Doing the teardown analysis of solar inverter from Power-One,
IHS has reported the model Aurora PVI-4.2-OUTD-S-US carries
a BOM of $641.47. IHS says when the $47.87 manufacturing
and test costs are added in, the total expense to produce
the inverter rises to $689.35, as presented in the table
below.
The solar power inverter market has strong growth prospects,
with worldwide unit shipments set to rise to 30.2 million
units in 2015, up from just 4 million in 2011, estimates
IHS.
"Companies in the solar inverter business will have
to engage in aggressive price reductions to remain competitive,"
said Greg Sheppard, senior director of PV research at IHS.
"With prices to decline by an average of 10 percent
annually for the next several years, continued reductions
in inverter BOMs will be needed to keep costs in line with
pricing."
Below are the BOM and cost analysis as well as market findings
on solar inverter:
Power-One in the second half of 2010 ranked as the world's
second-largest solar power inverter supplier, with a 12.5
percent share of global market share measured in terms of
gigawatts. With its strong market position, its products
provide a good representation of the types of inverters
available in the market.
The PVI-4.2-OUTD-S-US is a power inverter intended for
outdoor use. Of the various models in the company's flagship
Aurora product line, this unit features the highest-rated
maximum AC output power of 4,200 watts.
Market surveys indicate that typical dealer prices for
the Aurora PVI-4.2-OUTD-S-US range from approximately $2,100
to $2,600.
When looking at the costs of the Aurora PVI-4.2-OUTD-S-US,
the most expensive component category is the mechanical
segment, which accounts for 33.1 percent-or one-third-of
the inverter's total BOM. These mechanical components make
extensive use of commodity metals whose pricing can vary.
"Inverters like the PVI-4.2-OUTD-S-US have a major
opportunity for cost reduction, as prices decline for copper
and aluminum," said Kevin Keller, senior principal
analyst, teardown analysis, for IHS. "These commodity
metals are responsible for the bulk of the 38 pounds of
weight of the PVI-4.2-OUTD-S-US. Prices already have come
down from highs earlier this year, and could decline more
in the future."
Inverters also could reduce enclosure costs by employing
lower-cost sources for heat sinks. For example, the Aurora
PVI-4.2-OUTD-S-US includes a machined heat sink made from
extruded aluminum with an estimated cost of $39.13, representing
about 6 percent of the total BOM.
Furthermore, the enclosure of the product is made of stamped/formed
aluminum and is priced at $42.26, or 6.6 percent of the
BOM.
Another prime candidate for cost reduction of the inverter
is its passive components. Passives represent the second
most expensive component group of the PVI-4.2-OUTD-S-US,
at 29.6 percent of the total BOM.
The inductors account for a significant portion of this
passive expense. For example, the PVI-4.2-OUTD-S-US integrates
two pieces of wound copper foil, double-cut C core inductors
from Endela Electronics Co. Ltd., priced at $72.10, or 11.2
percent of the overall BOM.
"Passive costs in inverters could be reduced as manufacturers
make greater use of lower-cost sources for devices like
inductors," Keller observed.
The figure below presents the percentage breakdown of the
costs of various components in the PVI-4.2-OUTD-S-US.
