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When is the last time you removed the side panel of your computer and replaced a network add-in card? When is the last time you installed an inverter on a residential solar system? These are basically the same question, only separated in time. In 2002, the add-in card question would have gotten you an answer; it seems unlikely today. Similarly, in relatively short order, the inverter question fill face the same fate. It’s important to note that the computer add-in card example is not arbitrary; those kinds of devices disappeared for the same reasons that the inverter is about to disappear.
I am the co-founder of an inverter company. Is this view of the inverter heresy?
It really comes down to beliefs and decisions from ten years ago, at which point the fate of PC add-in cards was already clear. Those beliefs still are: distributed energy resources should be based on a distributed architecture concept, consisting of hardware, communications technology, and software. The key decisions were: to use a systems approach (where everything works together), and using microelectronics instead of old-school approaches to energy conversion (which are locked into perpetually higher fixed costs).
The PC industry experienced the transition from many discrete devices to monolithic, integrated, multi-function devices. Semiconductor IP from previously discrete components like network cards was integrated into the latter, making a rapid reduction in part count, system complexity, and cost possible. Microinverters use this same semiconductor technology. Also like PC components, microinverters can be updated via remote software updates, which allows the rapid integration and roll out of new features. Semiconductor-based microinverters also follow the steep cost reduction curve we know from the computing world. As new generations of chips are ‘spun’, the cost of those chips is reduced.
The next great leap forward is now under way, and it centers on further integration with that other bit of semiconductor technology on residential rooftops: the module.
What does this mean for inverter companies that made the decision to use traditional means? They cannot easily integrate with solar modules. Just as with Ethernet card vendors who could not or would not pursue the inevitable integration path, inverter manufacturers that have locked themselves into technologies that cannot follow Moore’s Law will soon be in trouble. In the case of AC modules, everyone from distributor to installer will benefit from: fewer SKUs, fewer carries onto the roof, less copper, no electrical labor on the roof, and significantly less cardboard and packaging waste at the installation site, thereby making clean energy even cleaner. The installer also saves up to 12 work steps during the installation process with integrated AC modules, which reduces one of the leading drivers of residential solar installation costs, labor. Even if everything else remains comparable, this list of advantages is too long for the industry to ignore.
Companies that are dependent on selling dedicated, standalone inverters are in trouble. Companies that have not have diligently invested in R&D, not uncommon in the inverter space, and that don’t have a path to further integration should be worried. A modern, future-proof home energy system includes generation, storage, and management, backed by intelligence at each end-point. This system must have software that can updated without rolling a truck, and supply performance metrics recognized by industry standards bodies. Finally, the modern home energy system must provide rich data and apply big data analytics to drive insights about how solar must behave within the grids it occupies.
Taken together, the elements above point to a very complex system. The trick, however, is making sure that we do not burden the installer or the homeowner with that complexity. With the advent of AC modules, solar is becoming even more plug-and-play. That is another term borrowed from the computer industry, and its impact on solar will be no less profound than USB was on the PC industry.
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