ArrayPower's CEO talks integrated AC modules and solar survival strategies

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ArrayPower was set up in 2008, in California’s Silicon Valley, with the aim of creating a cost-optimized inverter that could be fully integrated into photovoltaic modules. Led by Wendy Arienzo, who has 30 years of technical and management experience in the semiconductor industry behind her, the company is gearing up to roll out its first sequenced inverter-equipped product line in 2012. There are also ambitious plans to produce over one million units a year in 2013.

How are integrated AC modules different from traditional modules that use microinverters?

Integrated AC modules are distinct from traditional microinverters in several ways, the most basic difference being that microinverters are installed by solar integrators separately from the modules, while AC modules package the module and the inverter together during the manufacturing process, and thus are installed as a single component.

Another difference is that integrated AC modules offer savings across the entire solar system, both upstream and downstream. In terms of upstream savings, AC modules eliminate redundant parts and thus reduce module cost. The fact that the AC conversion is distributed across the array allows for reduced inverter costs. In terms of downstream savings, AC modules lead to faster and easier installation, reducing installation and maintenance expenses. The end-user is also dealing with one party during the acquisition process, meaning faster transaction times and lowered costs.

Though these are the basic differences between AC modules and traditional microinverter-module setups, not all AC modules use the same inverter technology, nor achieve the same level of integration. Our technology reaches a deeper level of integration than those of our competitors.

How has ArrayPower achieved this?

There are several companies that offer AC module inverter technologies, but no other technology reaches as deep a level of integration as the Sequenced Inverter.

Our inverter is truly integrated into the solar module, and can be considered a part of the module, from both an installer and a manufacturer perspective. Competing products require the integrator to install each microinverter to racking hardware and to connect the DC cables from the module to the microinverter cable set. Sequenced Inverter-equipped AC modules do not require these additional costly steps.

In addition to the physical integration, by optimizing at the cellular level, our technology allows for improved performance and reliability. Other inverter technologies are optimized at the modular level, and it will take a while before they are able to optimize at the same level as the Sequenced Inverter.

An analogy for the difference in integration depth would be the CD-ROM drive. The original CD-ROM drives were separate from the desktop computer, requiring wiring to connect. Today, however, many CD-ROM drives are integrated with the desktop, allowing for the elimination of wiring and external hardware as well as improved performance. The Sequenced Inverter is similar these contemporary CD-ROM drives.

Has ArrayPower undertaken any industry collaborations?

We have signed a multi-year supply agreement with a top 10 global solar manufacturer, who will integrate our technology into a new product line of solar modules that specifically targets the commercial market. Our partner announced this product line at the Solar Power International Conference in Dallas, Texas in October of this year.

We have also partnered with several organizations to conduct field trials of the Sequenced Inverter. We are working with the Fraunhofer Institute to conduct a field trial near Frankfurt, Germany; with PV Evolution Labs on a field trial in Davis, California; and with TÜV on a field trial in San Jose, California. These three solar systems and one on the roof of our headquarters in Sunnyvale, California, total 60 kilowatts of installed solar equipped with Sequenced Inverter technology.

How much do the inverters cost to produce? How do they compare to the costs of traditional inverters and microinverters?

Our radically different approach to solar inversion enables a simple and reliable inverter design. The Sequenced Inverter has no moving parts and no known wear-out devices like electrolytic capacitors. It is a single board design that uses only components that are proven for long life. The simple design allows for a price comparable to string inverters, which is substantially lower than the current price of microinverters.

On a commercial scale, the Sequenced Inverter offers significant cost savings when compared to conventional- or microinverter-equipped solar systems. Compared to a commercial-scale solar system using conventional inverter technology (string or central), the Sequenced Inverter offers a minimum of 10 percent balance-of-system cost savings over the lifetime of that system, primarily from decreased equipment costs and installation/maintenance costs.

At what capacity are ArrayPower’s inverters produced at?

We have engaged one of the world’s largest contract manufacturers with considerable experience in manufacturing power optimization technologies. Our capital-efficient "fabless" approach allows us to rapidly add capacity to meet the needs of our solar manufacturing partners.

Where are they produced?

Our inverters will be manufactured in Asia, and shipped to our module manufacturing partners to be packaged with the solar module during the manufacturing process.

How are they produced?

Because we draw on the semi-conductor industry, we offer a fabless approach, in which we engage with expert contract manufacturers to produce the Sequenced Inverter technology. Our product has a simple, one-board design that requires no special equipment. The manufacturing process is similar to that of a typical printed circuit board.

We use industrial-grade components that are derated (using components that exceed the quality required to perform at a high level) to ensure the longevity of the product, thus allowing us to guarantee the Sequenced Inverter for a minimum of 25 years. Our product is robust, and achieves automotive quality standards, which are deemed to be among the most stringent in the manufacturing industry.

Which markets are they available in?

Our manufacturing partner will roll out the Sequenced Inverter-equipped product line near the end of Q1 2012. The first rollout will be for the North American market. The next phase is a mid-2012 rollout for the European market, with the aim of bringing the product to market in Asia in 2013.

Does the company have plans to ramp up in 2012?

Our primary objective for 2012 is to engage more solar manufacturing partners who will incorporate our inverter technology into their solar modules. As of now, we have one top 10 manufacturer, and we hope to increase that number by the end of 2012. We also want to ramp up production. Our current goal is to have a run rate of more than one million units a year in 2013.

How has ArrayPower been affected by the turbulent photovoltaic market this year?

Because we bring value and savings to our partners and customers, the turbulence in the photovoltaic market highlights our value proposition; in a highly competitive market, our product becomes even more attractive.

We have received strong interest from module manufacturers in our product, because we offer a superior technology at an affordable price. Consequently, the turbulence of the past year has only increased the value of our Sequenced Inverter.

How does the company expect the 2012 solar market to play out?

The first half of 2012 will be challenging for the industry. Europe’s economic problems have relegated renewable energy initiatives to the back burner, while the dumping issue with China will continue to cause unease in the solar industry.

As these issues become resolved and the dust settles, the second half of 2012 should see growth in the solar market, continuing into 2013. The rockiness of Q1 and Q2 should play to our competitive strengths, and we think we will be strongly positioned to benefit as the market improves in the latter half of 2012.

What are the company’s top survival tips in such a competitive market place?

The main survival tips are maintaining a focus on our core competence, showing true grit, staying close to our customers and building on our already-strong investor base. Our core competence – what our technology and our team is built around – is power electronics, and for a company to succeed in this industry it must maintain its focus on what it does best. The industry is also not for the faint of heart, and to survive the coming year, the leadership must remain strong and must be prepared to seize opportunities when they present themselves.

To be successful, a company must always stay close to the customers and make sure that it meets their ever-changing needs. And finally, the foundation of a successful company lies in strong investors who are in it for the long haul.