Distributed Power Conversion for Solar PV Modules – Is There Value?

A Wall Street client recently asked about the impact of new distributed power conversion (DPC) products on the downstream solar industry. The PV industry rarely goes a week without a new market entrant or new product release announcement from this exciting new market segment.  Some think it’s a bubble that is going to burst as over 30 companies vie for a leadership role in DPC.

In a very broad sense, these new products take what is otherwise a dumb PV module and make it smart by placing electronics at the module level.

There are 2 types of products – DC to AC microinverters, which eliminate the need for a central inverter, and DC – DC optimizers that optimize string level output, and which work in concert with a central inverter.  A good review and comparison of these products’ pros and cons can be found here and here.

solar panel with DC optimizer

Externally mounted DC Power Optimizers

DPC products are well known for significantly reducing the harmful effects of shading on a series string by providing max power point tracking (MPPT) at the module level instead of relying on a central inverter.  They can also provide a number of other benefits.  Depending on provider, these benefits include correction for module mismatch, non-uniform module degradation, temperature coefficient difference and uneven soiling among others.   Sonme DPC products also provide detailed information on the performance of each module, the string and the overall array, along with environmental conditions monitoring.  System financiers really like this last benefit as it gives them unprecedented visualization of the system performance on a minute-by-minute basis.

DPC devices sit at the module level, either externally mounted or integrated into the junction box.  Recent entrant Sunsil, claims to do low cost DC – DC optimization at the cell level.

The question of value of these new products in lowering the levelized cost of energy (LCOE) is becoming clearer day by day. While all of these devices put a load on each module of up to 3W, the overall benefit is evolving as the technology and architectures evolve.

Solar panel microinverter

Enphase Microinverter Before Module Installation

Enphase has claimed leadership in the microinverter segment for residential installations, and clearly adds value in ease of design and installation, and increased power output. Microinverters place an enormous number of electronic components on each module and have not been proven for larger commercial and utility scale installations where reliability is paramount. These systems typically increase energy harvest on a residential installation up to 15%.

DC optimizers show clear benefits on 10kW arrays and larger. Large PV systems leak value daily due to the

solar energy, solar panels, photovoltaics

DC Optimizers for Larger Arrays

problems outlined above. Companies like SolarEdge and Tigo have first- offering products in this space. The extra cost and load of a DC optimizer product placed on every module seems to be more than offset by a large net benefit in energy harvest, lower system capex and lower maintenance costs. A thorough DC optimizer solution can provide up to a 20% decrease in the levelized cost of energy resulting in 1% – 4% IRR gain for the system owner.

While these relatively new products are showing value, challenges common to new technology remain. These include: Who has ultimate warranty responsibility when integrated into modules?  How do these products affect module and project bankability? Each product puts a load the system to operate, are there conditions when this could be a negative gain? With so many electronic parts spread out over thousands of modules in a larger array, is there a reliability issue (especially with microinverters)? Who owns the data captured from the array? How do you certify these products for safety and performance when no category exists within the current certification programs from UL and others?

These questions are being answered as the product group matures and operational history is analyzed. Clearly these new products add value and as they mature, and new, more robust product architecture emerges, it is likely they will become standard on most systems in the next few years.

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