Smart modules—essentially solar panels with “smart,” module-level power electronics—have seen a slow rise in popularity. But that could change fairly quickly, according to GTM Research, which is predicting shipments of smart modules and related AC modules (panels with pre-installed microinverters) to grow from 73 MW in 2014 to 1 GW in 2020, an almost 14-fold increase. What’s fueling this growth?
What is a smart module?
These intelligent packages have grown from being just panels equipped with power optimizers. Today’s good smart modules involve any type of module-level electronics with functions like remote monitoring, module-level shutdown, voltage limiting, increasing power harvest and more.
“The way we think of smart modules is anything that has something built into it that does more than just sit there and generate power from the sun,” said Parjanya Rijal of Trina Solar, which has its own smart module: Trinasmart.
Many of the top module manufacturers have a smart line, including JA Solar, Jinko Solar, Canadian Solar, Upsolar and Trina Solar. Most have partnered with optimizer manufacturers Tigo Energy or SolarEdge to obtain that smart advantage. ET Solar has its Cell Optimizer Module, which includes an integrated power regulator on each cell-string within the solar module (no external power optimizer is needed).
“Smart modules are something where it differentiates a module,” Rijal said. “In an industry where basic solar modules used to use bankability to differentiate, there’s more and more companies that claim that. This is a way to continue to innovate and be different from all the manufacturers out there.”
Power optimizers are still the dominant add-on for smart modules, said Lior Handelsman, founder and vice president of marketing and product strategy for SolarEdge.
“With system owners demanding more from their PV systems and installers demanding more in terms of installation efficiency, module manufactures can better satisfy the current market requirements by embedding power optimizers,” he said.
What has prevented growth, and why is that changing?
There is an obvious price difference between traditional modules and the smart variety. With added monitoring and hardware comes added costs, and the potential for added import taxes. As the market matures, GTM Research expects product markups to fall.
“Many module manufacturers were paying import tariffs on their finished goods. Integrating power optimizers into the modules meant that they also had to pay tariffs on the power optimizer, thus raising the cost,” Handelsman said. “This offsets the value of integration. We are starting to see more strategies from module manufacturers that limit the impact of the import tariff, meaning that these integrated products are starting to drive cost reduction for installers.”
There have also been some hiccups in relaying to end-users the real benefits smart modules can bring. People who thought solar couldn’t work on their houses because of huge oak trees casting shade now have real generation capability with smart modules.
“People will see that these technologies work, there will be a longer track record of increasing your energy production, a track record of them working properly,” Rijal said. “On the cost side, we’re moving along the learning curve—lower cost both because of learning how to do that better and increasing volume.”
Some code changes will also bump up smart module adoption. The 2017 NEC updates effectively require module-level shutdown, which then essentially forces installers to use module-level power electronics to reduce voltages. Opinions are mixed on the safety issues considered with the new code standards, but it does appear that smart modules will become necessary commonplace on new rooftop installations.
“Regulations like NEC 2014 rapid shutdown are driving installers and first responders to improve PV safety,” Handelsman said. “Solutions like integrated power optimizers allow module manufacturers to offer a solution that will address these safety concerns out of the box without the need for additional equipment or costs.”
Tigo’s power optimizer can make solar panels “smart.”
It’s also likely that other industry requirements could spark the rise in smart module popularity.
“We particularly see our module integrated solution as a platform for not just the technology that’s available now—like rapid shutdown, longer strings, monitoring—but a way to kind of future-proof our systems,” Rijal said. “It’s a platform that you can integrate whatever technology that comes out in a few years, as well.”
Bottom line: Now is an ideal time in the market for smart modules.
“Cost reduction for the installer is a constant battle. Since the integrated modules can reduce hardware costs and decrease installation times, they have the potential to drive costs down,” Handelsman said. “At the same time, smart modules also have the potential to create differentiation for module manufacturers in a highly commoditized and competitive market. An intersection of cost reduction and differentiation creates a highly attractive environment for smart modules going forward.”