GTM RESEARCH SEPTEMBER 2009
GROWTH, MARKET SHARE AND DYNAMIC CHANGE IN THE PV
INVERTER INDUSTRY
A SPECIAL REPORT FROM GTM RESEARCH | ERIC WESOFF GTM RESEARCH
SPONSORED BY ENPHASE ENERGY
COPYRIGHT 2009, GREENTECH MEDIA INC. ALL RIGHTS RESERVED
GTM RESEARCH SEPTEMBER 2009
TABLE OF CONTENTS
1 PRELUDE
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1.1 What About Inverters?
1.2 Distributed Electronics Startups
1.3 Microinverters vs. Distributed MPPT
1.4 Performance Monitoring
1.5 Panel Pricing Trends vs. Inverter Pricing Trends
1.6 Microinverter and DMPPT Firms Making Strategic Alliances, Recent Partnership, Capacity and Acquisition Announcements
1.7 Which Distributed PV Electronics Startups Are Shipping?
1.8 Inverter Market Size and Market Leaders
1.9 PV Inverters Installed in California
1.10 Inverter Company Market Shares
1.11 Conclusion
1.12 Appendix A – VC Investment in New Inverter Architectures
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LIST OF FIGURES
Figure 1-1: Distributed Electronics Startups
Figure 1-2: Microinverters vs. Distributed MPPT
Figure 1-3: PV Inverters Installed In California
Figure 1-4: Inverter Company Market Shares
Figure 1-5: Inverter Firm Market Share 2009
Figure 1-6: VC Funding for Microinverter Firms
Figure 1-7: VC Funding for Distributed MPPT Firms
COPYRIGHT 2009, GREENTECH MEDIA INC ALL RIGHTS RESERVED
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GROWTH, MARKET SHARE AND DYNAMIC CHANGE IN THE PV INVERTER INDUSTRY
GTM RESEARCH SEPTEMBER 2009
1 PRELUDE
In the last five years the solar industry has experienced unprecedented expansion,
with spectacular volume growth spurred on by progressive energy policies in Japan,
Germany, Spain and increasingly in the U.S. The year 2009 has seen a retreat – but
so has every industry. Regardless, solar is in the midst of a 20-year boom.
In addition to revenue growth we have seen intense technical innovation and billions of
dollars of investment across the full range of the solar value chain:
» Silicon feedstocks
» Crystalline silicon cells
» PV thin-film physics in CIGS, CdTe and amorphous silicon
» PV panels and PV panel manufacturing
» PV materials
» Financing solar installations
» Installing solar systems
» Inverters and balance of plant
1.1 What About Inverters?
Inverters represent about 8 percent of the cost of a solar installation, a significant
portion. But until recently, innovation had been more incremental than disruptive.
Certainly the dominant inverter suppliers, SMA in small inverters and Satcon
(dominant in North America) in large inverters, have been nudging their CEC efficiency
ever upwards. And with inverters occupying the weak link in the reliability chain,
vendors have been slowly but surely bolstering their quality and their warranties
in a positive direction.
Still, while VC investment was pouring into massive solar materials plays like
Nanosolar and Solyndra – little investment was reaching the inverter sector.
That started to change in 2006 and 2007 when VCs woke up and began investing
in early stage inverter firms: Petra Solar and Enphase Energy, to name the most
prominent. Soon after, a flood of VC investment entered this field.
(Details on VC investment in inverters and distributed electronics can be found in Appendix A.)
COPYRIGHT 2009, GREENTECH MEDIA INC ALL RIGHTS RESERVED
GROWTH, MARKET SHARE AND DYNAMIC CHANGE IN THE PV INVERTER INDUSTRY
GTM RESEARCH SEPTEMBER 2009
1.2 Distributed Electronics Startups
At least 20 new distributed electronics firms have entered the fray. Here’s a current list:
FIGURE 1-1: DISTRIBUTED ELECTRONICS STARTUPS
MICROINVERTERS
DC-TO-DC ARCHITECTURES
OTHER BOP STARTUPS
Accurate Solar
Accurate Solar
Annexus
Azuray
MPPC
Act Solar (acquired by NSC)
Direct Grid
NSC Solar Magic
Array Converter
Enecsys
eIQ Energy (fka Sympagis)
EOS
Enphase Energy
SolarEdge
eWatz
GreenRay Solar
S.E.T.
GenDrive
Larankelo
Tigo Energy
NavSemi
OKE (acquired by SMA)
Phobos
Petra Solar
Helios Power Solutions
SolarBridge
Source: GTM Research
1.3 Microinverters vs. Distributed MPPT
Microinverters and Distributed Maximum Power Point Trackers convey a number of
advantages to solar installations compared to central inverters. By individuating the
panels – maximum power point tracking is optimized for each panel. Power harvest
is improved while losses due to shading, soiling and panel mismatch are reduced and
overall system voltages are lowered. There are potential performance and reliability
advantages to both schools of distributed PV electronics.
FIGURE 1-2: MICROINVERTERS VS. DISTRIBUTED MPPT
MICROINVERTERS
DC-TO-DC
No specialized DC wiring or high-voltage components.
Higher voltages = lower resistive losses in copper
Strong monitoring capabilities
Strong monitoring capabilities
No single point of failure
Not necessary on every panel
Enables DIY home owner and consumer sales channels
High efficiency
Reduces cost of installation
Source: GTM Research
COPYRIGHT 2009, GREENTECH MEDIA INC ALL RIGHTS RESERVED
GROWTH, MARKET SHARE AND DYNAMIC CHANGE IN THE PV INVERTER INDUSTRY
GTM RESEARCH SEPTEMBER 2009
1.4 Performance Monitoring
Both microinverter and distributed MPPT topologies offer, as part of their feature set,
a sophisticated suite of monitoring functions. Most monitoring is offered with a webinterface that allows the system owner, installer or PPA provider detailed panel-level
diagnostics. Panel level monitoring is only possible in a distributed architecture and
offers a new level of insight into system performance.
1.5 Panel Pricing Trends vs. Inverter Pricing Trends
Solar panel pricing has dropped 10 percent to 25 percent per quarter over the last
four quarters and that trend is expected to continue through the first half of 2010 with
prices expected to stabilize by third quarter of 2010. Demand is picking up but there
are still inventory issues.
Remarkably, inverter pricing has remained relatively stable over the last few quarters.
Small-size inverter pricing (below 5 kW) has consistently been in the $0.80 to $1.00
per Watt range. Large-size inverter pricing is about half that price.
1.6 Microinverter and DMPPT Firms Making Strategic Alliances, Recent
Partnership, Capacity and Acquisition Announcements
A number of solar suppliers and utilities have made alliances or acquisitions of
distributed electronics vendors in what is clearly a validation of the potential for this
new solar architecture.
» SMA acquired the micro-inverter technology of Dutch firm OKE
» Satcon has added DMPPT to their Solstice sub-combiners
» Enphase is working with Akeena Solar and SunTech Power
» Petra is working with PSE&G on a $200 million pole-mount AC module contract
» Tigo Energy is working with distributor AEE Solar
» Solar Edge is working with Schott, BP Solar and Gerlicher Solar
» NSC’s Solar Magic is working with SunTech Power and SunEdison
1.7 Which Distributed PV Electronics Startups Are Shipping?
» Enphase has shipped more than 100,000 microinverters in the last 12 months.
» Solar Edge started shipping their DMPPT product in the third quarter of 2009
» Petra Solar’s contract with PSE&G calls for shipments to increase to 1,500
units per month by the end of the year
» Tigo looks to begin shipping its DMPPT product in the fourth quarter of 2009
COPYRIGHT 2009, GREENTECH MEDIA INC ALL RIGHTS RESERVED
GROWTH, MARKET SHARE AND DYNAMIC CHANGE IN THE PV INVERTER INDUSTRY
GTM RESEARCH SEPTEMBER 2009
1.8 Inverter Market Size and Market Leaders
The top four players account for 60 percent of the $2.4 billion PV inverter market with
SMA holding a dominant 38 percent global market share in 2008. But that 38 percent
doesn’t tell the entire picture – SMA dominates in small inverters but not large-sized inverters
Satcon claims a 60 percent market share for large size inverters (>100kW) in North
America. Its total revenue for 2009 decreased approximately $0.6 million (or 3
percent) from $24.7 million in 2008 to $24.1 million in 2009 (from the most recent
Satcon10Q). Gross margin decreased from 9 percent in 2008 to 6 percent in 2009.
SMA – unique amongst solar suppliers – actually forecasts its business (and the
global solar market) to show growth or stay flat in 2009. SMA said total sales in
the first half-year equate to sold inverter power of 792 MW. The full-year’s sales are
expected to be in the range of $998 to $1,072 million. The lower end of its guidance
corresponds approximately to the sales of the previous year.
1.9 PV Inverters Installed in California
Despite the global drop-off in solar, the California residential and small commercial PV
installation and inverter market is booming. Three of the leading inverter suppliers in
California (SMA, SunPower and PV Powered) have already doubled their inverter unit
sales in California when comparing 2008 to 2009 year-to-date. Enphase has already
come close to quadrupling last year’s unit sales in California.
FIGURE 1-3: PV INVERTERS INSTALLED IN CALIFORNIA
Source: California Solar Initiative Program Data 2008–2009
COPYRIGHT 2009, GREENTECH MEDIA INC ALL RIGHTS RESERVED
GROWTH, MARKET SHARE AND DYNAMIC CHANGE IN THE PV INVERTER INDUSTRY
GTM RESEARCH SEPTEMBER 2009
1.10 Inverter Company Market Shares
FIGURE 1-4: INVERTER COMPANY MARKET SHARES (GLOBAL)
INVERTER FIRM
2006 MS%
2007 MS%
2008 MS%
2009 MS%
SMA
24%
33%
38%
40%
Ingeteam
3%
10%
6%
6%
Kaco
6%
7%
8%
8%
Fronius
10%
9%
8%
8%
Enphase
NA
NA
0%
1%
Source: GTM Research
FIGURE 1-5: INVERTER FIRM MARKET SHARE 2009
Source: GTM Research
COPYRIGHT 2009, GREENTECH MEDIA INC ALL RIGHTS RESERVED
GROWTH, MARKET SHARE AND DYNAMIC CHANGE IN THE PV INVERTER INDUSTRY
GTM RESEARCH SEPTEMBER 2009
1.11 Conclusion
The inverter market as a whole is doing better than the solar panel market. Inverter
firms are not confronted by a global market with three times more capacity than
demand. Nevertheless, the financing drought impacts all players in solar and no
segment of the PV value chain is immune.
That said, inverter prices have remained relatively stable – at least compared to the
plunging ASPs of PV panels.
The Spanish solar market has collapsed and the German solar market is slowing.
Germany is about to see its usual seasonal cold-weather lull over the next few months.
But the U.S. market is going strong – especially in rooftop installations with California (and
to a lesser extent New Jersey) leading the way. Progressive solar policy is the driver here.
With the U.S. being seen as the next growth market for solar, inverter companies and,
notably, microinverter companies are benefiting from this surge.
Leading the way in microinverters is venture-funded Petaluma, Calif.-based Enphase
Energy. California leads the U.S. solar charge and with California as the U.S. driver –
Enphase has emerged as the fastest growing inverter company in the U.S. Enphase
has shipped about 100,000 units in the last 12 months, a stellar achievement by a
startup in a challenged market.
By all indications Enphase will be ramping up to hundreds of thousands of units in
2010, putting microinverters within a rounding error of a 4 percent global market
share in the once-stagnant inverter market.
Enphase and the other microinverter firms have shaken up the established inverter
order and are reaping the revenue from a disruptive value proposition.
1.12 Appendix A – VC Investment in New Inverter Architectures
Venture Capital investors have channeled more than $140 million into this sector and
founded at least a dozen startups. Of the many compelling reasons to invest in this
sector is the general capital efficiency of an inverter firm.
VCs clearly understand the benefits and market potential for these distributed
inverter technologies.
COPYRIGHT 2009, GREENTECH MEDIA INC ALL RIGHTS RESERVED
GROWTH, MARKET SHARE AND DYNAMIC CHANGE IN THE PV INVERTER INDUSTRY
GTM RESEARCH SEPTEMBER 2009
FIGURE 1-6: VC FUNDING FOR MICROINVERTER FIRMS
FIRM
SEED
Enecys
$500K
Enphase
GreenRay
ROUND B
ROUND C
The Carbon Trust, Wellington Partners,
2009 $10M
2007 $6.5M
2004
INVESTORS
NEA
BankInvest
2008 $15M
2009 $27M
2007 500K
Petra Solar
Solar Bridge
ROUND A
2008 $8M
Azuray
Madrone, Third Point, Applied, Rockport
MTC
2007 $14M
DFJ Element, BlueRun DOE Funding
2007 $6M
Battery Ventures, Illinois Ventures
eIQ (Sympagis) 2007 $10M
NGEN, Robert Bosch Venture Capital
Source: GTM Research
FIGURE 1-7: VC FUNDING FOR DISTRIBUTED MPPT FIRMS
FIRM
SEED
ROUND A
ROUND B
Solar Edge
2006
2007 $11.8M
2008 $23M
Tigo Energy
S.E.T. (TSX)
2008 $6M
ROUND C
INVESTORS
Walden, Opus Capital, Genesis Partners,
Vertex, et al.
2009 $10M
ICV, Matrix, OVP, Clal Energy
2009 $7.6M
Doughty Hanson (PIPE)
Source: GTM Research
COPYRIGHT 2009, GREENTECH MEDIA INC ALL RIGHTS RESERVED
GROWTH, MARKET SHARE AND DYNAMIC CHANGE IN THE PV INVERTER INDUSTRY