Solar inverters are the crucial link between a photovoltaic (PV) system and an energy offtaker as they convert the direct current (DC) output into alternating current (AC), which is used to power commercial appliances. Inverter technologies have advanced significantly over the years, and in addition to converting DC to AC, inverters now provide various other capabilities and services that ensure optimal performance of solar plants. For instance, grid-connected solar inverters automatically shut down the system if there is a power outage. Inverter manufacturers also provide post-installation services such as preventive operations and maintenance (O&M), and management. These help maintain a high level of energy production and performance for the overall project. Inverters also play a crucial role in energy storage.
Types of solar inverters
The most common type of solar inverters are central inverters, in which all solar panels are wired to the inverter box in a string, and DC to AC conversion occurs at one central location. Since solar panels are wired in a series, each panel’s power output depends on the working of other panels. Meanwhile, in a string inverter, all solar modules are connected in a series circuit to a DC electric cable, which is then connected to a single inverter box mounted on the main AC panel. A central inverter takes input from a number of arrays and operates at a single maximum power point. Central inverters are thus ideal for large systems where production is consistent across arrays. On the other hand, string inverters are more flexible and hence suitable for systems with different array angles and orientations. However, central inverters have high installation costs as they require a separate concrete foundation. Meanwhile, string inverters do not require any foundation as they are mounted on the array structure. Further, each string inverter has a separate voltage and current monitoring device, which makes system monitoring easier as compared to central inverters. Thus, in the case of a string inverter, it is possible to monitor the overall plant performance and minimise energy losses without incurring any additional expenditure.
Microinverters are also becoming a popular choice for residential and commercial installations. As compared to conventional string and central solar inverters that are connected to multiple solar modules or panels of a PV system, a microinverter converts DC generated by a single module into AC. Microinverters offer several advantages over conventional inverters. Key among these is that small amounts of shading, debris or snow lines on any one solar module, or even a complete module failure owing to panel-level conversion, do not reduce the output of the entire array. Since microinverters monitor the performance of individual panels, they are suitable for installations that have panels on multiple planes and facing various directions. However, since each inverter needs to be installed adjacent to a panel, installing microinverters entails higher initial equipment cost per peak watt as compared to a central inverter. This also makes their maintenance more difficult, and their replacement costlier. Some manufacturers have attempted to address these issues by deploying panels with in-built microinverters.
With the growing importance of storage systems in solar installations, battery-based inverters have also started gaining traction. These are hybrid inverters that convert DC from batteries into AC at the appropriate voltage and frequency and also supply backup power during a grid outage. They require a battery bank to function and can be used both in off-grid and grid-connected systems. The battery bank is charged by a PV array connected through a charge controller or a battery inverter via AC coupling. Under normal conditions, battery-based inverters export surplus power produced by the PV array. During a grid outage, these inverters automatically disconnect from the grid and supply AC power to the protected load subpanel by drawing energy from the battery bank and the solar array. When the outage is over, the inverter automatically switches back to grid-connected operations and recharges the batteries.
Indian solar inverter market
In India, the use of central inverters is predominant because utility-scale projects dominate the solar industry. In this category, the most common offering so far has been 1 MW inverters. Of late, several companies have started offering bigger inverters with a capacity of 1.8-2.5 MW. While these are currently rated at 1,000 V, most companies are planning to make their new range available in India driven by a global shift towards 1,500 V inverters. The delay in shifting to 1,500 V is largely due to the relatively higher prices of compatible modules and balance of system, which negates any advantage gained from higher efficiency and fewer installation components.
According to BRIDGE TO INDIA, the top 10 inverter suppliers accounted for around 75 per cent of shipments globally in 2015. The Indian market is even more concentrated as the top 10 suppliers accounted for over 85 per cent of shipments. Further, despite the presence of domestic players, India’s solar inverter market is dominated by European and Japanese suppliers such as ABB, Schneider, SMA, TMEIC (a joint venture between Toshiba and Mitsubishi Electric) and Hitachi. This can be attributed to the higher efficiency of inverters produced by international players. As per industry estimates, the efficiency levels of domestically manufactured inverters is 4-5 percentage points lower than those provided by foreign manufacturers.
In 2015, ABB held the largest share in the Indian solar inverters market, accounting for 30 per cent of all installations. ABB was followed by SMA, with a 23 per cent market share, down from 25 per cent in 2014. Meanwhile, Bonfiglioli, Schneider Electric and AEG held 15 per cent, 8 per cent and 4.2 per cent market share, respectively. In the solar rooftop market, Delta Electronics is the market leader, followed by SMA and its China-based subsidiary Zever Solar. European suppliers Kaco and Fronius Solar and domestic suppliers such as Su-Kam and Consul Neowatt are other players in the list of top 10 suppliers in India.
Driven by the government’s target of achieving 100 GW of installed solar power capacity by 2022 and the Make in India initiative, a number of foreign players including ABB, Schneider Electric and Hitachi have established their inverter manufacturing facilities in the country. ABB pioneered the manufacturing of solar inverters in India. Its first manufacturing factory, where its PVS800 series of central inverters are manufactured, was launched in 2012. In September 2016, ABB opened its second manufacturing facility in Bengaluru, doubling its production capacity in the country.
Meanwhile, Bonfiglioli has incorporated Bonfiglioli Renewable Power Conversion India, which has set up an inverter manufacturing unit in Bengaluru. This is the company’s second largest PV inverter manufacturing set-up, after its manufacturing plant in Germany. The company produces 1 MW inverters and has a manufacturing capacity of 300 MW per year. Schneider Electric also has a manufacturing unit in Bengaluru.
Meanwhile, from a taxation point of view, the effective cost of assembling solar inverters in India is slightly higher as compared to direct imports. There is currently a concessional duty of only 5.15 per cent on the import of fully assembled products as against 7 per cent for locally assembled products. This anomaly in favour of imports is likely to be removed after the implementation of the goods and services tax. This will give a further boost to inverter manufacturing in the country.
The way forward
Going forward, as the country progresses with its solar capacity addition targets, the demand for solar inverters is expected to rise at an equivalent rate. There will be demand across all segments, that is, medium-scale, large-scale and ultra mega power projects, as well as rooftop, decentralised and off-grid installations. The launch of microinverters will also foster future growth. Moreover, the Indian market is likely to become less concentrated with several new domestic and international players looking to enter this space.