SILICON VALLEY — Japanese solar panel makers have for the most part focused on high-quality products that are more durable than those of their overseas rivals. The result of this has so far been strong brand images that have proven successful in the Japanese market. But this may soon change.
The so-called smart panel, developed by Silicon Valley venture Tigo Energy, is coming to Japan, and it is not coming from Japanese companies.
The Chinese company Trina Solar plans to use this technology in its price-competitive products in Japan. Japanese panel makers are finally taking notice. The fear is that Trina will this year use the new technology to undercut Japanese makers in both performance and cost, and do it on their home turf.
Trina is the world’s second-biggest photovoltaic panel maker. It has been on an overseas expansion drive that emphasizes the advantages of its smart panels.
Attached on the backside of a smart solar panel as a module, which is a small device with an on-off switch and a sensor. The module is in effect the panel’s brain. As multiple panels are hooked up to generate solar power, even one poorly performing panel can affect and reduce the output of an entire panel system. The modules continuously monitor the performance levels of the panels and can automatically switch off an unstable output panel. Trina’s panels do this with a proprietary remote-control technology.
This means that small differences in the level of panel performance among different makers are no longer so significant. This leveled playing field benefits high-volume, lower-quality Chinese panel makers.
In 2007, a group of entrepreneurs, including a former Intel executive vice president, founded Tigo Energy as a start-up. The device they developed is priced about $40 each. The company said it has already shipped more than 1 million module units to a number of panel makers, including Trina Solar and SunPower of the U.S. The costs savings resulting from the use of these solar modules at solar farms quickly make up for the initial costs.
The system also allows Tigo to collect an enormous volume of data on electric currents, voltages, climate conditions and other factors. It uses this information to offer consulting services and also sell this data to its customers. The data can clearly show how much output a given maker’s panel can generate under certain weather conditions, for instance. The new system is already being touted by some in the industry as a key tool for future smart grids.
Tigo Chairman Zvi Alon says that smart panels are similar to smartphones in that people cannot imagine going back to the old technologies once they make the transition. The company expects a 50% jump in orders over the coming fiscal year compared with the previous fiscal year. Alon is also aiming to eventually go the company public.
Not seeing the light
Though Trina Solar has the advantage in terms of cost and innovative technology in its attempt to work with Japanese makers, Alon said that negotiations with them are not making much progress. Japanese manufacturers have shown a tendency to be slower at embracing the new technology than overseas competitors.
“We can make sizable profits in our home market, so we’re not motivated enough to go and try in overseas markets where they use different specifications,” said an official in charge of solar power generation at one Japanese electricity producer.
Japan’s New Energy and Industrial Technology Development Organization has been conducting Japan-U.S. joint experiment projects in the U.S. as part of its efforts to push Japan’s smart grid-related technologies. Nevertheless, participating Japanese makers have yet to station their sales and marketing staff there.
Too often, these companies are still caught up with their single-minded focus on making hardware and put no energy on establishing international standards. This stubbornness is reminiscent of the failure of Japanese tech companies to swiftly embrace smartphone production — the problem back then was an over-reliance on Japan’s telecommunications firms.
Tom Bialek, principal investigator of San Diego Gas & Electric, which has a proven track record in solar power generation, noted that because Japanese makers sell high-end products, there is little room to explore variations to their products.