Inverter Supplier Sees ‘Extreme Growth’ Making Utilities Smarter

Utilities struggling to cope with new supplies of power from renewables are turning to a closely-held company hidden between Alpine hills to make their systems smarter. 

Workers at Fronius International GmbH are blending high-tech communications with power-management tools at a factory sprawled over 13 acres in Austria. Inside they’re making electric components needed by grid operators and companies such as Tesla Motors Inc. Last year Fronius more than doubled production and has now made more than 7.95 GW of equipment to make power suitable for homes and grid networks.

“We are in a very, very extreme growth business,’’ said Martin Hackl, the electrical engineer who runs Fronius’ solar energy division, in Wels, Austria, two hours west of Vienna. “The old hierarchy was a few power plants but we’re reinventing that — we’re making a distributed production and storage market.’’

Companies including Fronius, SMA Solar Technology AG and Advanced Energy Industries Inc. are profiting from the woes forced on utilities by renewable power. They help convert, store, meter and balance electricity generated by solar panels before it enters homes and power networks. They’re collecting vast quantities of data to make grids more intelligent by detecting new patterns of supply and demand.

“For a small company, it has a relatively large number of tailored inverter products focused on state–of–the–art applications, and is easily in the top 10 global inverter makers by production volume,” said Jenny Chase, a solar analyst at Bloomberg New Energy Finance.

Revenue from Fronius’ solar division grew 80 percent last year to 200 million euros ($228 million), accounting for about 40 percent of the company’s total sales, according to spokeswoman Andrea Schartner. The 71-year-old company, whose founder Guenther Fronius died last year at 107, remains wholly owned by the family and doesn’t publicly report financial results.

The company makes inverters — wall-mounted devices that turn direct-current electricity that flows from solar panels into the alternating current used by household appliances. Fronius boosted its solar workforce by 300 people last year and now has 1,100 working at its facility in Pettenbach, Austria, where as many as 500 inverters an hour can be produced. The nine-year-old facility more than doubled utilization, working at about 60 percent capacity and producing 1.35 GW of gear.

“We see the inverter as the point of intelligence,” said Hackl, whose brother Heinz runs the company’s 450-person research and development division. “We’re working to make them more intelligent, more communicative, to work in swarms of houses off photovoltaic and battery systems.”

Fronius’ inverters include built-in Internet servers that manage flows between solar panels, lithium-ion batteries and the electrical grid. The company is adding as many as 5,000 new customers each month who enter into a proprietary database. Utilities like Austria’s EVN AG and Verbund AG, which both offer Fronius inverters to customers, can use that kind of data to monitor energy consumption.

The U.S. and Germany are the number-one and -two markets for Fronius, which began business in 1945 by juicing up unreliable Austrian car batteries after World War II. The company subsequently developed more than 900 patents and supplies a third of all the wielding by robots that put cars together, according to Hackl.

“We knew Tesla because of our welding business,” said Hackl, describing how the Silicon Valley company made its way to the Austrian countryside. Welding still accounts for most of Fronius’ revenue, which the company said was about 500 million euros in 2015.

More than 6,000 people visited Fronius over the last year. Greeting them are a line of electric-vehicle charging stations the parking lot. Inside the company’s showroom, a 400,000 euro silver Mercedes SLS AMG electric vehicle has its door open. The factory floor where products are assembled is drenched with sun, water mists from the ceiling to optimize air quality and the scent of baked bread wafts from a workers’ canteen.

Hackl says there’s a revolutionary zeal driving the company as it strives to decarbonize the world by enabling a transition to renewable energies.

“Our vision is ‘24-hours of Sun’,’’ he says, flashing a notebook embossed with the slogan. Fronius has certified 3,600 trained installation and maintenance partners in 40 countries and operates wholly-owned subsidiaries in 18 of those, Hackl said.

This year, Fronius will expand in Greece, where the company expects sales to accelerate for power systems unhooked from the traditional grid.

“They have thousands of islands with micro-grids,” Hackl said, adding that the company conservatively expects growth over 20 percent this year. “It’s a healthy market for us.”

©2016 Bloomberg News

Lead image credit: Fronius.

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