Utah, USA — There’s a new billion-dollar solar tech market on the horizon. According to IHS Technology, 2018 will be a landmark year for the global solar microinverter and power optimizer market — breaking past the $1 billion barrier and ushering in an era of increased power output for PV installations the world over.
Recent figures published by IHS Technology show a compound annual growth rate of 27 percent will more than triple the existing market, which in 2013 stood at a comparatively low (yet not altogether disappointing) $329 million.
Cormac Gilligan, Senior PV Market Analyst for IHS Technology, said the exponential market growth is being driven by “increased market penetration in residential and small commercial segments in the big markets such as the USA, Canada, UK and Australia.”
Gilligan also cites continued adoption of the technology in European markets such as France, Germany and Italy as driving growth factors, as well as “price decrease of microinverters and power optimizers due to next generation product releases, which are making MLPE a more attractive solution.”
MLPE, which stands for Module-Level Power Electronics, is the umbrella term used to encapsulate solar microinverters and power optimizers. Microinverters are the devices that convert the DC (direct current) power generated by individual solar panels into AC (alternating current). These are capable of bring in 25 percent more electricity than conventional string inverters, which connect to entire systems and are therefore less efficient. Power optimizers require string inverters, but optimize efficiency by tracking the maximum power point (MPPT) of individual modules. Together, both technologies are key to unlocking the maximum power generating potential of photovoltaic solar arrays.
Currently, the U.S. represents the largest market for microinverters, with the bulk of the business going to residential systems. However this market segment monopoly may soon see a balancing out as a growing number of commercial installations look to take advantage of the dropping cost of microinverters. Power optimizers are also hot business in the States, with shipments set to jump by 160 percent this year alone.
According to Gilligan, a combination of improving technology and good old fashioned competitive spirit lie at the heart of the rapidly dropping costs of MLPE technology. “Next generation models are being released with lower parts counts,” Gilligan explained, adding that “new competitors entering the market will result in intensified price pressure.”
IHS forecasts that as prices drop and MLPE becomes more competitively priced with traditional string inverters, new global regions will begin to adopt the use of microinverters and power optimizers to the sum of 6.6 GW by 2018. Japan represents one of the most fertile regions, with demand for power optimizers predicted to swell to a penetration rate of 7 percent by 2018.
At the present time, Japanese restrictions forbid the importation of microinverters due to Japan Electrical Safety & Environment Technology Laboratories (JET) certification requirements – but IHS reports it’s only a matter of time before suppliers are able to gain JET certification and seize upon the opportunities inherent in that ripe residential market.
The September/October 2014 issue of Renewable Energy World magazine contains and in-depth look at this exciting market. This issue will be released in late September. Why not subscribe today?
Lead image: Solar panels via Shutterstock