The idea of combining power conversion electronics with solar panels to create AC panels has been kicked around for a while. But it hasn't taken off in the market partly because developing suitable inverters and making them in volumes has proven a serious challenge. That barrier is disappearing, however. SolarBridge Technologies, for one, announced Monday that it has begun producing its microinverters in volumes, a milestone for a company that delayed the product launch to improve the technology.

SolarBridge is hiring Celestica to make the microinverters in China, where the Texas company recently set up an office in Shenzen. Microinverters are essentially the miniature version of central inverters that convert electricity from direct current (DC) to alternating current (AC) for feeding the grid. Instead of one inverter for a dozen or so panels, one microinverter serves one solar panel. That design also brings the maximum power point tracking (MPPT) function of an inverter to the panel level and has become an often-touted advantage by microinverter developer.

MPPT refers to an algorithm that calculates and adjusts the optimal power output of a solar panel or an entire solar array. In a typical solar array, where panels are connected in series, the poor performance of one panel lowers the MPPT level of the entire array. As a result, solar panels that are doing well will produce at the same level as the poor performing ones. With microinverters, the low MPPT of one panel won’t affect the MPPT of other solar panels. The result is a greater overall electricity production from an array.

But microinverters are new to the market and haven’t generated enough field data to prove their reliability. They also are more expensive – 15 percent more, according microinverter leader Enphase Energy. Some central inverter makers such KACO New Energy, have argued that the benefits of microinverters don’t outweigh the expenses and reliability issue. But many of them also are developing their own microinverters so that they won't lose out on what could be a good-size market. Power-One announced a microinverter product just last week, and SMA Solar Technology plans to do so soon.

So far, microinverters have been used mostly in residential and light commercial installations.

Few microinverter developers are shipping products these days. Aside from Enphase, other players include U.K.-based Enecsys, which recently raised $41 million to expand its reach. California-based Enphase began shipping products in 2008 and made a move to Europe this year. Enecsys began shipments last year and has crossed the pond to North America.

SolarBridge initially planned to launch its first product at the end of 2009. But the company decided to “leapfrog to our next-generation product,” SolarBridge CEO, Ron Van Dell, told me in a recent interview. SolarBridge aimed to develop a microinverter that can match the life expectancy of a solar panel. It’s an important goal to reach in order to convince solar panel makers that they should integrate microinverters into their solar panels and market them as AC panels.

“Solar module companies will not compromise their warranty period or take a risk with integrating electronics if they aren’t comfortable that you are going to match their warranties,” Van Dell said. “Combined that with efficiency and cost, we feel good about where (SolarBridge’s new) product is positioned.”

SolarBridge is offering a 25-year warranty, which is lengthier than the 20 years offered by Enecsys and 15 years by Enphase.

AC solar panels are designed to cut installation time and cost. They are likely to find faster acceptance in residential and light commercial markets. Large-scale project developers tend to shy away from using new technologies.

Celestica is increasing its production of SolarBridge microinverters and expects to devote over 70 megawatts of annual factory capacity to their production by the end of 2011, Van Dell said.  

Van Dell was mum about which solar panel makers will likely roll out the first batch of AC panels outfitted with SolarBridge’s technology, but said those products should show up in the market this summer. He also pointed out that the company showed off the AC panel concept with SunPower and Kyocera at Solar Power International in Los Angeles last October. 

While SolarBridge focuses on selling its products to solar panel makers, other microinverter manufacturers are pursuing more traditional distribution models by selling to wholesalers and installers. That’s the case with Enphase, though the company also is bullish about AC panels. Enphase CEO, Paul Nahi, told reporters during a company open house in March that he expects AC panels to gain a greater use among installers in 2013-14.