For most people, thinking of solar usually brings to mind solar panels, the distinctive signature of solar energy. But this story takes a look at another critical part of the solar chain, the inverters. These devices, tasked with the job of converting DC power to AC and more, have been largely taken for granted, even as a giant industry worth USD 6.7 billion in 2018 has taken shape quietly to provide these for the solar sector. Thanks to their much closer relationship with traditional electronics, the inverter market has allowed a lot of players to survive, and even grow.
In fact, for 2018, the global inverter market exhibited all the signs of a maturing market, with the top 10 firms accounting for almost 75 percent of total market share. Within this, the top 5 firms had a share of close to 56 percent, according to a report by research consultancy Woodmac.
New entrants to the top 5 included firms like Spain-based Ingeteam and the Israeli Solar Edge, firms that have played from a different rulebook to enter the Chinese dominated list of the top 10. At the ground level,while utility scale developers take very informed calls on the right inverter to use, at the retail level, be it corporate or residential rooftop, the inverter remains almost a black box, not always considered very carefully, as compared to the solar panel or module. For this, the sector has mostly itself to blame, besides the virtual price controls it operates under, thanks to the many challenges faced by solar developers, be it price ceilings, very specific specifications on output and offtake, and mostly state or state backed buying of solar energy. This is usually a combination that spells death to differentiation and branding, and we have seen the impact with the inverter segment too.
So how are inverter firms looking at the evolution of the market for their offerings in India? Do they see the inverter take centre stage, as smart grids demand ‘smart inverters’. Will the solar inverter go well beyond solar to manage the full energy configuration on a house or building? When are virtual power plants coming, thanks to these smart inverters? We got some very interesting reactions when we spoke to industry players.
For most providers of utility scale inverters in India 2018-19 was obviously not a year they would associate with many fond memories. Sunil Badesra, Business Head, Sungrow (India) Pvt Ltd, subsidiary of the global Chinese player, and an established player enjoying the market leadership with other majors like Huawei, expressed his concern by saying that, “the overall installations of utility scale solar project have shrunk last year. The similar trend is likely to continue this year as well (in the range of 5-6 GW) due to multiple factors such as tender cancellations, PPA renegotiation, safeguard duty etc. 15-18 GW (mostly utility scale projects) are in pipeline which will make the trend go towards north from H2, 2020 onwards. The market has remained subdued and it is also seen that the tenders are getting either undersubscribed or barely oversubscribed with limited participants.”
On the flip side, Rucas Wang, Regional Director of Growatt looks at the longer term picture and sees solid growth,“Personally, I have high expectation for utility scale solar in the next 5
years. My estimate for capacity addition is around 50-70GW. Though, the market has its ups and downs, overall its growth momentum is very strong. That’s why we are planning to launch MAX 200kW for utility scale solar farms next year.”
However, on the case for local manufacturing of solar inverters vs imports in the country, Sunil Badesra said that “India is one of the largest growing solar markets across the globe. Sensing this opportunity, we have already set up our local manufacturing unit last year. This has helped us to reduce lead time in delivery to our customers. We have also started shipping inverters to global markets from our India factory. The local suppliers’ ecosystem for the inverter is evolving and we are exploring all possible options to build the local supply chain.” However, in order to boost local manufacturing of solar inverters in the country such inverter makers are seeking some support from the government as well. Badesra pointed out a few of them,“we would like to see more tax incentives, and incentives to inverter and component manufacturers under Make in India initiative to make local manufacturing more remunerative.”
On this Rucas Wang seconds the thought, “for local manufacturing, our company is considering opening up a factory here. But we haven’t finalized the plan yet.”
On the other side, V.V. Kamath of the Austrian Firm Fronius had a different take on the need for local manufacturing to be setup, and explained the challenges for the industry as he saw it. “As per our view currently local manufacturing does not have much impact on current projects, but with DCR category (Domestic Content requirement) already implemented for modules in some tenders, if implemented for inverters then local manufacturing (local assembly) may be useful for executing respective tender based projects, but major components required for inverter assembly will still need to be imported, as currently components availability locally is still a challenge.”
Do consumers differentiate between brands of inverters? Brijesh Prajapati, Managing Director – India of Sofarsolar says that “if local manufacturer follow process as per required testing facility, production facilities & required manpower to do complete manufacturing task with proper testing/quality process then customer will get proper worth products as per invested cost. We are recommending to client don’t go on cheap prices & polycarbonate type of body with lesser durability life product available in the market. Nowadays, if any local company providing cheap price product without complete process & assemble type of products so it will be not a long life system. So if client was not aware about the process, so we request them to go with proper process & visit some manufacturing company in abroad or collect some online data or visit some online manufacturing setup videos & gain knowledge to get proper products without any cheating in systems.”
The future of solar inverter market in the country also depends on how quickly the industry adapts to new requirements such as minimizing losses, higher uptime, more yield etc.Smart inverters today do much more than their predecessors. Besides delivering energy to the grid as efficiently as possible, they can actively regulate voltage, respond to frequency changes, ride through abnormal voltage and respond to instructions delivered via communications. In fact, 5G communications could well kickstart the next round of innovations in Inverters. Communication capability enables a collections of smart inverters to be aggregated and managed as virtual power plants (VPP) by a third party or even by a utility through a distributed energy resource management system (DERMS). This enables DERs to be dispatchable and capable of delivering energy and grid support services at a scale comparable to large generators. The big challenge will be doing this at retail level, as utility level control is already here.
As we have covered elsewhere in this issue (See, The Discom Perspective), smart inverters are the best hope to solve some of the biggest challenges discoms cite, when it comes to solar power.
Rucas Wang of Growatt inverters on the technological shift sees it all start with inverters capable of doing more at scale, “we are likely to see the shift to 1500 volts system for rooftop solar in coming years. And we’re gonna see the shift to power line communication for string inverters. Growatt devotes significant R&D to technology shifts and we’re using these new technologies to develop our new rooftop inverter MAX 200kW. We’ll unveil its features next year.”
On the pace of technological shift in solar inverter’s space Sunil Badesra of Sungrow said, “Currently our inverters have achieved 99 percent efficiency. This is going to get even better with improvements in IGBT technology and new materials. The capacities of the inverter are growing bigger along with smaller form factor. Such compact designs require effective and efficient thermal management to maintain high life of the components and the product.”
He adds that minimizing losses remains the holy grail for his firm today too. “Innovative design has been the core feature of Sungrow inverters to minimize the losses while delivering high rated power continuously. As solar projects are being set up on all possible terrains (deserts, water bodies, high altitude, corrosive/ salty environment) and in harsh climatic areas, such features will become more imperative while evaluating the inverters.The inverters are gradually becoming modular in nature with higher redundancy options to achieve higher uptime and more yield.”
However, V.V. Kamath of Fronius India commented, “rather than thinking of an inverter which manages PV and converts DC to AC, we need to understand its potential to manage energy as a whole. It should support the features of load management, (controlling of small devices), EV charging, water heating etc. This would be like a full package of energy management” He adds that “there are advancements that are happening in the field of Hydrogen Fuel Cells technology which would certainly become a breakthrough in the coming years.” Referring to advancements in Hydrogen fuel cell batteries that will make their own demands on inverters that can handle the high energy produced in those processes.
Brijesh Prajapati of Sofarsolar is of the view that, “Nowadays demand is for hybrid inverter, zero export facilities for net metering &, rooftop projects in largest MW scale. With government subsidy facilities, agricultural solar pumping project with beneficial scheme for farmers,the storage inverter future will also come very soon. Upgraded technology from 1000V/1100Vdc system to 1500Vdc system in string inverter option availabilities /switching in central inverter to string inverter for cost effective & easy service solution.”
With the new technological advancements coming in, the demand for storage and hybrid inverters likely to take off soon. On how this will impact decision making while picking the right inverters by developers, Sunil Badesra says that “Sungrow is one of the leading players in battery energy storage with 800+ numbers of global installations. It has both energy storage and inverter solutions for all the segments from residential to large utility scale projects. For utility scale projects, developers should go with right kind of suppliers who have strong credentials in both PCS and energy storage technology to achieve better grid integration of RE power while meeting the technical requirements of the storage/ hybrid project.”
“Actually for Growatt, we have a wide range of PV solutions, including, on-grid inverters for residential, commercial and utility scale solar plants as well as storage and hybrid inverters. So for us, the growing storage and hybrid projects mean more business opportunities and we hope to bring our advanced storage and hybrid solutions to the Indian solar industry, commented Rucas Wang of Growatt.
Adding to it, V.V. Kamath of Fronius India explained that, “with new options coming into picture like the reactive power compensation, energy export restriction etc., it invites the introduction of storage and battery systems to increase the self-consumption rate of the customer. We at Fronius are alive to these requirements and have developed newer generation inverters called Gen24 which are hybrid, and come with Li-ion storage. The Fronius Smart Meter also helps in restricting the energy export into the grid.”
Sofarsolar’s Brijesh Prajapati is also optimistic about future demand, referring to the experience they have had with the existing hybrid inverters so far.“It is a good option and high demand product in the market. Already, Sofarsolar hybrid and storage inverters are performing well in European and Australian markets. In India, North East and South India are emerging as very good markets for the hybrid inverter business.”
Furthermore,storage and hybrid inverters can be quiet beneficial for the residential rooftop solar segment as well, as consumers can store electricity generated during the peak solar production time during the day and can consume that electricity in evening time, when power consumption is generally higher. They can also put grid-connection for the backup purpose. We have already seen how California State in the US has subsidized both solar and storage for people living close to areas where power cuts became a necessity due to risk of wild fires. The idea was to make themselves reliant for their energy needs to an extent, if the grid needed to be cut off.
Despite India is trailing its rooftop solar targets, the growth of the sector last year was promising enough to make industry players look to the future with renewed optimism. Sunil Badesra said that “it is true that the rooftop solar in India has been far away from the government’s set target. However, with more awareness and commercial advantage, the adoption has picked up, especially in C&I segment. This has primarily led to strong rooftop growth last year.”
On the current trends for the rooftop solar, Badesra said “this year, Gujarat has taken lead in bringing out the largest ever residential tender of 600 MW for the entire state. Sungrow has maintained a healthy double digit market share in Indian rooftop solar market and achieved more than 100 percent Y-o-Y growth in total sales volume (MW).”
In-line with this and foreseeing future growth opportunities in India Rucas Wang too added that “we believe that solar will be on the rise in India for years. That’s why we have invested heavily in India, hiring more and more locals for the market here. We have local sales representatives, pre-sales and aftersales engineers. It will provide better services for our clients as well as prepare us for growing business opportunities.”
Adding to it, V.V. Kamath said, “considering the total installed roof-top solar capacity which is 4GW+ and our target of 40 GW there is yet a long way to go.We definitely see a major opportunity here in all residential, commercial and industrial (C&I) roof-top installation with the advantage of having a wider product portfolio.”
On the future perspective after tapping the vast potential of utility scale inverters’ market in India, the solar inverter manufacturers have big plans in terms of value, installation, or market share as well. Sunil Badesra said, “Sungrow has more than 87GW+ capacity across the globe. In India, our supply stands at 4.2 GW+ and we hope to breach the 5GW mark soon. We being the pioneer in bringing innovative features in our inverters and with new product offerings, we have consistently maintained 17 percent+ market share in Indian utility solar segment consecutively for last two years.”
Growatt’s Rucas Wang shares that “we are optimistic about our development in the utility scale sector. Next year we’ll focus on the relatively smaller size of the utility scale market and with our new MAX200kW coming up next year, we’ll have a good bite of this cake.”
According to V.V. Kamath, Fronius India is targeting it’s market share of more than 5 percent.
Besides all of the above factors, one of the significant factors for inverter sales is the involvement and awareness of the end customer. These days consumers are focusing more on the use of new technologies as they can be helpful in reducing energy transmission losses, cost saving, initial maintenance training provided by inverter suppliers etc. In-line with this, change in the marketing tricks and techniques of these inverter
suppliers have become need of the hour. This was rightly explained by Sunil Badesra, “we feel customer involvement is an important aspect in any B2B technical sales process. The performance, service support and reliability are major concerns for long term association with any product/ brand. This brings an opportunity for innovative marketing strategy for better brand building and higher customer retention.” While Growatt’s Rucas Wang explained about the difference between dealing with end customers and EPC and integrator clients, “end customers influence the decision of choosing inverters for sure. And their decision making process is different from that of EPCs and integrators. EPCs and integrators are more professional and rational in choosing inverters. They will consider the technologies, installations, services etc of the inverter brand. In this aspect, Growatt sales and technical engineers can discuss with EPC and integrator clients on our advanced technologies and professional services.”
Wang further added that, “but marketing to end customers is quite different. Customers will make decisions according to their impression or sometimes stereotype of the brands. The change of marketing on end customers will be the efforts and engagements from EPCs and integrators to explain and communicate the technology and service capabilities of the brand to the customers. This is the brand communication Growatt has been working hard to achieve by engaging our clients, EPCs and integrators. In coming years, Growatt will continue to provide professional training on the technologies and services in India!”
V.V. Kamath also explained about the level of consumer awareness and his company’s marketing tactics by saying that “when we look since the past years, there is a good amount of awareness about the critical aspects of the PV, the products and technicalities that has been created among the people. The end customer/consumer could manage to evaluate or consider only quality products for their installation. There is always a room for quality in the price sensitive market of ours and we have seen this in practical while customers choose only Fronius for their installations.”
It’s clear that even as the module and cell battles continue, the inverter sector in solar PV’s has an opportunity to look well beyond solar, thanks to growth in storage and the ability to manage more and more devices through inverters. As solar, or more broadly, renewables share of grid goes up, inverters are far more likely to play a critical role in providing aggregation, real time intelligence, and even managing supply optimally. That change could throw up some very big winners indeed, possibly bigger than the projected industry growth rate of over 15 percent till 2026, which should take it to a USD 13 billion sector by then. India, which will be in the thick of the solar transition by then, can hardly afford to miss out, in terms of encouraging manufacturing in the country. Just one more reason to ensure that the whole sector has a conducive environment to grow well.