Photovoltaics inverter market Inverted times

Fronius has been producing and selling on-grid and off-grid During the boom year 2008, the inverter industry saw rapid growth rates. inverters since 1995 and 1999, Despite the economic crisis, manufacturers are now continuing the respectively. Photo: Fronius expansion of production capacities. Attention centers mainly on price cuts and development of new markets.

uccess in the solar inverter industry has been The consolidation of our global activities was a key closely connected to the PV sector. With gen­ factor for us”, says Günther Cramer, co-founder and Serous incentives in and and Spokesman of the Board of SMA. UniCredit Bank an­ new sales markets emerging in , and the alysts confirm that SMA has greatly expanded its grip Czech Republic, the year 2008 caused a boom for the on the inverter market over the past years. According­ inverter sector. For the first nine months of 2008, ly, the company’s market shares went up from 25 % British market researcher IMS Research says that in 2006 and 34 % in 2007 to 44 % in 2008, say the turnover increased by 110 % compared to the previ­ analysts. SMA continues its dedication to high-tech ous year. IMS Research estimates that the total mar­ inverter products: “New generations of SMA inverters ket size in 2008 reached US$ 2 billion. That year 80 % will ­experience price reductions, efficiency increases, of global turnover, says the researcher, was gener­ state-of-the art technology applications and addition­ ated on the European markets. al features to bring down installation and mainte­ In search for an interim balance and an outlook nance costs”, says Volker Wasgindt, Head of Press for 2009, information service provider Europresse­ and Association Work. dienst from Germany surveyed 174 global manufac­ turers for solar on-grid inverters. 33 of the total 71 re­ Positive trends in 2008 spondents offered an insight into their development in 2008 and their expectations for this year’s busi­ The majority of solar inverter manufacturers should ness and the global market. With products in the have been content with their sales in the last year. range of 2,200 MW sold in 2008, SMA Solar Technol­ ­Inverters Unlimited, Inc. from the United States and ogy AG from Germany continues to reign supreme in Meidensha from Japan are the only companies that 2009. “In 2008, we saw our biggest trade volume as indicate equal sales in 2007 and 2008. All other re­ yet and were able to strengthen our market share. spondents say their companies captured higher sales

116 Sun & Wind Energy 3/2009 Inverter sales worldwide (in MW) Manufacturer 2007 2008 2009e

SMA 950 2,200 n/a Kaco new energy 230 480 n/a Fronius 260 450 700 Ingeteam Energy 301 365 n/a Siemens 125 >300 >350 Sputnik Engineering 188 270 420 Power-One Italy 60 197 380 Elettronica Santerno 45 180 240 Kostal Solar Electric GmbH n/a 120 200 Phoenixtec 10 112 140 Riello Power Systems 5 90 n/a Sunways 55.8 86.1 >100 REFU Elektronik 2.5 63 120 Fagor Automation n/a 17 6.5 Steca 5.7 11.4 18 Meidensha 10 10 15 LTi REEnergy GmbH n/a n/a 20 Dünya Prestij Elektronik (DPSolar) 2 5 20 Oelmaier Technology n/a 5 16 Nanjin Green Energy Technology 1 2 2.6 Aero-Sharp Electric n/a 1 40 Technologies Pulse Power Technologies 0.2 0.7 3 Inverters Unlimited n/a n/a n/a

SMA is by far the largest inverter manufacturer in the market. Source: EuPD

Sun & Wind Energy 3/2009 inverter market

Data collection for string inver- ters at the Sputnik permanent testing station in Photo: Sputnik compared to 2007. Italian Power-One Italy Spa re­ High expectations in difficult times ports the steepest growth curve of more than 300 %. But also Ingeteam Energy S.A. from Navarre, Spain, To cushion the collapse on the Spanish market along closed a successful year: “The boom of the Spanish with the higher degression rates in Germany and to solar market in 2008 far exceeded our expectations”, secure an attractive return for investors that way, says José Luis González, the company’s Sales module and system prices must see drastic price cuts ­Manager PV Products. In 2008, Ingeteam was able to in 2009. If not, the sales predictions of the inverter in­ boost its sales by around 20 % compared to the pre­ dustry could be put at risk. vious year. New incentives or emergence of new sales mar­ Asked for their perspective on inverter price trends kets are both perceived as possible scenarios to ease in 2008, 50 % of the surveyed say prices could be re­ the tension in the industry. But the emergence of a duced; indications vary from 3 % (Power-One ­Italy new solar market with a potential equal to former Spa) to up to 20 % (Fagor Automation S. Coop, Spain). ­solar paradise Spain is not foreseeable. All the more In the current year, most respondents expect prices to surprising then, the majority of respondents are pos­ further decline by 5 to 30 %. But in order to stay com­ itive that sufficiently strong markets will emerge. At petitive in the ongoing price war, any savings poten­ the same time, experts are realistic that competition tial must be intelligently assessed. ­Solutronic GmbH will be ferocious. So far, the global market is domi­ from Germany intends to drastically cut its production nated by a small number of players, among them costs by 30 % in the course of the next five years. SMA and KACO new energy GmbH from Germany as ­Lower inverter prices will be able to contribute to a re­ well as Fronius International GmbH from Austria. In duction of the total system costs. “If system costs 2008, Kaco recorded an enormous demand for its in­ drop by say 20 %, our estimation is that inverter ­prices verter products that forced the management to rent will follow with a reduction of about 10 %. New gener­ further production space. Kaco’s new plant is mean­ ations of solar inverters will have a fair price while under construction with an investment of € 10 ­advantage”, says Roland Burger, Product Manager million. ­Almost all respondents in the survey con­ ­Inverter at Steca Elektronik GmbH from Germany. ducted by Europressedienst say production capaci­ ties will be expanded in the current year. In inter­ Expectations for the global market in views, experts confirm that the industry has been lit­ 2009 (multiple responses possible) tle impressed by the economic downtrend. Most man­ ufacturers expect a rejuvenating market in the second Number of Trends mentions half of 2009 and in 2010. But also in the long-term, Rising competition 21 prospects are seen as good. The year 2009 from the Consolidation 12 With 500 % capacity growth from 100 MW in the perspective of the manu- Higher production capacities 12 last year to 600 MW, Solutronic GmbH from Germany facturers: rising competi- has been showing the way. Only slightly slower Growing markets 17 tion, new global entrants growth is anticipated by Oelmaier Technology GmbH Shrinking markets 2 and growing sales markets from Ochsenhausen, Germany, and Dünya Prestij New market entries from national enterprises 8 Source: EuPD ­Elektronik (DPSolar) from Turkey. Both players target New market entries from international enterprises 20 400 % growth to 27.5 and 25 MW, respectively, until

118 Sun & Wind Energy 3/2009

Photovoltaics inverter market

the end of the year. Global top dog SMA looks at verter manufacturer Elettronica Santerno S.p.A. trusts ­lower figures in terms of percentages but not in terms the potential of the domestic market. 55 % of the to­ of absolute numbers. In 2008, the company expand­ tal 180 MW produced in 2008 were sold in Italy. In the ed its production capacities by 150 % to 2.5 GW. In survey, the company says that markets are expected 2009, SMA plans to redouble its capacities, says to grow more mature also in Greece, the United States Volker Wasgindt. The survey suggests that the re­ and South ­Korea. “We currently have leadership in spondents’ capacities will rise in sum from 8.5 to ­Italy and Spain and are fourth largest producer of so­ 11.8 GW in 2009 and then be 70 % higher than in the lar inverter products worldwide with a production ca­ previous year. But that is only part of the picture. pacity of more than 30 kW. We are following an ag­ Some experts warn that capacities will by far out­ gressive approach for entering these markets”, says reach the demand. In its “Solar Generation V” report Franco Valentini, Marketing Manager at Elettronica of September 2008, European Photovoltaic Industry Santerno. Association (EPIA) estimates that newly installed ca­ pacities in 2009 will be limited to about 5,160 MW. Global activities – a trump card

Growth curve to continue in 2009 Dünya Prestige Solar (DP Solar) from Turkey predicts its key markets will be located in the Middle East, the In the survey, the majority of inverter manufacturers Arab countries and in Cuba. After the company sold do not expect sales to suffer from the higher uncer­ 5 MW of inverters in 2008, the capacity for 2009 is tainties on the market. 19 respondents estimate that projected to quadruple to 20 MW. 40 % of the produc­ sales will continue to increase. Three companies do tion in 2008 was sold to Iraq, 15 % to Israel and 10 % not expect to see dramatic changes on their balance to Cuba. Canan Öztürk, International Sales Responsi­ sheets. Only two companies fear that sales might ble, says sales are expected to be 400 % higher in slump as a result of the overall economic down­ 2009. Indian Pulsepower Technologies Pvt., Ltd. has Sales: export quota swing. shipped most of its products to Malaysia, Indonesia The introduction of a cap for the Span­ and the United States in the past. But in 2009, says ish market in 2008 puts especially manu­ Prabir Choudhury, Director Operations of ­Pulsepower, Manufacturer 2008 in % 2009e in % facturers of high power inverters under the domestic market will have additional sales poten­ Power-One Italy 43 64 pressure that had previously found ideal tial. “In the past, a major portion of our products was Inverters Unlimited 0 20 conditions in Spain for construction of being exported. Solar on-grid inverters are just start­ Siemens >60 >60 large-scale plants. But the drastic lower­ ing to become interesting in India but sales have been Dünya Prestij Elektronik 70-80 70-80 ing of incentives in Spain and Germany growing since 2008. Beginning with 2009, we expect (DPSolar) forces the inverter industry to look for that the inverter sales market will catch up”, says Fronius 98 98 new sales markets for their products. Choudhury. After the extension of only few major ten­ Meidensha 80 80 ­“Italy offers excellent PV opportunities. ders disappointed the expectations last year, the com­ Advanced Energy 0 n/a The industry has recorded massive pany now expects an increase of 25 % in 2009. Solutronic 30 40 growth in the first three quarters that will Gradually, the world’s inverter manufacturers are SMA 40 n/a compensate for the demise of Spain’s so­ recognizing the potential of foreign sales markets. REFU Elektronik 46 48 lar energy market”, says Ash Sharma, The importance of global activities for the solar in­ Pulse Power Technologies 65 45 ­Research Director of IMS Research. How­ verter sector was emphasized by former “KACO Phoenixtec 99.9 99.9 ever, chances are that Italy may just as Gerätetechnik GmbH” changing its name to “KACO st Oelmaier Technology 0.1 25 well fail to cushion the Spanish debacle. new energy GmbH” as of February 1 , 2009. Compa­ Gerardo Montanino, Director of Opera­ nies with activities in more than one country will have Fagor Automation 0 n/a tions Department at the Italian govern­ a clear advantage in the future. German multination­ Elettronica Santerno 57 65 ment agency Gestore dei Servizi Elettrici al Siemens AG is one example. The global group Shanghai Aero-Sharp 80 85 Electric Technologies (GSE), says newly installed capacities in maintains subsidiaries in all countries across the sky resources solar tech 60 70 the Mediterranean state barely touched globe and that way secures a competitive edge when 200 MW in the last year. entering new markets. Solar inverters in the range of ZOF New Energy 5 30 Some experts believe that the future more than 350 MW are scheduled to be sold in 2009. Kaco new energy 30 35 key markets will be found in Italy, More than 60 % will be exported, says Claudia Ehrler, Sputnik Engineering 98 98 ­Germany, the Czech Republic and the Marketing Manager for PV inverters at Siemens. Visi­ Nanjin Green Energy 78 60 Technology United States. Especially, in view of new bly, the sector’s trend goes in direction of opening Ingeteam Energy 11 35 President Barack Obama and the Demo­ subsidiaries in new target markets and to expanding crats’ majority in the US Congress, Suresh export quotas. Oelmaier Technology GmbH is ­another Sunways 51 n/a Bhaté, President of Inverters Unlimited, good example. The company aims at boosting the ex­ Rielllo Power Systems 90 70 believes that renewable energy will re­ port quota of 0.1 % in 2008 to 25 % in 2009. Steca 65 n/a gain support. Andreas Schlumberger, LTi REEnergy GmbH n/a 50 Spokesman of Kaco, says that the highest Newcomers expected growth will be found in Italy, the Czech Export quotas are rising in ori- Republic and Greece in 2009. “These are young mar­ 18 respondents say the market will become more in­ entation for new sales markets. kets with a lot of potential and an industry realizing ternational. Seven companies expect that more Source: EuPD the advantages of PV”, says ­Schlumberger. Italian in­ ­global players will discover the solar inverter sector.

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Sputnik Engineering AG, Höheweg 85, CH-2502 Biel/Bienne, Switzerland Tel: +41 / (0) 32 346 56 00, Fax: +41 / (0) 32 346 56 09, E-Mail: [email protected] Photovoltaics inverter market

Left: Inverters at the module testing site in the United Arab On enquiry, Canadian Epod Solar Inc. reports its in­ coils still seems to leave room for improvement. And Emirates Photo: EuPD verter division is currently in pre-production phase. also the research of silicon carbide power transistors US Smart Spark Energy Systems has its products in seems to have more potential. “Switching and power Right: SMA inverters at the development stage. Indian manufacturer Genus Pow­ losses will be reduced for silicon carbide power elec­ “Archiconvent der Templer” er Infrastructures Ltd. restricts production to hybrid tronics components”, says Bruno Burger, Head of (headquarters of Knights inverters for off-grid application but also plans to en­ Group Electronics Dept. Electrical Energy Systems, ­Templar) in Munich Photo: SMA ter the on-grid solar sector in the mid-term. “We are Fraunhofer ISE. in the process of developing an on-grid solar invert­ In the end, the competitive edge will depend er solution to be launched some time in 2010”, says more strongly on purchasing strategies, says Kaco Kamal Narang, Senior Manager for International Spokesman Andreas Schlumberger: “Solar inverters ­Business at Genus Power. Refu Elektronik GmbH come with high material costs. Even though commod­ from Germany shows that a strong foothold in the ity prices have fallen as a result of the economic cri­ solar inverter market can be profitable. In 2007, the sis, supply shortages must be expected. Strategic company started to sell solar inverter products with purchases will then be a key element.” a capacity of 2.5 MW. Sales fared well in 2008 and Stefan Hausmann pushed the company’s capacities to 63 MW. Cornelia Daferner, assistant to the Managing Director R&D Further information: and Sales, says sales will redouble to 120 MW this www.aero-sharp.com.cn year. After production capacities were fully exhaust­ www.aesolaron.com www.advanced-energy.com ed in 2008, the company plans to expand production www.dunyaprestigesolar.com from 63 MW to 182 MW this year. The odds are that www.elettronicasanterno.it global groups from other business areas will also be www.epia.org www.epodsolar.com ready to enter the inverter market in the next few www.fagorautomation.es years. One example has been the takeover of Cana­ www.fronius.com dian inverter manufacturer Xantrex Technology S.L. www.genus.in www.gptronics.com by French power electronics group Schneider Electric www.imsresearch.com SA in June 2008. www.ingeteam.com www.invertersunlimited.com www.kaco-geraetetechnik.de Efficiencies reach technical limits www.lt-i.com www.meidensha.co.jp SMA says efficiency rates for its Sunny Mini Central www.njget.com www.oelmaier-elektronik.de inverters meanwhile reach up to more than 98 %. The www.phoenixtec.com.tw rapid development is pushing the technological www.power-one.com boundaries. But competition is growing and others www.refu-elektronik.de www.riello-ups.com will be quick to catch up. In two years, the end of the www.siemens.com rope for higher efficiencies will be reached, says an www.sma.de expert. When purchasing new products, customer www.smartsparkenergy.com www.solarmax.com preferences will then be based on other factors such www.solartech-sr.com as cost-efficiency, quality and brand name. www.solutronic.de But also in the development of inverter electrical www.steca.com www.sunways.de circuits, experts believe the industry is reaching the www.unicreditgroup.eu limit of what is possible. The development of choking www.zofenergy.com

122 Sun & Wind Energy 3/2009 C M The power of energy in your hands. Y

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MY Elettronica Santerno, leading company in solar technology, manufactures CY 2.6Kwp to 730Kwp photovoltaic inverters for all types of use.

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Elettronica Santerno S.p.A - Via Strada Statale Selice 47 - 40026 Imola (BO) - Italy - t. +39 0542 489711 - f. +39 0542 489722 [email protected] - elettronicasanterno.com Photovoltaics inverter market “We have continuously reduced costs!”

S&WE: SMA plans to redouble its production capaci- markets of importance. Our export share in 2008 ty of 2.5 GW in 2009. Does that mean the current was about 40 % and will be further expanded this market conditions for solar inverter manufacturing year. Presently, we are planning to open new sub­ are far less dramatic than many analysts say or is sidiaries, for example, in , Portugal, the SMA already preparing for better times? Czech Republic and the United Arab Emirates. Our Günther Cramer: The entire PV sector looks back on aim is to be first mover in these markets as we have an immensely successful year in 2008 but the future been in others. trends on the market are difficult to foresee. One should not forget that the revision of Germany’s S&WE: The last generation of inverters arrives at ef- ­Renewable Energy Law (REL) has created a stable ficiency rates of 98 % and more and that way Photo: SMA framework for the long-term; but the annual degres­ ­reaches the technical limits. Where do you see the sion poses significant challenges: a price reduction future efforts of SMA as regards research and devel- In view of the recent for PV systems is now turning into a more pressing opment? issue. Investments in a solar system with a fixed Cramer: I agree that efficiency rates of up to 98 and changes on the solar feed-in tariff are an attractive and most of all a se­ 99 % reach the technical limit. SMA was the first cure asset even in times of financial crisis. SMA esti­ manufacturer to achieve such high efficiency rates markets in Spain and mates that the positive market trends will continue for its products. Our next target is to successively Germany, the future of in 2009. But the significance of flexibility and fast adjust the efficiencies of all our products upwards. delivery for the next year cannot be overempha­ But, as I said, next to a wide range of technological the solar inverter sized. So we decided to increase our production ca­ innovations, our main goal is to reduce the total cost pacities to 4 GW with a new inverter factory that, by of ownership for our solar inverter products. After market is hard to the way, will be the largest of its kind. But we will all, the PV sector will have to see continuous price foresee. S&WE spoke ­also be able to drive up capacities in our existing reduction to deliver grid parity and a PV share of factories, if necessary. 12 % in Europe’s electricity supply until 2020. to Günther Cramer, S&WE: Germany’s lower feed-in tariffs make a S&WE: What challenges does grid stability and, in co-founder and ­reduction of system prices inevitable. particular, dynamic grid support, pose for the in- Spokesman of the How will the inverter industry contribute to the verter manufacturing industry? downward price trend? Cramer: In the past, PV systems had no grid interac­ Board of SMA Solar Cramer: Bearing in mind the higher degression rate tion and could not contribute to grid support. In and the grid parity target, a key element in the devel­ ­cases of grid fault or disturbances (e.g. voltage dips), Technology AG, about opment of our products is the reduction of costs. An­ the interconnection standards required inverters to his expectations for other significant aspect is the total cost of ownership shut down or disconnect from the grid. The intercon­ analysis that embraces the entire life cycle of the in­ nection rule will change with the new medium and the year 2009. verter and the PV system. In the end, not only in­ later the low voltage requirements that will soon be verter prices but also installation and operating introduced in Germany. The integration of distributed­ costs must go down. These aspects ask for a strong­ PV inverters into the grid with grid management ca­ er commitment to lifecycle, reliability, simplified in­ pabilities is, from our perspective, and especially in stallations and low maintenance costs: all key issues view of the sector’s targets – 12 % in the European in the field of research and development. More than energy mix until 2020 – expedient and necessary. 300 engineers are currently employed at SMA in the Taken Germany alone, the expansion goal is 60 GW area of research and development to which we are of installed PV capacity for integration into the power paying a lot of attention. With six new products per grid. Inverters are specifically well-suited to partici­ year, we want to arrive at a price reduction on par pate in grid interaction. Most of our products already with the REL degression. SMA has already taken that comply with the requirements for medium voltage road in the past: despite continuous innovation and networks. In the area of lower voltage networks, the the implementation of new features, we were able to manufacturers and electric utility associations still stay loyal to our constant price reduction policy. have to work out a range of appropriate require­ ments. The goal is to avoid a limitation of PV power S&WE: With the change of the feed-in tariffs in injection in low voltage networks through intelligent Spain of September 2008, the previous growth mar- regulatory measures in the inverter. Only if grid inte­ ket has lost in attractiveness. How important are gration is paired with innovative approaches, the global activities for SMA? Will global market activi- feeding-in of renewable energy will be increased ties change? And in what direction? cost-efficiently and in the short run. Cramer: SMA has expanded its global activities over the last few years. We maintain subsidiaries in all PV The interview was conducted by Stefan Hausmann.

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