Power-One and Sustainable Energy, suppliers of power conversion electronics, are zeroing in on global PV and storage opportunities
Inverters play a critical role in any photovoltaic (PV) system. Solar panels turn sunlight into direct current (DC) electricity. An inverter turns the variable DC output into utility frequency ‘mains’ alternative current (AC) electricity that is fed to the grid and is used to power household appliances.
Integrating an energy storage system into a PV installation to enable the end-user to consume more of their PV generated energy introduces an additional DC appliance into the system as batteries produce DC electricity. Therefore inverters, arguably, are going to play an increasingly important role in PV and smart energy storage system installations.
Earlier this year Japan’s Panasonic announced a strategic alliance with Power-One, a technological partnership allowing the companies to collaborate to develop, produce and market energy storage systems for residential and non-residential markets worldwide. The systems will combine Power-One’s inverters with Panasonic’s lithium-ion (Li-ion) batteries and battery management electronics.
Through its full acquisition of Sanyo in 2010 Panasonic has consolidated its presence in Li-ion battery production and gained control of a high efficiency PV technology commercialised by Sanyo in the late 1990s, giving it substantial presence in the ‘greentech’ market. In the last two years Panasonic has turned its attention to cultivating residential energy storage opportunities emerging in Japan with its home energy management systems (HEMS), sold through the Sanyo division. In Germany, too, Panasonic has been working with E3/DC, a subsidiary of the utility EWE, which supplies smart energy storage systems based on Li-ion batteries.
By working with Power-One, Panasonic will be able to tap into a global distribution network for stationary storage. Initially both companies are targeting residential, commercial and utility-scale energy storage opportunities in the US and Europe, while developing commercial and utility-scale energy storage markets in Japan. The products are intended for use in conjunction with PV systems for commercial markets and for PV and other renewable energy sources, including wind, at utility scale. The partnership does not extend to the residential energy storage market in Japan.
In Europe, Panasonic and Power-One see a significant opportunity to supply energy storage systems for the emerging residential PV electricity self-consumption market. Germany is the only country in Europe to have introduced an incentive package, specifically designed to encourage adoption. But in the next few years there is significant growth potential across Europe, especially where electricity prices are higher and rising and feed-in tariff (FIT) incentives for PV are going through digressions, as PV electricity reaches grid parity. This is making it more economical for households that invest in PV in conjunction with storage to maximise the amount of self-generated electricity they use and save money on electricity rates for many years.
Regarding the Panasonic alliance, Paolo Casini, VP of marketing at Power-One, says: ‘Whenever it is appropriate, opportunities can be brought to the table by both parties and the best technical solution will be identified together, but the product will be sold by the party who is in the better position in that specific territory or with that specific customer base.’
Smart energy storage systems based on Li-ion batteries are sensitive to charge and discharge profiles, more so than for traditional lead acid batteries, so li-ion batteries are equipped with an on-board proprietary battery management controller which supervises the battery pack’s charge and discharge cycles. ‘To ensure safety and battery longevity the inverter must be designed to the voltage and current values required by the battery and to be capable of communicating with the battery management controller,’ explains Casini.
The partnership will allow the companies to tap into Power-One’s existing distribution channels in various PV markets, from residential up to utility, where the company has established a network of PV system distributors, wholesalers, distributor-installers, and other customers. In Europe Power-One also supplies directly to utilities and project developers for large-scale utility renewable energy plant installations.
Working with Panasonic provides Power-One with access to the Japanese market as, through the strategic alliance, the companies will develop the large-scale commercial and utility PV inverter business. ‘It’s a smart move by Power-One as the Japanese PV market has some of the highest incentive rates and it’s a very difficult market for foreign companies to crack and Power-One has to find new opportunities to grow its customer based beyond Europe,’ observes MJ Shiao, solar analyst at Greentech Media (GTM) Research, and author of the recent report ‘The Global PV Inverter Landscape 2013: Technologies, Markets and Survivors’.
The companies will begin promoting residential energy storage systems from Q2 2013, though it is expected they will enter mass production towards early 2014. Initially Power-One will deploy DC-coupled inverters in its energy storage system.
At the Solarexpo show, held recently in May, Power-One unveiled a prototype of an energy storage system which includes a 4.6 kW single-phase grid connected Power-One inverter and a 2 kWh battery in the standard design, but the idea is that the system can be retrofitted at any time with additional batteries up to 6 kWh of usable capacity. ‘We wanted to offer users an attractive return on investment as well as the possibility to extend their energy storage system with additional storage modules at a later time, so they have the opportunity to further increase the amount of self-consumption,’ explains Casini, based on the expectation that Li-ion battery costs will come down over the next few years. Other suppliers of energy storage systems in Germany, including Varta and Prosol, are also offering modular products that can be fitted with additional battery capacity over the system’s lifetime.
Power-One’s customer base for energy storage systems is mainly the same one it has today. ‘We sell through distributors and installers for the residential and small to medium size commercial markets. For the utility segment we sell primarily to project developers and engineering, procurement and construction (EPC) companies,’ says Casini. He adds that the recent merger between ABB and Power-One will not affect the alliance with Panasonic.
The self-consumption trend opens up new opportunities for the solar industry, to supply PV and energy storage systems, or to retrofit energy storage systems within existing PV installations. But, distributors and installers will need to work with consumers to calculate their electricity load and usage habits to ensure that these customers fully benefit from their PV and energy storage systems over the long-term. This means that in the coming months Power-One will be working with its partners in its existing PV distribution channels to come up with sales strategies and tools for its new storage and related products designed to increase PV self-consumption.
Sustainable Energy partners with Prosol
Energy storage opportunities are not only for Power-One, SMA and big league inverter brands. Canada’s Sustainable Energy Technologies originally developed an inverter for small combined heat and power fuel cell modules, for German utility RWE. But, when the stationary fuel cell market failed to take off, as initially anticipated, Sustainable Energy turned its attention to developing inverters for solar PV. The low voltage electronics help achieve lowest cost per kWh and increase energy harvesting from a PV array by 5-15% compared with conventional high voltage inverters.
However, Sustainable Energy’s market share is comparably modest, so in 2011 the company began looking for opportunities in PV storage, exploiting its original inverter technology, since fuel cell inverters have similar voltage and current characteristics as battery system inverters.
Shiao says: ‘It’s still early days for energy storage. The battery storage economics are just not quite there yet. So a lot of the large inverter companies are testing the market with inverters and systems for these applications ahead of rolling any new products out. Sustainable Energy is getting into this market ahead of the pack.’
Gaining accreditation globally
Sustainable Energy has several customer deals in place and has gained accreditation for its inverter in the US as well as Europe and is going through this process in Japan. In Germany the company is supplying its inverters for integration into a battery-based energy management system produced by Prosol, which has been supplying energy storage systems since 2010.
Prosol’s second generation Sonnenbatterie smart storage system uses advanced Li-ion batteries, based on lithium iron phosphate chemistry, and includes a smart home interface, smart meter and solar PV monitoring.
Sustainable Energy’s bidirectional technology can achieve 5% higher efficiencies for AC-coupled battery systems than competitors. The low voltage inverter design matches the input voltages of Li-ion and lead-acid batteries, allowing charging and discharging without the need for bidirectional DC/DC conversion devices. The inverters can also accommodate DC-coupled battery systems.
By making power electronics that can be supplied under an OEM model, the company’s systems are open to industry standard controls protocols and easily connected into different energy storage and management systems. Integrators can test different battery systems with the inverters.
‘The goal has been to make the system easy for the customer who delivers the product to the market. Having talked to some PV companies earlier on several liked the technology but wanted us to provide an energy storage and management system, but this is not the business model we are pursuing,’ says Sustainable Energy’s CEO Michael Carten. A strong IP position, around the software especially, allows the company to supply its technology to different customers for integration into their systems while ensuring clear delineation between each other’s proprietary technology.
The deal with Prosol expands the energy storage system range offered by RWE Efficiency, a subsidiary of the German utility, which already supplies a modular storage system from Varta Storage for smaller households. Prosol’s Sonnenbatterie system can be used with large sized PV systems and RWE Efficiency is targeting small commercial end-users, as well as domestic end-users, with Prosol’s offering. RWE Efficiency quotes the price of the basic system, with a 4.6 kWh storage capacity, at EUR11,500 plus VAT and installation costs.
Carten reports that a pipeline of demand is looking positive and is expecting to supply several thousand units in the next 12 months into Germany. Japan is a promising market and Carten believes it could surpass Germany as early as 2014. Energy security has become increasingly important to the country and energy storage systems in conjunction with PV can provide back-up power and operate independently if there is a grid failure. Prosol’s other customers and OEM partners include Kyocera and E.ON. Japan-headquartered Kyocera has European operations and is promoting the Sonnenbatterie as compatible with its PV panels, which are sold in Germany and other European markets.
However, Sustainable Energy is also waiting for its PV inverter to receive certification by Japan Electrical Safety & Environment Technology Laboratories (JET). Successful JET certification could make it the only low voltage – meaning battery-compatible – inverter certified in the country. At present, it is not possible to certify an inverter for battery applications in Japan, only complete battery systems including inverter, explains Sustainable Energy CTO Brent Harris. ‘The fact that we are using the exact same electronics for batteries and PV will give us a pretty good advantage as no-one else will be able to claim that their inverter platform is already demonstrated to meet JET requirements and, I think it goes without saying, it’s pretty important to have some kind of leg-up going into the Japanese market with foreign electronics,’ observes Harris. Sustainable Energy has learned this from its history with fuel cells in Japan, when it became one of a very few foreign inverter makers to receive utility approval for grid connection of fuel cells back in 2003 to 2005.
Sustainable Energy’s technology has further applications including off-grid, where PV and storage can be more cost-effective than diesel generation for providing back-up power, though it sounds as though the grid-tied PV self-consumption market deal with Prosol, as well as its plans for Japan, could keep the company busy for some time yet.