Tel Aviv To see into the future, Ronen Faier takes a look from the window of his office onto the sunny streets of Herzlia, a Tel Aviv high-tech suburb. On the way to climate neutrality, the sun will play a key role as a source of energy, says the chief financial officer of the Israeli start-up Solaredge. With his company, he wants to be one of the winners in this new energy world.
Solaredge’s technology makes it possible to harvest more solar power from every PV system, he emphasizes. To achieve this, system restrictions on photovoltaic energy have been effectively removed.
Solaredge has started to manufacture inverters that can convert electricity generated by PV systems. The company now offers the full range of everything to do with solar power generation. In addition to energy storage systems, it also includes intelligent systems for monitoring and energy management. If problems arise, Solaredge products can intervene in real time.
The demand for renewable energies is huge, says Faier. The world population is growing, as is the standard of living. In the industrialized countries there are more electric cars, people are crowding into the metropolises. “In addition, power plants will switch from gas or oil to solar,” he says. And with cheaper batteries, PV systems can be operated even more cheaply.
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The lack of chips is a challenge for the solar industry. Solaredge is in a position to “bridge these bottlenecks through a combination of measures”, says Faier and cites as examples the double procurement of components or the holding of safety stocks. But it shows that the shortage of electronic components affects the entire industry and “slows growth in this sector”.
Solaredge has tripled the number of installations in Germany since 2017, says Karlstetter, who looks after the European market from Munich.
And yet Solaredge is on a growth path. “We’re the largest inverter company,” says Faier. The Israeli company has ousted its competitor SMA from the Hessian Niestetal from the first place among the inverter suppliers. Faier proudly refers to the statistics of the data provider IHS Markit, where Solaredge has moved up from tenth place (2014) to first place and has overtaken providers such as ABB or Huawei. In the USA, the Israeli company has a market share of 50 percent in residential real estate and 18 percent in the commercial sector.
The solar industry also has a political problem right now
Germany is a growth market for Solaredge. “We supply a high proportion of both smaller installations and larger systems,” says Alfred Karlstetter, who looks after the European market from Munich. Solaredge has tripled the number of installations in Germany since 2017. In Europe, the company is number one among PV inverter manufacturers.
The Munich resident himself has installed photovoltaic systems with 20 kWp in his house, as well as 20 kWh of storage capacity, and can thus produce almost 100 kWh of electricity on a good sunny day. In Munich, where he lives, he can “very well” cover his own needs, including an electric car, with his system for eight months and even feed it into the grid in May and June.
Solaredge’s chief financial officer wants to be among the winners in the new energy world.
Solar energy could of course be more attractive in Germany, he says. The Renewable Energy Sources Act (EEG 2021) contains positive incentives, but also bureaucratic obstacles, says Karlstetter. It stipulates that for rooftop systems between 301 and 750 kWp, half of the energy must be consumed or not paid for, which can be economically difficult, says Karlstetter, especially for the operators of larger systems. It would be better if more were paid.
The solar sector was also disappointed in the USA. Because US President Joe Biden has re-acceded to the Paris Climate Agreement, climate activists all over the world, including Germany, had high hopes for him. Climate protectors expected further tax breaks for green energies. But Biden’s “Investment Tax Credit” (ITC) program does not bring improvements, but deteriorates. For investments in alternative energy systems, a reimbursement from the tax office of 26 percent could previously be expected. This year, according to the ITC, it is only 22 percent, and for systems that will go into operation in 2025, just ten percent.
The solar industry also has a political problem right now. “Statistically speaking, half of each solar cell consists of silicon from the province of Xinjiang,” says solar expert Götz Fischbeck from the Smart Solar Consulting agency. Research by the Handelsblatt has confirmed the results of the report with a view to the German solar industry. Numerous systems on German roofs, fields and fields were produced with materials obtained in Xinjiang, which come from the Uyghur region of Xinjiang.
China is a leader in the manufacture of polysilicon, the raw material for the manufacture of solar cells, which has become cheaper after the People’s Republic cracked the code for its manufacture. But because Solaredge does not manufacture solar cells, the company is not affected, says CFO Faier: “We mainly use aluminum and copper.”
Drive systems for electric vehicles
The start-up was founded in 2006 by five former cyber soldiers from the 8200 military unit and today has a turnover of around two billion dollars with 3,500 employees. A total of five million power optimizers and 180,000 converters were sold. In Europe, the Netherlands, Germany, Italy and Poland are among the most important markets for Solaredge.
In addition to the core business, the Israeli solar company has diversified in recent years. It supplies drive systems for electric vehicles, including for Stellantis, including the Fiat-E-Durato in Europe. Three years ago, the Israeli start-up began to expand its range of products through acquisitions.
It bought the South Korean company Kokam, which makes lithium-ion cells and specializes in the production of energy storage devices. Almost at the same time, Solaredge acquired the Jerusalem company Gamatronic with the aim of expanding its position in the uninterruptible power supply (UPS) market. UPS provides emergency power to an electrical system if the input power source fails.
Despite disappointment with Biden’s tax plans, Faier also sees positive signs. A look at the US Department of Energy’s numbers shows that between 2019 and 2020, the contribution of renewables, including smaller solar panels, increased nine percent. “Solar energy,” he is convinced, “will continue to grow.” Anyone could become a prosumer – someone who both produces and consumes electricity.
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