The Coming Disruption in the PV Inverter Market

Until recently, the electronics used in PV systems – inverters and Balance of System (BoS) have been an overlooked and underinvested part of the solar ecosystem – despite being a multi-billion dollar market in itself and a product that serves as the principle point of failure in almost all solar power installations.

But lately, there has been a surge in investment and entrepreneurial activity in solar BoS – specifically the inverter and power conditioning circuitry that supports photovoltaic energy conversion. 

The Role of Inverters

The inverter is the connection between the solar array and the electric grid.  DC power produced by photovoltaic solar panels must be converted to clean sinusoidal 50- or 60-Hz AC power for use by appliances and for feeding back into the electrical grid, whether at the residential, commercial, or utility level.  DC-AC inverters perform this function and serve as the heart of the grid-connected PV system.

Today, solar panels are typically wired in “series strings.”  There are a number of drawbacks and performance losses that originate from this longstanding method that include:

•    Shading Loss
•    Complex System Design
•    Panel Mismatch Loss 
•    Difficulty in upgrading or replacing panels with newer, better solar modules
•    Little or inadequate installation feedback or fault detection
•    Safety issues for panel installer, electrician, and fire fighters

New Inverter Architectures

Two new and potentially disruptive “distributed inverter architectures” are being applied to solar deployments:

•    Microinverter or parallel architectures
•    Distributed MPPT or DC-DC bus architectures

They are very different approaches but both methods potentially offer substantial benefits including:
•    Anywhere from 5% to 25% improved energy harvest
•    Easier installation – reduced system engineering
•    Cheaper installation – less time spent on the roof and reduced wiring cost

If reliability issues can be confidently addressed – there is good reason to believe that distributed inverter architectures will challenge and eventually eclipse the business of centralized inverters.  It is this analyst’s opinion that within five to six years, the majority of solar installations will be using variations of the distributed inverter theme.

This creates a challenge for today’s incumbent inverter vendors and an enormous market- transforming opportunity for entrepreneurs and investors.

Lots more details on this disruptive new technology and this new market are in the latest issue of the Greentech Innovations Report.