The GreenStalk

This wraps up my “solar debates” series: descriptions of the topics that we debate in the solar industry, at conferences and over drinks.  And this last one means a lot to me, because it is the sector that I work in: distributed power electronics.

Introduction

There are plenty of startups working to create better/cheaper/smarter versions of standard solar components – modules, inverters, racking, etc.  But there is a category of startups working on technologies that represent a brand new part of the system: smart, module-level electronics.

The basic idea is to put smart boxes behind each solar module.  These boxes increase the energy production of the system, and provide data on how each module is performing.  To really understand this, it’s worth a quick review of how systems are designed today.

Solar architectures

Currently, an installer will connect all the solar modules (say, 2,000 modules on a commercial rooftop), into an inverter (the size of a small car), which optimizes the power and converts direct current (DC) to alternating current (AC).  The problem with this approach is the central ‘optimization.”  For example, if the 2,000 modules are not perfectly balanced, then the central optimization won’t be able to get the maximum power.  Just a small amount of mismatch can lead to a big drop in power.  Also, the system owner doesn’t have any idea what is happening inside the system.  The inverter will tell what is happening overall, but doesn’t give any clue what each of the 2,000 modules is doing.  If the system doesn’t perform well, it can be very difficult to find the problem.

Category value proposition

This new area has a number of pros, and a couple cons.  First, the pros:

Increased energy: By keeping each module performing at its peak power point, these architectures can squeeze more energy out of a solar plant.  On a residential system (where there are trees, rooftop obstructions, and other sources of shade), the increased energy could be 10-20%, or even more.  On large, unshaded systems, the performance gain is more like 5-7%.

Advanced system data: With these architectures, system owners get data on how each module is performing.  A system with 2,000 modules will have 2,000 sources of data, instead of one.  This is useful for spotting failures and getting them fixed.  Otherwise, small failures can go unnoticed for years.  Not only does this keep system uptime higher, but it reduces risk, and therefore should eventually reduce the cost of capital for financing these systems.

Safety: These systems enable plant operators to shut off the power right at the module in the case of an emergency (such as a fire).  This makes the rooftops safe for the firefighters to do their jobs.

And, the cons:

Cost: Of course, these systems cost money.  The main cost is the cost of the hardware – but customers also factor in the incremental installation cost, if any… and typically the cost of the software.

Efficiency: Any time you have a piece of power electronics in your system, there will be some efficiency loss (even if it is small).  So some of the increased energy from the module-level power control is eaten up by the losses from the components in the system.

Risk of failure: Anything can fail.  And since these technologies represent a new layer of “stuff”, they also add more potential failure points to the system.  This isn’t necessarily fatal – some technologies can fail to the “on” position, where a failure of the electronics won’t stop the module from producing.  But it is still a factor.

The Architectures & Startups

A number of startups are all developing slightly different flavors of module-level power electronics.  Overall, there are three dominant types:

These innovations create a great arena for debates.  Which architectures will win – and how ubiquitous will these components be?

Since I work in this sector, I’m of course biased.  So instead of just picking winners, I’ll explain a few of my hypotheses for how this industry will evolve.

1) Micro-inverters do not scale

Micro-inverters do a lot of work (basically, convert DC to AC, and condition it for the grid).  But for large systems, it doesn’t make sense to do all of those steps at each module.  Many of the components (capacitors, transformers, etc.) are more efficient and cheaper the larger they get.  This hypothesis is validated by looking at the costs of the systems: if you compare EnPhase (micro-inverter) to Tigo Energy (DC-DC maximizer), then EnPhase is cheaper for systems under 4kW, and Tigo + central inverter is cheaper for systems above 4kW.  Furthermore, the projects validate this: Tigo has recently been installed on a 530kW system on the roof of Clif Bar in Berkeley, while eIQ Energy is developing a 1.8MW system in Southern California.

2) Parallel products have benefits, but come with a cost

Both DC architectures are good, but they have different pros and cons.  The series architecture (for example, the Tigo ES Maximizer) has the advantage of being cheaper and more efficient, because it isn’t doing that much work.  It’s a “least-intrusive” approach, which keeps the part count really low and the efficiency really high.  The parallel approach, on the other hand, is more expensive and less efficient.  These products are boosting voltage, often by as much as 10x.  So they’re doing more “work.”  Now, there are benefits to the parallel design: it’s flexible (for example, can incorporate multiple PV module types into the same inverter), and it offers galvanic isolation, which is safer.  And with high-voltage modules (e.g. thin-film), the parallel approach can lead to a significant reduction in copper costs.  However, a majority of systems don’t need the benefits of parallel – or, more specifically, the benefits aren’t worth the cost in hardware and efficiency.

3) These architectures can become popular on utility-scale projects, but must prove significant reliability and cost-effectiveness

Within a few years, I believe that module-level power electronics can be popular on the largest solar plants.  These projects are much tougher to sell into – the system costs are lower, the profit margins are smaller, and the tolerance for problems (i.e. failures) is far smaller.  They are also more likely to use project financing, where large banks have to approve the components – and they typically look for a 5-year track record as a minimum.  I think that for module-level power electronics to take off at these systems, they must be very cheap – roughly $0.05/watt or cheaper.  But in the next couple years, we can get there.  In these systems, the value proposition will be more closely weighted toward data/O&M than simply energy harvest.  These systems are managed very aggressively (from a maintenance/uptime point of view), and the module-level data can be hugely helpful to find failures and keep uptime high.  The systems will probably drive more financial return from smarter system maintenance than they will from pure energy harvest.  Of all of these hypotheses, this one is probably the most controversial – many smart people don’t ever think module-level power electronics belong on large-scale sites.  Time will tell.

4) Regulation (particularly safety) can accelerate the adoption

There is growing momentum to make solar systems safer.  The best way to do this is to shut off systems at the module-level (other approaches to shutting of a system still leave voltage on the cables, which is not safe at all).  So if this keeps moving, we may see these types of architectures essentially mandated by the code/inspector community.  The latest development here is the latest edition of the National Electric Code, section 690.11, which basically mandates module-level electronics, and went into effect in January 2011.  There are still other things have to happen (including standards for how to test/validate that the equipment works), but this train is already in motion.

5) The data will give early adopters a competitive advantage

Many of the earliest customers of these technologies really see the data as the most important value of the power electronics.  I believe that module-level data will become integrated into many aspects of how solar plants are built and managed: how performance is predicted, how the installation & commissioning process works, how the systems are maintained, how warranties are negotiated… and the leading companies will always be one step ahead of their competitors.

(Some brief self-promotion: we’ll be giving a webinar on this in May.)

6) Module-box integration is an important step – but it is a means, not an end

Everyone is watching for the next step of having the electronics integrated into the module to create a “smart module.”  Right now these components are installed as separate components, which leads to increased labor and costs.  By moving the circuit board into the module, a lot of these costs are eliminated.  My only issue with this logic is that a lot of these startups think that their strategy is to exclusively work with module manufacturers.  Basically, they want to just convince the module manufacturers to put their products into the modules, and then assume that the volumes will go from $0 to billions overnight.  I don’t see the market playing out like that.  The module manufacturers first want to see market traction before they will invest in integrating a component.  So the startups have to build a solid stand-alone business before they will really be taken seriously by the manufacturers.  Also, the module manufacturers won’t necessarily push the new smart module.  Once again, the burden will be on the startup to generate the market pull for the product.  We’re hoping that Tigo will be the first startup to have a fully-integrated smart module available, hopefully by Q3 of this year.

I love this stuff – this is the most cutting-edge part of the solar sector.  And in the next couple years, my hypotheses will be proven or disproven.  Stay tuned – in the meantime, I’ll share news below:

3/18/2011: A literal debate on this topic, last week

2/24/2011: More startups entering the market

1/20/2011: A nice profile of Tigo Energy

12/28/2010: Power electronics – #7 on the year in review