The U.S. solar PV market is one of the great hopes of the PV industry. According to IHS iSupply, the United States was the third largest market for new PV installations in 2011, reaching a total capacity of 2.6 GW. If this upward trend continues, the U.S. will approach the size of the leading German market soon. For InterPV magazine, Dr. Alex Levran, President Renewable Energy Solutions at Power-One, shares his assessment of the U.S. PV market and the key trends in the inverter business.
By Dr. Alex Levran
The PV market is not only one of the fastest growing markets for solar energy worldwide, but is also one of the industry sectors showing a solid growth in the United States. During the past year, the total capacity of PV installations in the U.S. grew by 179% from 0.9 GW in 2010 to 2.6 GW in 2011. Nearly one GW has been added in North America in the last quarter of 2011 alone¦¡this is roughly equivalent to the size the entire U.S. PV market had reached by the end of 2010.1) This development has been fueled by the falling PV component prices and the effect of regional and national policies such as the expiration of the 1603 Treasury Grant Program.
As the price decrease is likely to continue in 2012, market experts expect this dynamic growth to continue in 2012 resulting in a total installed capacity of 3.5 to 4.5 GW by the end of this year. However, it is likely that some market segments will experience higher growth rates than others. Furthermore, there are some uncertainties manufacturers and distributors should take into consideration including effects related to the end of the Federal Cash Grant and approval timetables for large utility scale projects. The impact of states, which have met their Renewable Power Supply (RPS) requirements, is another factor which will considerably influence the future growth of the PV market.
The Market Driver: Large Utility-Scale Installations
According to NPD Solarbuzz, large-scale ground-mounted PV systems accounted for nearly 60% of the end-of-year installation push in North America in 2011. For the future market development, large installations operated by power companies will continue to play a major role in the United States. Especially states like California, Arizona or Nevada, where utilities have to source a certain amount of electricity from renewable energy sources, will drive the market growth in this segment. In California, for example, utilities have to generate 33% from solar, wind or biomass power plants until 2020 in order to avoid penalties and fines. Arizona, to name another example, only requires 15% of renewable energy as part of the energy mix by the end of 2025.
In addition to several state regulations stimulating the use of environmentally-friendly power, the United States offers perfect conditions for large-scale PV installations. Unlike smaller countries like Germany or Italy, there are still plenty of large areas available suitable for utility-scale solar power plants.
For inverter manufacturers like Power-One, this means a great market opportunity for large central inverter systems, which help to reduce the system-level BOS and the lifecycle costs maximizing the Return of Investment for plant operators. To meet the demand for reliable and cost efficient utility-scale systems, Power-One recently launched its new AURORA ULTRA-1400, one of the largest central inverter systems on the market, which will be available in the U.S. in May 2012.
With an output of up to 1.5 MW, the liquid-cooled system offers maximum power in a compact outdoor construction. Thanks to an innovative circuit topology the output voltage is 690 Vac which allows a significant reduction of AC losses. Designed with the requirements of utility-scale and large commercial installations in mind Power-One paid particular attention to extending the maintenance cycle and reducing the costs of maintenance. Industry-leading power conversion efficiencies of up to 98.5% and multiple MPPT, combined with high-speed Maximum Power Point Tracking (MPPT) channels, optimize energy harvesting across a wide array of operating conditions.
Medium-Sized Commercial Installations: Solid Growth
According to NPD Solarbuzz, commercial building-mounted solar PV installations are the second largest segment in the U.S. with a market share of 27%. In 2012, experts expect that non-residential roof-top systems will continue to play an important role¦¡only surpassed by utility-scale installations. In total, the market analysts from NPD Solarbuzz estimate that the U.S. has a 25 GW pipeline for commercial and utility solar projects, some of which qualified for the Cash Grant Program in 2011.1)
The potential the United States still offers of untapped large commercial buildings which would be perfectly suitable for PV installations is enormous. This becomes particularly obvious when looking at the average American city through an airplane window. Many of those unused roofs could easily be used for solar PV systems ranging from 100 to approximately 500 kW in capacity.
If and when those roof-top areas will be developed depends to a great extent on the future development of programs like the California Solar Initiative incentive program which guarantees a production based incentive or the Investment Tax Credit (ITC) applicable for 30% of the total amount spent for a renewable energy system as well on the capacity of the industry to keep driving down the cost of solar equipment to reach grid parity.
Residential Market: Micro-Inverter Sales Potential
Residential installations are the third market segment. Despite declining prices for PV components and the growing popularity of solar leasing options, analysts expect only a modest growth for the residential market as five key states have already met their Renewable Power Supply (RPS) requirements. However, small roof-top installations are very popular in the U.S. for various reasons ¦¡the desire to contribute to a more environmentally-friendly energy consumption being just one of them. In addition, solar energy is now becoming affordable to more and more Americans due to the considerable price drop during the last year. Taking these reasons into consideration, I tend to be a bit more optimistic for the residential market than the experts from NPD Solarbuzz and expect a considerable growth for 2012.
From an inverter manufacturer perspective, there is one trend, which has been attracting attention in the U.S.: the micro-inverter. This relatively new technology is an effective alternative to traditional string inverters when an installer wants to associate avoidance of string sizing and granularity of MPP tracking to reduce the effect of shades and mismatching.
Micro-inverters are a perfect solution for small installations which deploy only a small number of PV modules offering attractive benefits to customers. The small devices are affordable in low power installations, can be installed easily and help to maximize the energy harvesting in challenging conditions. By equipping each module with its own micro-inverter, each panel benefits from a separate MPPT, creating the optimum power curve for individual panel conditions. This does not only minimize efficiency losses in challenging conditions, but also allows for controlling every module individually. Moreover, installations can be easily expanded without the hassle of string re-sizing or panel matching.
The new micro-inverters like Power-One¡¯s new AURORA MICRO-0.3 micro-inverter, which was launched in 2011, also offer efficiency ratings comparable to traditional sting inverters. The MICRO-0.3, for example, reaches efficiencies in excess of 96%. Thanks to a rugged outdoor enclosure and HF isolation, the device withstands even the harshest environmental conditions. The micro-inverter can be deployed in any application requiring the grounding of either one of the input terminations. To further increase the product lifetime and long-term reliability, Power-One uses electrolyte-free power converters.
The solar PV market is one of the fastest growing sectors in the U.S. economy. In the last years, this industry has developed into a major economic force and has also proved itself to be a strong job creator. According to a recent report by The Solar Foundation, more than 100,000 Americans are now employed in the solar industry.2)
Summing up, the market outlook for 2012 is very promising¦¡at least from an inverter manufacturer¡¯s point of view. While the demand for utility-scale and commercial installations will continue to drive a rapid market growth throughout 2012, I also expect the residential market to grow by a considerable amount. The falling prices for PV components, which have been reduced by approximately 50% in 2011 and which are expected to drop by another 20% in 2012, make solar power generation affordable for more and more Americans. At the same time, there is a variety of lease financing programs available, which offer additional help to finance solar PV installations.
As the price reductions in 2011 were also accelerated by Chinese module supplies, it remains to be seen how the official ruling for the U.S. versus China solar trade dispute will reshape module supply and pricing in the second half of 2012.
Dr. Alexander Levran has been President of Renewable Energy Solutions SBU at Power-One Inc. (www.power-one.com) since July 2010. He joined Power-One, Inc. in January 2007 as Chief Technology Officer and served as its Senior Vice President of Research & Development. During that time, he oversaw the design and technology management functions of Power-One, Inc., including intellectual property, power conversion, and alternative energy. He previously served as Executive Vice President and Chief Technology Officer of Magnetek, Inc. from July, 1993 to December, 2006. Prior to joining Magnetek Inc., Dr. Levran served as Vice President of Engineering and Technology at EPE Technologies, Inc., from 1991 to June 1993. From 1981 to 1991, Dr. Levran served various engineering management positions with Teledyne Inet, a subsidiary of Teledyne, Inc., including as Vice President of Engineering. Additionally, he is Director of the Power Sources Manufacturers Association, and is active in other industry associations and standards bodies.
1) NPD Solarbuzz: ¡®North American PV Markets Quarterly¡¯, January 2012
2) The Solar Foundation: ¡®National Solar Job Census 2011¡¯, October 2011
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