SMA Solar's hybrid system to target huge off-grid market

FRANKFURT Thu Aug 23, 2012 10:38am EDT

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FRANKFURT (Reuters) - Germany's top solar company SMA Solar will offer a key new product from next year that will allow diesel generators to draw power from solar panels, creating hybrids that could bring down the cost of power generation in remote areas.

SMA Solar said earlier this month it would enter the market for solar-diesel power networks, leaving analysts hopeful the new product line will boost sales at the company, though it provided no specific details of its plans.

The company - the world's biggest maker of the solar inverters which turn electricity generated by a solar module into electricity that can be fed into the grid - told Reuters it aims to start mass-producing its Fuel Save controller from early 2013.

Just like the computer in a hybrid car decides whether to draw on battery or fuel power, the controller determines the most efficient way of using energy generated by a solar panels and diesel generator.

"Potentially, this is a gigantic market. But you need to differentiate between potential and reality," said Matthias Vetter, expert in autonomous power supplies at the Fraunhofer Institute for Solar Energy Systems.

According to research firm GlobalData, the worldwide market for diesel and gas generators (gensets) will nearly double to $22.3 billion by 2020, from $12 billion in 2011, driven mainly by buyers in Africa and Asia.

INITIAL OUTLAY

Diesel generators are a key source of electricity in underdeveloped economies with poor power grids. But with diesel prices climbing and solar power becoming less expensive, adding solar to the mix could reduce costs despite an initial outlay for the switcher, a solar panel and an inverter which helps feed electricity into the local grid.

SMA gave no details about how much the products would cost.

Its rivals - off-grid power specialist Elgris and unlisted German firm Juwi - have also begun to develop products to make diesel and solar power run efficiently side by side.

SMA said a successful market entry in the solar-diesel hybrid market would lead to "an increase in sales during the coming years", but declined to be more specific.

Territories with high solar radiation - such as Australia, South America and the Middle East - would be target markets for the fuel-save technology, SMA said.

Potential customers include companies, water desalination plants, mines, hospitals, hotels, holiday parks or remote villages with no access to grids. It would likely be too expensive for smaller users.

The company said it would provide additional information about its solar-diesel strategy during its capital markets day on September 26.

Analysts said they were keen to get details on expected revenue and profit potential and said a successful market entry would result in upside for SMA's business, which is still mostly tied to markets that depend on government subsidies.

(Editing by David Holmes)

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