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Inverter technology drives lower solar costs

Solar power is poised to go mainstream in North America. In the U.S.—the world’s leading energy consumer—the solar market is especially ripe.

Leesa Lee, Enphase Energy, Petaluma, CA USA

Distributed architecture is a leap forward for inverter technology with continued advances expected to drive lower installation and maintenance costs.

Solar power is poised to go mainstream in North America. In the U.S.—the world’s leading energy consumer—the solar market is especially ripe. As with any new technology, though, how fast it happens depends largely on economics.

Installation costs

Solar system installation costs include three main components: solar module, 50%; balance-of-system (BOS) and labor, 40%; inverter, 10% (Fig. 1).

Solar module prices, while still accounting for the majority of overall system costs, have come down significantly—as much as 50% compared to 2008. Modules are becoming increasingly commoditized, and as their prices drop, BOS, labor, and inverters become more important as they become a larger proportion of the total cost of an installation [1].

Therefore, the BOS and inverter segments have seen increased interest over the past few years. One reason why inverters have received so much attention is changes in inverter technology, which impact not only inverter costs, but also BOS and labor costs. Improved inverter technology can also help with other challenges that PV must overcome to gain widespread acceptance in the marketplace.

New inverter technologies

Inverter R&D has focused on two areas. The first is incremental changes in the existing string/central inverter, and most of these changes are geared toward higher efficiency and larger capacity. These changes have led to bigger, more centralized inverters, for example, SMA’s new 500kW 500U PV inverter.

The second recent inverter development is a move toward decentralized architectures, including partial solutions such as DC-to-DC optimizers, consisting of add-on electronics designed to augment a central inverter, and complete inverter solutions such as microinverters.

System cost

Inverter prices have not decreased significantly in the past few years, and with module prices falling, inverters represent a greater portion of the total cost of a solar installation. As mentioned, inverter technology can also have a significant impact on BOS and labor costs. For example, higher-capacity central inverters reduce the number of inverters that need to be installed in very large systems, thereby reducing labor costs. This is offset to some extent by the wider distribution of DC wiring and the need for bulky and expensive DC combiners and DC circuit overcurrent protection.

New AC-based inverter systems can incorporate AC BOS equipment rather than DC junction boxes, DC combiner boxes, connectors, and fuses. Generic AC equipment is much cheaper than specialized DC BOS, and so total installation expenditures can be reduced significantly. Similarly, new inverter technologies, e.g., microinverters, avoid the need for a large central inverter, further reducing installation costs. This is particularly true for larger systems, where the large inverter can require installing a concrete pad, an air-conditioned hut, fencing, and a crane to lift the inverter into place.

New inverter technologies also have the potential to reduce solar array operating costs. Microinverter technologies make the array less prone to performance degradation from dust and debris, meaning less frequent washing. Normal soiling of modules can easily reduce power output by 5 or 6%. Also, inverters based on a distributed architecture allow for delayed maintenance. In this type of highly redundant system, if one module or inverter fails, the outage is limited to that module. The rest of the array will continue to operate normally. System owners and operators can have a plan of scheduled maintenance rather than emergency maintenance. Furthermore, maintenance costs are lower because microinverters can be swapped out quickly and easily, and by less-skilled staff—compared to large central inverters, which require expert diagnosis, repair, removal, and replacement. Finally, systems that include inverter communication and per module monitoring dramatically reduce the time required to troubleshoot the PV array.

Energy harvest

Inverter technology has always had a significant impact on energy harvest. The serial nature of module installation results in the “Christmas light effect,” i.e., any impact (dust, debris, shade) on module performance will also affect the other modules in the string. Distributed inverter architectures mitigate this effect as each module becomes an independent power producer. Per-module MPPT enables increased energy harvest. SunEdison recently installed their first microinverter-based system, resulting in energy harvest numbers 20% greater than the figures estimated during the design process [2].


Every installer knows about inverter reliability problems. The biggest headache is sending a tech to a site repeatedly to troubleshoot a system failure, and then return to install a replacement inverter. Microinverter technology introduces both improved unit reliability as well as better system reliability. Unit reliability is improved largely due to the change in architecture to a distributed inverter system where each unit is only converting a small portion of the power of the array. Microinverters typically have a small thermal footprint and low nominal operating voltages, both of which reduce stress on components, thereby increasing reliability. For example, the Enphase Microinverter processes less than 215WAC at 95.5% efficiency and has a nominal operating voltage of 30 – 50V. System availability is high because even if one inverter fails, it represents only a tiny fraction of the array. Finally, new distributed inverter technologies include per-module monitoring, allowing the installer to identify malfunctioning modules quickly and easily, and then simply swap-out the problem inverter utilizing the lowest possible labor skill level.


Increasing PV safety means minimizing the risk of fire and DC arc faults. PV fire safety has two aspects: prevention and suppression. AC-based inverter technologies can help reduce fire risk because an arc in an AC system self-extinguishes 120 times per second (on a 60Hz power system), whereas a DC arc is continuous. An AC system has no distribution of dangerous high voltage DC. AC-based systems are also safer for firefighters. An AC-voltage distribution system can be shut off prior to fighting the fire, while the widely distributed high-DC voltage of a DC system remains energized whenever the sun is shining.

Enabling technologies

Microinverters are not a new technology, with several early models gaining popularity in the 1990s. These pioneering models were gradually phased out, primarily due to their inability to break through the 90% efficiency barrier. The new generation of microinverters has efficiencies that are comparable or higher than popular central inverters, and reliability rates that are far superior to central inverters. There are many advances that have made this new generation of microinverters possible. These include advances in semiconductor technology, the availability of silicon carbide diodes to enable higher efficiency, and ASIC technology that has played a large role in shrinking the size of the unit and improving reliability. In addition, potting compounds are now available that enable the unit to withstand colder temperatures, and MOSFET’s that have far lower resistance than those available ten years ago. Finally, new magnetic materials and electrolytic capacitors are particularly well-suited for high-reliability and long-life applications when implemented in the low-voltage design of microinverters.

Future trends

The next logical step for inverter technology is integration of the inverter into the PV module, to create an AC module. This evolution will benefit all members of the solar value chain significantly. Module manufacturers like the concept as a way to “decommoditize” their offerings, thereby enhancing revenues and profits. It removes an entire step in the installation process and streamlines ordering and procurement, and of course system owners get the benefits of an integrated solution.

Distributed architecture is a significant leap forward for inverter technology. With the market share inroads that microinverters have made, we can expect to see additional models introduced. And as these advances continue to drive lower installation and maintenance costs, the industry will inevitably reach a price point where mass adoption becomes inevitable.


Microinverters were popularized in the 1990s but didn’t gain widespread adoption due to efficiency limitations. With PV module prices decreasing significantly, more attention is being paid to BOS, labor, and inverters, leading to resurgence in distributed inverter technologies.



Leesa Lee is the director of product marketing at Enphase Energy, 201 1st Street, Suite 300, Petaluma, CA 94952 USA; ph.: 877-797-4743; email

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