Solar System Components Continue to MatureBy Cas Biekmann | Wed, 04/06/2022 - 10:53
Drawn to a market that is growing with the shift to photovoltaic solar-based distributed generation (DG), technology manufacturers continue to develop their portfolios to support the burgeoning industry. Besides modules, the role of inverters is growing, along with the integration of hybrid technology, such as battery storage and green hydrogen, for greater efficiency and lower intermittency.
In Mexico, DG installations are 99 percent PV solar. Though other promising technologies such as biomass and cogeneration exist, DG solar remains the most popular. Data from Zumma Energy Consulting shows that by January 2021, the technology represented 1,388MW of installed capacity spread across 165,000 contracts. In 2020, 365MW of capacity was added. Analysts see the commercial and industrial (C&I) segment as the main catalyst for growth, though industry insiders also see considerable opportunity in residential systems.
Compared to the post-2014 Energy Reform boom, 365MW of growth a year might not seem like much compared to the thousands of MWs the long-term energy auctions and subsequent merchant projects brought to the market. But in an environment where a push for regulatory change makes large-scale developments close to impossible, the unregulated DG industry below the 0.5MW threshold becomes more interesting.
“At the moment, DG represents the only hope for the solar market. Many companies that were previously focused on utility-scale projects are looking toward DG to maintain their business,” says Sergio Rodríguez, Service Manager for Mexico and Latin America at Solis. Yet, seeing DG as the only avenue toward profits is too narrow a view considering the technology’s benefits. “In any case, DG is democratizing the energy sector. With current regulation, almost anyone can have access to their own energy,” he says.
The globally growing market provides an opportunity for technology. Besides the solar modules themselves, other core solar system components are necessary. For instance, no solar system could produce serviceable electricity without an inverter, which functions as the brain of the system. Costs for a single inverter can vary depending on the size of the system but are generally above US$1,000. How many are needed mainly depends on the type: a 0.5MW solar system can place over 1,000 panels under one so-called central inverter or use several string inverters instead.
The choice between central or string inverters is not an easy one, since many factors are at play and several voices bring contrasting opinions. “To make monitoring easier, we choose to work with central inverters,” Mauricio Chapa, Managing Director of Tecsolar, says. “While it is true that string inverters are better for fine-tuning, the benefits of clear monitoring outweigh this customization on DG systems. Statistically, central inverters are less likely to fail. This makes sense: more equipment means more issues can pop up,” he adds.
“We developed and launched the new 350KW string inverter together with the medium voltage compartment station because we are seeing more solar and EPC interest in large projects with string inverters,” says César Alor, Country Manager Mexico for FIMER, on the side of string inverters. FIMER joins companies such as Huawei in pushing the more customizable string inverter but has not shut itself off from central inverters. “This allows us to provide the best of both solutions,” Alor says.
The issue between inverter types aside, these crucial components can be developed to add further value to solar systems, whether grid-tied or isolated. “We have also improved the internal quality of our inverters. They can now withstand the grid’s instability,” Rodríguez explains when asked how his company had worked to improve its technology to meet Latin America’s specific challenges. “We also have a low-voltage 60KW large inverter, which means a transformer is no longer necessary. This is particularly useful for Latin American applications in the C&I segment,” Rodríguez says.
After inverters comes battery storage. “Companies can save a great deal of money with a storage system when they shift across the schedule that pertains to Mexico’s tariffs, which feature lower costs at night and higher costs in the late afternoon,” explains Enrique Garduño, Co-Founder and CEO of Skysense. But not everyone agrees that the technology is that helpful considering changes in energy billing. “I do not foresee major growth for storage in the C&I segment. Utilities have changed the way they charge C&I energy users. For instance, a few years ago, end-users were very aware of the benefits of peak-shaving solutions. Now, people do not seem very interested in how storage can achieve this,” says Roberto Moreno, General Manager of Renewable Energy Projects for Solar Power Group. Nevertheless, Moreno adds that he is “quite excited” about the concept itself and that more isolated areas with limited access to the grid can benefit greatly. Especially after the introduction of the Grid Code 2.0, storage’s stability can add further value. “Companies can bring the power factor back to one, as it is a big source of reactive energy or as much as a major factory could need,” Garduño says.
Battery storage itself is relatively straightforward. The real innovation is happening in the software that can trigger such added value. “As any great driver will tell you, having the best car is not enough to win the race. Once the right system design is selected, a smart and efficient software control is crucial for an efficient and trustworthy operation,” wrote Alejandro Fajer, CEO and Co-Founder of Quartux Mexico, for MBN. Another point to consider is how software integrates with hardware. “Customers are getting disjointed offers and there are a lot of false expectations being created. If you do not control the software, it is very difficult to offer performance guarantees in terms of an integrated hardware and software solution,” says David Fernandes, CFO of ON Energy Storage, speaking at Mexico Energy Forum.
Not all companies are putting all their money on battery storage, either, says Vladimir Ruiz, Senior Executive Director for Mexico and Central America at Fronius. “In all honesty, the company does not fully believe in lead- or lithium-based battery storage since they are not considered an optimal solution for the long term, although they can overcome today’s problems of intermittency in solar generation to be fully competitive with other energy sources,” Ruiz says, adding that solar energy itself can do peak shaving or load shifting to a degree. Instead, Fronius considers another up-and-coming technology. “In the past decade, we have been focusing more on green hydrogen,” he says. “We are betting on hydrogen because it is an abundant, potential resource, just like silicon.”