What is an inverter and why do I need one?

Shopping for a solar panel system means considering several factors -- one of which is the decision to use either one or more central inverters or a number of micro-inverters. The first question to consider is what does an inverter do? Solar panels convert sunlight into direct current (DC) electricity with a relatively low voltage of 12-17 volts. However, your lights and other appliances use alternating current (AC) electricity at a much higher voltage (130 volts for North America, 220-230 volts for Europe, Australia and many other countries around the world). Thus, we need a device to step-up the voltage and convert the power from DC to AC: this is where the inverter comes in. An inverter also increases the safety of a solar energy system by making it possible to switch off the connection to the panels and/or the connection to the grid (when the inverter needs to be serviced for example). If solar is new to you, then consider checking out Sunmetrix Discover to learn more about what solar energy can do for you where you live.

Meet the contenders: Central vs. Micro

Enphase M215 and Solar Panel

An Enphase micro-inverter (photo credit: Enphase Energy)

There are two types of inverters on the market: central inverters and micro-inverters. Central inverters, also called string inverters, connect a string of photovoltaic panels and convert the DC electricity into AC ( a "string" is the term used for solar panels connected in series). A single string generally has a maximum of about ten solar panels. Your complete system may have more than one such string and if so, multiple strings are combined in parallel and the output is passed through the inverter.

Compared to the design philosophy of central inverters, micro-inverters represent a very different approach: one inverter is attached to each solar panel. Micro-inverters are much smaller in size and they convert the DC output from each panel immediately into AC. Each panel's AC current is then combined and sent to the grid or your battery bank.

Micro-inverter technology is not brand new, but its market debut is relatively recent. They were invented in the 1980s and have been commercially available since 1993 but with limited adoption. In 2008, the current market leader in micro-inverters, Enphase Energy, released Enphase M175, one of the first micro-inverters that achived large-scale commercial success. Since then, millions of micro-inverter units were sold by various manufacturers. Enecsys in the United Kingdom and SolarBridge Technologies in Texas are other examples of startup solar energy companies offering these devices. In recent years, international companies, such as Zurich-based giant ABB, which has traditionally been in the central inverter business have also added micro-inverters to their product line.

As the micro-inverter technology goes mainstream, there is a pretty good chance that you will receive a quote from a solar installer with a micro-inverter option (generally presented as the "premium" product). In order to make the best decision for your solar investment, it's always a good idea to explore the advantages and disadvantages of micro-inverters.

Advantages of Micro-inverters

Weakest link effect. You are probably familiar with the old-school Christmas lights that are connected in series where if one bulb fails, it takes the entire string with it. Solar panels attached to a central inverter also have the same vulnerability: one defective panel can stop the entire string from working which will result in a significant or complete loss of electrical supply. This also applies to shading where one or two shaded panels can cause the system to produce at a low level since the central inverter optimizes the output based on the weakest link in the chain. Worse, you may never realize that the system is performing at suboptimal levels since a minor output reduction in the range of 10-20% may be the result of weather conditions, or a defective solar panel. Even if a problem is suspected, every solar panel will need to be tested by a qualified technician to find the problem. On the other hand, with micro-inverters, if a solar panel or the attached micro-inverter fails, this will only have a minor impact on your overall system, as the dependence on the weakest link is eliminated.

Better optimization. A micro-inverter enables each solar panel to perform at its maximum potential depending on weather conditions, shading and other external factors. As a result, one solar panel cannot drag down the entire solar array's performance. A central inverter treats the whole group of solar panels as one giant panel with the electrical properties of the worst performing unit. The performance of this weakest link can be compromised due to a technical defect, or an external factor (such as dirt build-up, shading during a particular time of day or a change in orientation). Moreover, in a centralized design, all panels are typically oriented in the same way, but  in cases where this is not feasible (for example on a roof with a complex geometric shape), uniform orientation may not result in the maximum output from all of the panels.

Getting slightly more technical, the type of optimization that inverters perform is called maximum power point tracking (MPPT). Just to avoid any confusion, MPPT is electronic "tracking" which has nothing to do with tracking devices that physically move solar panels to keep them perpendicular to the sun. At any given time, the output of a solar panel is determined by the relationship between the level of solar radiation, ambient temperature and the total resistance. MPPT samples the electrical output of the panels and constantly determines the optimal resistance (load) to maximize the amount of total power. Since each solar panel may have a different amount of solar radiation falling on it at any given moment, the ideal way to perform MPPT is to change the voltage requirement for each panel, which is exactly what micro-inverters can do.

Longer warranty period. A central inverter is exposed to high power and heat loads and, not surprisingly, during the average lifetime of your solar panels (20-25 years), you will probably need to replace your original inverter with a new unit at some point. This fact is fully reflected in the warranty periods offered by central inverter manufacturers: a 5-10 year warranty period is the norm, with an option to buy an extended warranty. Micro-inverters, on the other hand, generally come with a 15-25 year limited warranty, better matching the lifetime expectancy of your panels. For instance, the Enphase M175 offers a 15 year limited warranty. Of course, you should always read the fine print of the warranty certificate and understand what is actually covered.

Increased flexibility. Central inverters have a limited range of sizes and if you are in the market for only a few solar panels, you may end up with one that's much bigger than necessary. Most central inverter manufacturers offer inverters in the 3-6 kilowatts range for residential systems. Conversely, if you would like a system that has a higher capacity, you may need to purchase multiple central inverters to do the job. Micro-inverters do not limit you in this way, as you buy one inverter for each panel you own. As an additional advantage, you can also expand your system over time, by adding more panel and micro-inverter combinations, which may not be an option if your central inverter is tapped-out.

Improved safety. The voltage of the wires linking a central inverter can be very high since the solar panels are connected in series before reaching the central inverter. Sometimes, the voltage can reach as high as 600 volts. Micro-inverters usually operate at 240 volts which is much lower and safer.

Out-of-sight and out-of-hearing. Central inverters require an active cooling system such as noisy fans to cool down the high heat load. Most home owners prefer the inverters to be installed where they are not easily visible, such as the garage, utility room, or loft. However, if these spaces are dusty, hot and have poor ventilation, the lifetime of the inverter can be shortened. In contrast, in addition to being less noisy themselves, micro-inverters take up very little room and are installed right under the solar panels, further from your living area.

Panel-level monitoring. Many micro-inverters come with a standard monitoring service that can show you how much power is being produced at any given time at the panel level. This level of detail can give you a good sense of how your system is performing (although you would also need an irradiance monitoring system such as Sunmetrix GO to make sure that you are always producing at the maximum level for the given current weather conditions).

Disadvantages of Micro-inverters

Price. Micro-inverters are generally billed as premium products and solar installers will generally present them as a higher-end option. According to SEIA, in 2014, the price of a simple residential solar PV system was just under $4 USD per watt installed. In comparison, for systems that have higher upfront costs, such as those using micro-inverters and/or higher-efficiency panels, the price increased to around $4.90 USD per installed watt capacity. This doesn't necessarily mean that micro-inverters are 20-25% more expensive than centralized inverters as there are many other factors that may explain the price difference (e.g., different cabling needs, labor costs, etc.), but it is clear that you will have to pay more for micro-inverter technology. Also, when you are comparing costs of alternative systems, you should concentrate on the full ownership cost and not just the upfront expenses. For this reason, looking at the levelized cost of solar PV systems is highly recommended.

Technology maturity. Micro-inverters have not been used sufficiently long to produce long-term performance data. They are installed in one of the hottest spots of solar panels and after several years of heat exposure, there could be an increased risk of failure. So far though, there hasn't been a major crisis in the sector that resulted in a mass recall of micro-inverters.

Harder maintenance. If a micro-inverter fails, the contractor needs to get on the roof and remove the solar panels to access the unit. In contrast, central inverters are generally mounted near the main electrical supply, so both maintenance and installation are easier.

Advanced features require an internet connection. An internet connection is required to make use of some of the advanced monitoring features that come with micro-inverters. Although your solar PV system will still produce power without an internet connection, some of the advantages of the micro-inverter system won't be accessible to you if you cannot hook up the system to the internet.

Our Verdict: Micro-inverters may be well worth the price premium

As the technology matures and mass production expands, the price is expected to drop further and the reliability of the units is expected to improve. These two factors (dropping prices and increased reliability) are likely to increase the market share of micro-inverters in the near future.

But what about now? If you are about to make your solar investment decision, you should do a cost analysis on your individual system to determine which option is best for you. Furthermore, shopping around and getting multiple quotes always helps. Just like deciding whether to go with a regular efficiency solar panel vs. a higher-efficiency one, there is no easy answer. Depending on your situation, a central inverter with regular panels may be exactly the best fit, especially if the price is right and quality products are used. At the other end of the spectrum, higher-efficiency panels with micro-inverters will cost you more initially, but they will produce more power and may decrease the overall ownership cost in the long run.

Two factors to consider that can tip the balance are the geometry of your roof and the level of shading. If you have a roof with a complex shape, using micro-inverters will allow installing panels on multiple surfaces with different orientations. Finally, if shading is a concern for your roof, adding micro-inverters to your solar design can make a big difference and boost your production compared to a more conventional design.