The stark numbers in GTM Research’s Global PV Module Manufacturing 2013 report explain a trend in the power conversion and power electronics sectors that support PV.
The estimated 35 gigawatts per year of module oversupply forecast through 2015 means continued falling prices. Original equipment manufacturers (OEMs) that can find a way to compensate for the plummeting margins associated with that supply-demand imbalance may be able to escape the fate of the estimated 180 panel makers predicted to go broke or be acquired.
One way for manufacturers to compensate for falling margins is to incorporate more of the PV system into the modules they are making and selling.
“Every major module manufacturer is in some stage of contemplating or developing an AC module,” explained SolarBridge’s Craig Lawrence. “With more of the system, they can increase their revenues and increase their margins.”
An AC module is one that has power conversion electronics built into it to convert the direct current (DC) electricity coming from the panel into alternating current (AC) ready for transmission to consumers. The alternative is the standard solar system model which sends the panel’s DC current to a central inverter for conversion to AC current.
Lawrence said the SolarBridge microinverter business model is entirely based on partnerships with OEMs and began with SunPower (NASDAQ: SPWR) and VenQ Solar partnerships. SolarBridge now has agreements for its second generation technology with ET Solar, Mage Solar, Talesun, NESL, EOPLLY, SolarTec (TPE:3561) and AMD.
Non-disclosure agreements and pending negotiations prevented Lawrence from mentioning “tens of other OEMs” that are in “various stages of evaluation, certification or qualification” of SolarBridge technology. “We have a pipeline on the order of 40 to 50 module-makers at any given time,” Lawrence said.
“Our partnerships with module OEMs are an important part of our strategy,” leading microinverter maker Enphase Energy (NASDAQ:ENPH)’s Heather Kernahan said. Announced partners in Enphase’s AC Solutions Marketplace, she reported, are Phono Solar, Sharp (TYO:6753), Kyocera (NYSE:KYO), Hanwha SolarOne (NASDAQ:HSOL), and Schuco.
Tigo Energy’s Lisette Rauwendaal said her company has announced agreements with “a small, exclusive list of high-quality panel partners” that includes Trina Solar (NTSE:TSL), Hanwha Solar One, Upsolar, Astronergy, DelSolar (TPE:3599), Sunergy (PINK:SNEY), and Inventec. “We cannot provide additional information on partners who have not formally announced our collaboration yet,” Rauwendaal added. Tigo has, however, announced partnerships with junction box and combiner box manufacturers Shoals, Onamba, Bentek, and Amphenol, Rauwendaal said, and has also developed partnerships with KACO and Fronius, manufacturers of standard central inverters.
“We currently have a technology partnership in place with Canadian Solar (NASDAQ: CSIQ),” reported Enecsys’s Annie Wilson, to use the Enecsys Single Micro Inverter in Canadian Solar’s residential AC module. “We are also in discussions with numerous other panel manufacturers but unfortunately I’m not at liberty to release their names at the moment,” she added.
Module manufacturers are pursuing other power conversion technologies. DC optimizer SolarEdge recently added a partnership with utility-scale PV inverter manufacturer Woodward, Inc. (NASDAQ: WWD) to its growing list of OEM partnerships.
SolarEdge optimizers are built into modules’ junction boxes to efficiently prepare the DC for a central inverter. Solar module manufacturer and developer SOLON (ENTR:SOO1) is now marketing a Smart Module with the SolarEdge technology in Europe, and Upsolar is expected to bring that type of module to the U.S. market in early 2013.
In addition, LDK (NYSE:LDK), JA Solar (NASDAQ:JASO), and Phono, SolarEdge reported, “are at various stages of qualification” and “Trina, Yingli (NYSE:YGE), Hanwha (NASDAQ:HSOL), and Tianwei (SHA:600550) are conducting engineering studies” of modules with SolarEdge optimizers.
SolarEdge also makes an optimizer for Zep Solar framed modules that can be factory- or field-installed, making it available to the rapidly growing list of Zep partners (Trina, Hanwha, Eco-Kinetics, Sharp (TYO:6753), ATSolar (ETR:SFX), centrosolar (ETR:C3O), Upsolar and Yingli).
Power conversion device manufacturer Ampt recently announced a High Definition (HD) PV Alliance that includes Inverter manufacturers KACO New Energy, REFUsol and LTI REEnergy, junction box makers Shoals Technologies and Amphenol (NYSE: APH), solar module vendors Suniva, ZNShine, Upsolar and Eoplly, and monitoring service providers meteocontrol, Next Generation Energy, AlsoEnergy, and DECK Monitoring.
The Alliance members get access to Ampt’s proprietary power conversion technology. Ampt gets a place in the system architecture, and solar system builders can achieve potentially impressive cost savings.
“By ourselves, Ampt would be challenged to provide these cost savings,” acknowledged Ampt Sales and Marketing VP Evan Vogel.
Some of the pros and cons of AC modules with built-in microinverters and Smart Modules with built-in power conversion technology used with standard inverters are discussed here.