In-depth research on the micro-inverter industry

In-depth Research on the Micro-inverter Industry

Taking the distributed wind: domestic micro-inverters set sail for the future think tank

1. Micro-inverse: improve power generation efficiency and completely solve fire hazards

a. Micro-inverter: first introduced by the American company Enphase

The micro-inverter was first launched by the American company Enphase: In 2009, Enphase launched the micro-inverter for industrialized commercial applications. The micro-inverter is to connect the inverter directly with the photovoltaic modules, each module is connected in parallel, each module can work at the maximum power point, and the single capacity is generally below 5KW.

Higher overall system efficiency and greater power generation: The PV power output of a centralized or string inverter is limited by the power of a single module. Microinverters can achieve maximum power point tracking (MPPT) at the component level, which maximizes the overall output power by optimizing the output power of each module.

b. High safety, can completely solve the fire caused by high-voltage arcing

Risks of photovoltaic power generation systems: operation and maintenance electric shock risk, fire risk and rescue risk. The DC voltage of the centralized or string inverter system can reach 600-1500V, while the micro-inverter is connected to the grid in parallel, and the DC voltage generally does not exceed 80V, which completely solves the fire caused by high-voltage arcing.

Component-level products mainly include micro-inverters, switch-offs and optimizers: the string-type + switch-off/optimizer solution only solves the problems of electric shock and rescue, but does not completely eliminate fire hazards. Micro-inverters rely on low-voltage connection The integrated features completely eliminate the risk of electric shock, fire and rescue.

c. Microinverter penetration on the rise

Micro-reverse osmosis rates rise in global module-level equipment (MLPE) due to lower costs. In the market where the existing mature string inverters need to achieve component-level shutdown requirements, the "string inverter + shutdown" solution has a certain cost-effectiveness advantage, and the "string + shutdown" solution, which is mainly suitable for application scenarios with relatively large power. The micro-inverter solution has better safety and has a cost-effective advantage in medium and small power application scenarios.

Driven by policies, the penetration rate of U.S. household photovoltaic MPLE manufacturers has increased year by year. In 2020, the combined penetration rate of Enphase and Solaredge exceeded 90%.

d. Europe and the United States are the most important markets for micro-inverse, and shipments in Latin America grow rapidly

Global inverter shipments have grown rapidly: In 2020, global inverter shipments will be 185GW, a year-on-year increase of 43%, and the inverter market has reached US$7.19 billion. The shipment volume of micro-inverters was 2.28GW, accounting for 1.2%, and the market size had reached US$741 million, accounting for 10.3%.

North America and Europe are the two most important markets for micro-inverters: during 2016-2020, the combined shipments of micro-inverters in North America and Europe accounted for more than 80%, and the shipments of micro-inverters in Latin America Rapid increase, accounting for 8% in 2020.

2. Driven by both distributed proportion and penetration rate, the micro-inverse market is expected to usher in an explosion

Micro-reverse market space = distributed market * micro-reverse penetration rate

The development of the distributed market and the increase in the penetration rate of the micro-reverse market together determine the market space of the micro-reverse market. In recent years, the newly installed capacity of global distributed photovoltaics and the penetration rate of micro-inverters have increased, and the micro-reverse penetration rate will reach 5.01% in 2020.

In the future, there will still be a market pattern of co-development of centralized and distributed systems: as the advantages of distributed photovoltaic power generation are gradually brought into play, distributed markets such as China, Brazil, and India will grow rapidly, and the distributed markets in Europe and the United States will maintain stable growth.

China Distributed Benefit from "Countywide Promotion" and "Rural Revitalization"

The proportion of new distributed installed capacity in China has exceeded 50%: In recent years, the proportion of new distributed installed capacity in China has increased rapidly, reaching 55% in 2021. The development trend of both centralized and distributed photovoltaic power generation is obvious.

The proportion of distributed installed capacity in China will further increase: with the release of favorable policies and measures such as the promotion of the whole county, the development of public green buildings, rural revitalization, the time-of-use electricity price mechanism, relevant local policies, and the entry of state-owned enterprises into the market, we expect that in 2025, distributed The newly installed capacity will reach 75GW.

China's newly installed photovoltaic capacity is the highest, and Europe maintains 50% of the newly added distributed share

China's newly installed photovoltaic capacity is the highest, far exceeding other regions, followed by the United States and Europe. In Latin America, mainly Brazil, new photovoltaics maintained a high growth rate. The proportion of newly distributed distribution in Japan remains above 40%, and the proportion of distributed distribution in India is relatively low.

Australia's distributed share exceeds 70%, and Europe maintains 50% of the newly added distributed share: Australia's solar energy resources are high-quality, and the distributed share is the highest. The European market is relatively mature and the policies of various countries are favorable. It is expected that the distributed distribution will maintain stable growth in the future.

Safety standards are improved, and component-level products are expected to usher in explosive growth

Countries around the world have raised safety requirements: the US NEC safety standards are updated every three years, requiring "component-level shutdown", Australia has increased the shutdown requirements, and EU legislation has set the maximum voltage after shutdown.

Safety improvement combined with BIPV development to jointly help domestic module-level products: The latest green building policy will also help the development of building-integrated photovoltaics (BIPV). After the release of the results of the Distributed Photovoltaic Safety Consultation Draft, domestic module-level products will usher in explosive growth.

The Russian-Ukrainian war led to the energy crisis, and the price of electricity in Europe soared

Europe accelerates new energy replacement, aiming to get rid of Russia's import restrictions: the European Union has repeatedly increased the planned photovoltaic installed capacity, Germany plans to achieve 100% renewable energy power generation 15 years ahead of schedule, the United Kingdom plans to greatly increase the photovoltaic installed capacity, and the photovoltaic industry in Spain and France has benefited from assistance. plan.

Overseas orders for domestic component products: In the first quarter of 2022, component-level products will explode in overseas markets. Electricity prices in Europe have risen by 300%, stimulating a sharp increase in photovoltaic demand. There is a strong willingness to install photovoltaic + energy storage systems on the household side, and the market prospect is broad.

Distributed photovoltaics are rising steadily, and the micro-inverse market is expanding rapidly

It is estimated that in 2025, the new installed capacity of photovoltaics in the world will reach 507GW, with distributed accounting for 50%. The CAGR of new installed capacity of photovoltaics in the world from 2020 to 2025 is 29.73%. The global distributed photovoltaic market is steadily rising, which will continue to drive the development of the micro-inverter market.

It is estimated that the market size of micro-inverters will reach 32.5 billion yuan in 2025, the CAGR will be 47.22% in 2020-2025, and the shipment will reach 38GW. As technology matures, costs drop, and safety regulations become stricter, the market size of micro-inverters will further increase.

It is expected that in 2025, Europe and the United States will still be the most important markets for global micro-inversion

It is estimated that the U.S. micro-reverse market will account for 41.53% of the global market in 2025, with a market size of 13.4 billion yuan: the European micro-reverse market is mature, the distribution ratio and micro-reverse penetration rate are higher than the global average, and the European energy crisis awareness under the disturbance of war Strengthening, the micro-inverse market size is expected to increase significantly.

Brazil has the fastest growth in distributed photovoltaics: Brazil's latest net metering law will greatly promote the development of distributed photovoltaics. China's distributed new installed capacity is the largest, and with the further improvement of domestic safety regulations, it will become the largest potential market for micro-inverse. (Report source: Future Think Tank)

3. Actively expand overseas channels, when domestic micro-reverse exports are replaced

1. Products: There are many types of domestic micro inverters, wide power coverage and high power density

The power density of various types of products in China is generally higher than that of foreign countries: power density is a core technical indicator reflecting the design capability of inverters, and high power density means more efficient power conversion, lower raw material costs and more convenient installation.

The domestic micro-inverter products are complete and the power range is wide, providing customers with more choices: households account for a large proportion of low-power rooftop photovoltaic projects in the United States. Currently, one-to-one and one-to-two products are the main products. . Among the comparable product models, the Hemai one-to-four micro-inverter has a better efficiency level in the full power range.

2. R&D: Overseas manufacturers have a high proportion of R&D investment

The number of patents and R&D investment of overseas manufacturers are higher than those of domestic manufacturers: Enphase and Solaredge have high patent barriers, and the proportion of R&D investment is higher than that of domestic manufacturers. About 48% of the R&D personnel of Yuneng Company, and 28% of other companies.

The gap between Enphase and Solaredge is shrinking: As the leader of micro-inverter, string + optimization, Enphase and Solaredge still occupy an absolute market share. In 2021, Enphase's operating income is 8.8 billion yuan, a year-on-year increase of 65%, and Solaredge's 12.5 billion yuan is a year-on-year increase of 24%.

3. Gross profit: Hemai has a leading gross profit margin

The impact of sales area on gross profit margin: Yuneng's market share in the US is 10-20% higher than that of Hemai, and the gross profit margin in overseas markets is lower than Hemai's 15%. Moreover, it faces great competition pressure from Enphase, and its product pricing is lower than that of Enphase. Get higher gross profit.

The impact of power density on gross profit margin: The power density of Hemai's comparable products of the same type is 100-300W/L higher than that of Yuneng, which means that Hemai uses less raw materials, but with the replacement of Yuneng's high-current micro-inverter new products, it can match high power components, the difference in gross profit margin will be further narrowed.

4. Market channels: Enphase and Solaredge mainly focus on European and American markets

Enphase's global micro-reverse market share exceeds 50%: In 2020, Enphase's micro-reverse market share ranks first in the world, and Yuneng Technology ranks second, both ranking first among domestic manufacturers. In 2021, Enphase's revenue in the United States will account for 80%, and Solaredge's revenue in Europe and the United States will account for 85%.

Domestic manufacturers will gradually enter the European and American markets: North America is the largest application market for Micro Inverse, with shipments accounting for about 70% of the world. Domestic manufacturers give priority to emerging markets in Latin America, and will gradually seize market share in Europe and the United States in the future.

5. Business model: expand business territory and provide comprehensive energy services

Provide complete residential solar energy solutions: Enphase and Solaredge have acquired a number of companies in recent years to provide comprehensive support for their development of energy solutions. The company continues to expand its product range, launching home energy platforms, connected electric vehicles, solar storage, smart meters and home appliances.

Innovative and forward-looking move: SolarEdge develops virtual power plant software compatible with all companies' inverter technologies. Enphase has established several strategic partnerships to expand its AC module business, including Sunrun, Sunpower, LG, Panasonic, etc.

4. Investment analysis: Taking advantage of the distributed wind, domestic micro-reverses set sail

4.1 Hemai: Development History

Hemai Co., Ltd. is a national high-tech enterprise engaged in the research and development, manufacturing and sales of photovoltaic inverters and other power conversion equipment and electrical complete sets of equipment and related products. Among them, photovoltaic inverters and related products mainly include micro-inverters and monitoring equipment, Modular inverters and other power conversion equipment, distributed photovoltaic power generation systems, electrical complete sets of equipment and related products mainly include high-voltage switchgear, low-voltage switchgear, power distribution cabinets, etc. The products are widely used in the field of global distributed photovoltaic power generation systems. Hemai has mature and reliable technology, professional and progressive team, and is committed to empowering owners and professionals. The founders Yang Bo and Zhao Yi graduated from Zhejiang University majoring in power electronics with doctorate degrees.

4.2 Yuneng Technology: Development History

Yunneng Technology Co., Ltd. was established in 2010. It is a technology-based enterprise founded by a team of returnees and private capital. The company focuses on the R&D and industrialization of MLPE component-level power electronics. Its products include micro-inverters, intelligent control circuit breakers, power optimizers, EMA intelligent monitoring and operation and maintenance platforms and photovoltaic system solutions. Since 2011, it has continued to make efforts to deploy globally, and successively established branches and subsidiaries in major international photovoltaic application markets such as the United States, Australia, France, the Netherlands, and Mexico, forming a global sales and service network, ranking the world's second largest micro inverter appliance product supplier.

4.3  Deye Shares: Development History

Ningbo Deye Technology Co., Ltd. is a large-scale manufacturing technology enterprise integrating R&D, design, production, sales and service. At present, it owns four major categories: solar inverter system, frequency conversion control system, environmental electrical appliance series, and heat exchanger series. core industry chain. The company's main business development stage. From 2000 to 2006: the company mainly engaged in injection molding parts, molds, sheet metal parts and other products, provided product matching for Midea, Great Wall Motors and other customers, and produced environmental electrical products such as dehumidifiers in small batches. Since 2007, it has started to produce heat exchangers for household air conditioners for Midea. In the same year, its subsidiary, Deye Inverter, was established, and the company's business began to involve the field of circuit control. In 2015, the company carried out business adjustment and determined three major development lines: heat exchanger series, circuit control series and environmental electrical appliance series.