National Semiconductor is entering the solar market with a product for improving each solar panel’s energy output, the company said Monday.

The established Silicon Valley company said its SolarMagic technology could recover up to 50 percent of the electricity that a panel wouldn't be able to produce due to shading. Shade from trees or other objects can prevent sunlight from hitting the panel. This, as well as debris and other problems, can seriously compromise a solar panel’s performance.

SolarMagic refers to a set of chips use National Semi’s expertise in power management. The company, based in Santa Clara, Calif. has lined up solar system installer REgrid Power in Campbell, Calif., to try out SolarMagic.

“The goal we have is to lower the solar system cost per watt,” said Ralf Muenster, director of strategic market development for National Semi. “We look at the panels and their existing architectures and improve them.”

National Semi (NYSE: NSM) is the latest semiconductor company to join the growing solar market. SVTC Technologies, which helps chip companies research and design products, said last week it would offer similar services to solar cell companies (see Green Light post). Applied Materials began making equipment for producing solar panels in 2006. Cypress Semiconductor owns SunPower, a solar panel maker.

Getting more electricity production out of each panel is a broad market featuring lots of different companies that make all sorts of gadgets. SunPower, for example, sells trackers that turn the panels to face the sun as it moves across the sky.

Startup Enphase Energy in Petaluma, Calif., launched its first product, a micro-inverter and monitoring service that tracks each solar panel’s performance to troubleshoot problems in real-time (see Enphase Energy seeks New Converts). The company said its micro-inverters work better than competing products by converting more direct current produced by the panels into alternating current (AC) for feeding the grid.

Like Enphase, National Semi has set out to improve the energy output of each panel. A common solar system design today uses a centralized inverter for each system, rather than putting small inverters on each panel. The centralized inverter typically looks for the highest-performing panels in the system, bypassing those compromised by shade.

With SolarMagic, each panel would have its own power-tracking device that makes sure the electricity generated goes through the DC-to-AC conversion process.

National Semi said its SolarMagic would work for all types of solar panels and is easy to attach to each panel. The chip company is targeting solar system installers first because persuading solar panel makers to add SolarMagic to their product lineups takes longer, Muenster said.

For solar system installers, each SolarMagic chipset is expected cost one-tenth of the price of each conventional, silicon-based solar panel.

The average price of silicon-based solar panels is projected to reach $3.37 per watt in 2008 and $2.71 per watt in 2009, according to Travis Bradford, president of the Prometheus Institute, a Greentech Media partner.

REgrid Power has been field-testing SolarMagic and reported seeing an improvement of energy output by up to 44 percent per system when up to 15 percent of the system was in the shade. The company said it saw an overall improvement, taking into account other problems, of 12 percent.

National Semi plans to begin selling SolarMagic toward the end of the year.

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