kind of projects.”

“Everything that increases the output is currently more important than the price in residential business. SolarEdge’s optimizers are really more and more used in all mature PV markets, like Germany, but also Austria, Switzerland and everywhere in Europe. They also do excellent marketing, so their sales are really strong.” Europe

“Solar projects are getting smaller and smaller in Japan because of land saturation, and they are now installed in difficult locations. This is bad for the market leader SMA, while it’s positive for SolarEdge because they are more efficient in this configuration.” Japan

“SMA is again somewhat successful in the string inverter business in Europe because it lowered prices, but it is not competitive, or hardly competitive with its optimizers' solutions.” Europe

String Inverter Market Increasingly Competitive for SMA
The global inverter market is strong because global PV installations have been growing every year for more than 10 years, with string inverters historically getting the lion's share of the market. European and Indian sources said Chinese string inverter manufacturers Sungrow Power Supply Co. Ltd. (300274 CH) and Delta Electronics Inc. (2308 TT) were gaining share in the utility segment against market leader SMA, as well as against ABB Ltd., Hitachi Ltd. (6501 JP) and Bonfiglioli Riduttori S.p.A., on quality and price. However, European and Indian sources noted SMA limited losses thanks to growing price flexibility and strong quality recognition.

Quotes:
“SMA somehow comes back with its central inverters in Europe. They are clearly on a sales/rebate mode, sometimes even cheaper than some Asian manufacturers. They do well with volumes, but I don't know what this means for their margins.” Europe

“SMA and Sungrow seem to be gaining, and meanwhile leaders like Schneider [Electric SE] and Hitachi seem to be losing share.” India

“ABB still has some strong markets in the U.S. and Asia, but they got in lots of quality and service issues with their clients in Europe, and they lost lots of clients because of this.” Europe

“Bonfiglioli, which was once quite active in India, is slowly fading away. They do not seem to have brought in changes in technology.” India

Background:
A solar PV installation consists of four key components: solar modules, inverters, racking/mounting systems and performance-monitoring systems. Inverters convert the direct current electricity (DC) generated by solar modules into alternating current electricity (AC) so it can power domestic appliances or be injected to a utility grid. There are three different inverter technologies: string inverters, micro-inverters, and power optimizers. String inverters convert electricity from several modules. Micro-inverters convert electricity from each individual module. And power optimizers offer an intermediary option. String inverters are the most commonly used worldwide because they are the oldest and cheapest. Micro-inverter installations can outperform conventional string inverter installations by up to 20% by mitigating the negative effects of partial or complete shading and can monitor the performance of individual solar modules. Power optimizers, instead of converting the DC electricity to AC electricity, "condition" the DC electricity from each module before sending it to a central inverter; this results in higher overall efficiency levels than with a conventional string inverter and at a lower cost than micro-inverters. Micro-inverters and power optimizers are collectively referred to as module-level power electronics (MLPE), while string inverters are also called “centralized inverters.”

Contributors: Miriam Leunissen-Weikl and Usha Somayaji

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