Inverter development-photovoltaic plus energy storage business
The inverters currently on the market mainly refer to photovoltaic inverters used in photovoltaic power generation systems, as well as energy storage inverters used in stored energy systems.
Introduction of photovoltaic inverter
● Brief introduction
PV inverters are key equipment for connecting PV systems to the grid, ensuring the long-term reliable operation of power stations and improving project return on investment. The basic function of the inverter is to convert the direct current output of the photovoltaic cell into alternating current.
The inverter is also responsible for intelligent control of the entire photovoltaic system. As the main intelligent equipment in the current photovoltaic system, it also has the maximum power point tracking (MPPT) function to improve the power generation efficiency of the system, and monitor, adjust and protect the system status.
● Four types
Centralized, serial, distributed and micro-inverters. The main difference between these four categories is the individual capacity of the inverter and the number of PV modules directly connected to the inverter.
String inverters occupy a larger share of the global market. In the traditional concept, the string inverter has a small stand-alone capacity, which is suitable for residential and industrial and commercial distributed photovoltaic systems.
Distributed and microinverters account for a smaller market share. The centralized inverter has a large stand-alone capacity and is suitable for scenarios of large-scale photovoltaic power plants.
The development of the energy storage business
● The allocation of energy storage is an important trend in new energy generation.
With the increase in the proportion of photovoltaic and wind power generation, their inherent defects have become more and more obvious. In future new energy power generation projects, it has basically become a consensus in the industry to improve the quality of electricity consumption. Inverter manufacturers have also launched energy storage products to capture emerging market share.
● The energy storage system and the grid must be connected by an energy storage converter.
Energy storage converter, used in household stored energy. However, when it’s used in the field of large-scale industrial and commercial field, is generally called PCS (Power Conversion System). The PCS is connected between the energy storage battery and the power grid to achieve two-way conversion of electric energy.
The energy storage converter can convert the direct current in the energy battery storage into alternating current . It is also possible to rectify the alternating current in the grid into direct current to charge the battery energy storage system. PV inverter manufacturers have a competitive advantage in the new track.
● The role of energy storage converters in energy storage systems is similar to the photovoltaic.
The technology between them is similar, and it is mainly for the switching of production processes, which is a low barrier to entry for inverter manufacturers.
● The two main customers are connected.
The sales channels and brand reputation previously built by inverter manufacturers are still valid. For existing customers, when there is a demand to install energy storage converters, they will also tend to choose the same brand as PV inverters to obtain more convenient after-sales service.
Energy storage business industry characteristics
● Brand building
The investment cost of producing equipment is low, and per capita output is high. In 2020, the investment cost of inverter production equipment per unit capacity is 60,000 RMB/MW, which is a low level in the photovoltaic industry chain.
Channel and brand building are the main barriers to business development. Hence the cost of the inverter only accounts for about 8%-10% of the entire photovoltaic system. If the failure causes the system to be paralyzed in a large area, customers will tend to choose a leading brand with rich industry application experience and a good market reputation. Moreover, after customers accept a brand, they will tend to establish long-term, stable cooperative relationships and high loyalty.
● Channel building
In the past decade, dozens of inverter companies have successively withdrawn from the PV inverter business. The products left by the withdrawal brand have become a huge problem for owners when they need to be repaired.
The circuit design of each manufacturer is different, and it is difficult to repair between different brands. Therefore, owners will consider the efficiency and quality of after-sales service as an important factor.The distributed photovoltaic market is for home energy storage users or scattered industrial and commercial owners, with strong To C attributes.
● Market building
Product upgrades fast, and manufacturers need to respond quickly to the demand. With the increasing proportion of photovoltaic power generation in the power system, the grid terminal requires the inverter to meet the requirements.
The household side needs inverters to improve the degree of intelligence and provide data support for the intelligent operation .
The module needs the inverter to adjust the electrical parameters in time to adapt to the electrical characteristics of the new module. As a result, new requirements for inverter products are constantly being put forward, requiring manufacturers respond in a timely manner.
PV inverter vs energy storage inverter
- The biggest difference is that the photovoltaic inverter can only convert direct current into alternating current in one direction, while the energy storage converter is bidirectional, with energy control in two directions: charging and discharging.
- The self-consumption rate of traditional photovoltaic inverters is only 20%, while the self-consumption rate of PCS is as high as 80%.
- In the event of a power failure, the inverter connected to the photovoltaic grid is paralyzed, and the PCS can still work efficiently.
- In the context of the continuous reduction of subsidies for grid-connected power generation, the income of PCS is higher than that of photovoltaic inverters.
The market for inverters
The PV market is developing very well. In terms of market structure, the shipments of PV inverter suppliers in the world have increased significantly.
At present, string inverters are the mainstream, and mainly large strings, combined with the needs of industrial and commercial and ground power stations.
In the U.S. market, Sungrow is number one. In European, the string inverters that do the best are Huawei. And in China, microinverters are growing rapidly.
In general, the current development trend for inverter companies is very good. Coupled with the current energy market tension, the public’s willingness to buy photovoltaic and storage of energy has increased significantly. More and more countries and cities have launched corresponding policies, and the development space of the photovoltaic market in the next few years is very large.