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The only constant in life is change. What the Greek philosopher Heraclitus knew 1,500 years ago has never been more evident than in recent years in the PV industry. As the market has evolved, policy support has grown and waned, financing metrics have come and gone, and technology has continued to advance.

It’s an exciting time - and the pressure for change is one reason why we are seeing a new level of innovation in the market and the introduction of technologies to North America. While some of these technologies are completely new and others are just new to this market, advancements in both categories will significantly change what’s expected from solar electric systems.

And, while industry discussion has often centered on panel technologies, it’s the power conversion, grid integration and fleet management components that are driving much of this recent change, particularly in the residential space.

Independent installers, third-party ownership (TPO) companies and even informed consumers are beginning to take notice of the powerful new inverter-based tool sets at their disposal for obtaining better, more intelligent systems.

 

Technologies mature

It was only a few years ago that PV systems were static, mono-
directional forces pumping electricity into the grid. Today, they are becoming intelligent. Multiple maximum power point trackers coupled with shade-tolerant power point tracking algorithms mitigate the negative effects of shade. The integration of this technology into cost-optimized residential string inverters has allowed installers to provide cheaper long-term power to owners.

For complex roof orientations or installers relying on lesser-skilled labor, micro-inverter technology has opened up new markets. Improvements in micro-inverter efficiency and system design have also established the technology as a viable option for many business models and system locations that were previously ill-suited for solar.

The shift toward transformerless inverters has allowed installers to pass along better financial returns through higher efficiency and a lower cost per kilowatt-hour. The flexibility provided by these lighter-weight, more efficient devices has also allowed installers to realize shortened design and installation cycles, better optimizing their business costs.

Grid management capabilities have also found their way into residential inverters in Europe, creating a future-proof solution for rising levels of PV grid penetration. While North America has not yet developed the sophisticated approach to grid management that Europe has, the fact that the technology exists today means that emerging domestic grid management requirements will be more easily managed.

Similarly, additional enhancements such as the use of silicon carbide transistors and higher DC voltages will further raise efficiency and lower cost.

These current technologies are being used to varying degrees both worldwide and in North America to drive improvements in system performance and cost structure, and these trends are expected to remain significant agents for change for some time. However, they are not enough. Inverter efficiency is approaching the theoretical maximum of 100%, and there is only so much that can be done to cost-effectively engineer technical advances of existing features.

 

Addressing consumer demand

What offers the greatest opportunity for growth are the smart inverter features now being debuted in concept form or early releases that address some of the industry’s longest-held challenges. Rather than dwelling on improvements to existing technologies via new materials or manufacturing processes, they focus on a far more powerful influencer: consumer demand.

The most common misunderstanding residential solar owners have is that their system will continue to operate when there is a grid outage. Most are simply unaware that electrical code requires inverters to disconnect from the grid to protect line workers from the danger of unintended feed-in during servicing.

The most flexible solution to this consumer complaint is a fully sized battery-based system, but those remain costly and require maintenance - both factors that negatively affect buying decisions. Despite the impressive performance of modern grid-tied backup systems, this has relegated their current usage to areas prone to grid disturbances due to weather or aging infrastructure.

New solutions have been developed to tackle this problem. Some inverters now include the ability to deliver standby power during the day to a specified socket in the event of a grid outage, enabling owners to charge or operate small electrical devices like phones, laptops or fans. While it doesn’t provide all of the benefits of a full backup system, it provides power where there was none previously.

The industry is also increasingly becoming aware of the role energy management can play within a home and the benefits it can provide.

Forward-thinking integrators have seized this opportunity by offering home energy management solutions as a competitive differentiator. But who owns the technology to enable these benefits? Again, it’s the inverter that’s at the heart of this change and where this intelligence is kept.

Smart solutions are being developed that integrate limited storage within the inverter unit. This storage allows the time-shifting of PV power so that it’s optimally used, providing cost benefits to homeowners as well as utility operators.

Coinciding with the emergence of a more intelligent grid, these smart inverter solutions will likely contribute to how policy is crafted in the near term.

With waning support for feed-in tariffs, European governments, including Germany, have refocused their attention on galvanizing support for the development of storage, which fits nicely with the maturation of inverter technology and the value-added features that it offers.

The European introduction of integrated units comprising an inverter and small lithium-ion battery is a direct result of Germany’s decision to reduce its feed-in tariff support for solar power.

These advances are well under way in Europe, where several inverter manufacturers have announced the near-term introduction of commercially available units with integrated batteries.

The North American residential solar market has been supported by net metering policies that effectively allow the homeowner to use the electrical grid as an energy storage system for no additional cost. In recent months, utilities have begun pushing back against net metering, and it seems clear that these policies will shift over time, introducing additional cost for residential PV. Inverters with integrated storage and energy management technologies generally provide ready-made solutions to these problems.

Storage cost remains a critical topic and will limit system capabilities in the immediate future. But by creating a networked system driven by inverter technology and a home energy manager that intelligently communicates with other home-based electrical devices, energy becomes dispatched and used more economically than in the past. This allows for greater independence from the grid. With less reliance on the utility provider, homeowners mitigate the budget-busting effects of rising power prices. Over the long-term life of a PV system, the savings are enormous.

Inverter suppliers have already begun building this future capability into existing product lines by integrating communication protocols such as Zigbee into their feature sets.

As Zigbee-enabled sockets become available for retrofits and intelligent appliances are released to market for new purchase, PV installers will have a leg up in the race to provide energy management solutions to the general public.

In this future networked home, the inverter will communicate with the integrated batteries, HVAC system, appliances and even electric vehicles through an energy manager. The system will optimize energy production and consumption, ushering in a new era of value.

In this smart home, the inverter has become the energy center for the home’s electrical needs.

The smart home of the near future is likely to dovetail with a second major influencer of change: the emergence of third-party ownership. Market share estimates place TPOs near 75% in the markets in which they are allowed to operate. Their rise has been swift due to a strong value proposition and the ability to remove barriers of entry for residential solar prospects.

With any massive growth come challenges. For TPOs, this includes managing an ever-growing installed base and providing services to a fleet of systems with financial guarantees - and penalties - tied to performance.

But why does that matter for inverter technology? Inverters are the electrical interface into the home, but they also play the critical role of a communications device. Performance data must flow from the inverter to the meter and, ultimately, reach a service center, which manages the solar asset.

Technology within the inverter, as well as the service system of the manufacturer behind it, will play an increasingly critical role in the performance of solar fleets. Simpler, integrated communication modules that utilize flexible protocols will enable TPOs to leverage the inverter-supplied data to manage huge residential solar assets.

Although opportunities remain for material-based improvements and design enhancements, existing technology can only move the market forward in a limited fashion. Real advancements will ultimately come from listening to the end user and providing features that add value to a third-party owner’s fleet business or a homeowner directly.

And, with the emergence of e-mobility and investment in storage, this future - although it may be radically different from the model of just a few years ago - will bring significant benefits for the inverter industry. S

 

Bates Marshall is the vice president of sales for the medium power solutions group at SMA America. He can be contacted at bates.marshall@sma-america.com.