Led by the growing photovoltaic market (PV), the outlook for inverters used in Alternative Energy Resource technology is expected to remain strong, according to market research firm Darnell Group Inc. Industry growth in this application will be driven by a combination of government incentives and declining PV module prices. Projected to make up over 95 percent of the market, the inverters used in PV installations, both small (1-5kW) and large (>6MW), will far outpace those used in either wind or fuel cell applications.
Driven by the need to develop alternative sources of energy, limit greenhouse gasses and reduce the dependence on foreign energy supplies, the market forces driving the alternative energy resources industry vary by region. In Europe, the primary driving forces are feed-in tariffs, which have been successfully used in 16 EU countries, most notably Germany, Italy and Spain. In fact, in Europe renewables comprise the fastest-growing segment of the energy market. In North America, unlike Europe, the alternative energy industry is driven by a combination of regulations, subsidies and tax incentives and legislation. In contrast, Asia employs a patchwork system of incentives including subsidies and other government actions. In this region, the primary focus on alternative energy is the alleviation of power shortages and the development of backup and emergency power.
A particularly significant technological and architectural trend includes the continued development of Building Integrated Photovoltaic (BIPV) systems. A BIPV system involves integrating photovoltaic modules into the building envelope material and power generators. Evidence of this can be seen in the number of successful BIPV projects worldwide, ranging from individual residential units to large commercial developments. The development of BIPV systems is also significant because in buildings, it can play more roles than solely producing electricity. As an example, Sharp makes translucent solar PV panels that incorporate light-emitting diodes (LEDs) to provide illumination as well as power.
The emergence of technology developed to address the problem of PV shading is another area of expected growth over the next several years. Considered one of the biggest challenges facing photovoltaics, a small amount of shade can lead to disproportionate power loss of more than 50 percent. One completely shaded cell can reduce a solar panel’s output by as much as 75 percent. In a response to this challenge, a number of companies are developing products specifically designed to counter the effects of PV shading in both the residential and commercial sectors.
The move towards transformerless inverters has also made significant strides in the PV industry over the past several years. Despite concerns about safety, size limitations and the lack of technological maturity, they are considered considerably more efficient and can be produced at a much more competitive price. In fact, transformerless inverters continue to advance around the world and have achieved a global market share of about 70 percent. Additional developments in inverter technology include improvements in communications and monitoring and the trend towards longer warranties.
The trend towards more efficient inverters has also made considerable progress. In an effort to improve the efficiency of the technology, semiconductor companies are developing discrete IGBTs, MOSFETs such as CoolMOS as well as Silicon Carbide (SiC) devices in power modules and stacks, with the objective of raising solar inverter efficiency to 98 percent, and with the purpose of feeding as much solar-based electricity into the power grid as possible. A number of semiconductor companies are developing technologies designed to increase efficiency and reduce electricity waste to a minimum.
Despite the efforts of a number of government and regulatory bodies worldwide, the goal of interconnection and regulatory standards is still a work in progress. However, there are a number of groups working on electrical interconnection standards with the objective of reducing or removing barriers between distributed generation technology and the utility grid. A survey done found that most projects, including PV, wind and fuel cells, meet some sort of resistance from the utility companies when they try to interconnect with the grid. The expensive and sometimes difficult interconnection requirements currently in place worldwide comprise a key barrier to the increased use of alternative systems. One of the more interesting technologies being developed to drive interconnection is the development of a “smart grid.” However, removing current interconnection requirements is not as simple as changing the policies, and a method of resolving these barriers is ongoing.
Despite the attention given to large multi-megawatt wind farms, which are projected to continue growing, both in size and number of installations, most of the opportunities for inverter manufacturers are in the small wind turbine market (<100kW). Although the market for wind power inverters is only a fraction of the size (<3 percent) of the PV market, the small wind market is experiencing a number of significant developments, including the emergence of Building Integrated Wind Energy (BIWE) and the further development of vertical axis wind turbines (VAWTs).
Although the smallest of the three applications presented in this report, fuel cells present another important opportunity for inverter manufacturers. Eighty percent of the fuel cell units currently produced serve the stationary market in a number of capacities, including combined heat and power (CHP) applications, distributed generation on-site power and backup power. An especially important development is the FCC 07-107 requirement to provide eight hours of emergency backup power at remote terminals or wireless sites and 24 hours of power backup at central offices or switch sites. As a result of this FCC requirement, the telecom industry presents a promising growth opportunity for the fuel cell industry.
In addition, the rate of refurbishment and replacement of the existing building stock, combined with the new ultra-efficient housing/building laws such as those described in the European directive (2002/91/EC), contribute to a growing market for residential micro-combined heat and power. Fuel cells are an enabling or bridging technology which can allow the environmental and efficiency benefits of CHP to migrate into the residential market. In this respect, fuel cell technologies represent a market opportunity for the clean generation of electricity and provision of hot water and heating.
Darnell
