How SolarEdge is Pushing the Envelope in Solar Optimization with Chris Thompson | EP169

With our cloud models, you know, at night we are running a digital twin and and even on like a residential basis, you know, because we know the design of your system, you know, every module that's in there, we can look at weather, look at the weather data. And we can do you know, for you know, for Tim's home, we'll do a generation curve. Based on the digital twin, we can look at consumption expectation based on historical data, and then that ties into how you charge and discharge your battery.

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Today on the Clean Power Hour, one of the most storied companies in solar technology. My guest today is Chris Thompson. He is the vice president of product for solar edge. Welcome to the show.

Tim, thanks for having me this morning. Good to see you.

The Clean Power Hour is brought to you by Denowatts. If you're a solar PV asset manager or performance engineer, you need better data and better business intelligence. With Denowatts, digital twin benchmarking technology, you get more accurate, efficient, and faster performance measurement results. The fourth generation Deno recently completed a technical review by DNV. You can download the report at Denowatts.com, that's D E N O W A T T S.com. Now back to the show. This is honestly a tremendous honor and an interview that I've thought long and hard about doing. You're new to me. And you're fairly new to solar edge. But you're an OG in the industry, Chris. So we'd love to hear a little bit about your backstory. How did you get interested in clean energy?

Sure, sure. So I joined the company three years ago. But really all my life had an interest in electrical power systems. Not really sure why. Even as a young child, I remember finding the topic super fascinating. And, you know, went to college in the 90s. And really started in the industry, doing Power Systems for datacenter. So with a company that did uninterruptible power supplies. So we built out data centers, it was kind of in the 90s company at the time called American power conversion later acquired by Schneider Electric, you know, one of the big conglomerates in the industry. And it really spent like, you know, the first 10 or 15 years of my career more on the data center side, all power conversion systems very, very similar, technically, to solar inverters. All these systems had batteries and backup. So I've kind of started working in batteries, you know, 30 years ago, mostly led acid data center applications. And then you know, over time, it just just evolved, you know, solar became really interesting. And really stepped into the renewables industry about 2001 I joined a venture capital firm, which was early investor and some solar startup companies, fuel cell companies, a battery company called a 123, you know, that we took public. So it's it's been a long time. It's been a very interesting ride.

I've heard that name a 123. Are they still around? Well,

yes and no. So we originally invested in them, they went public, okay, as a battery company. So they're one of the original investors of lithium iron phosphate is Professor yet Ming Chang out of MIT, super interesting company at the time, and they went public. In 2008. It was maybe the first battery company unicorn, and certainly ahead of their time. But as can be the case with any battery company, they had some, some fires and some failure issues. And then they went bankrupt a few years later. Now, they they were brought out of bankruptcy, and they actually have a booth downstairs. And so so they're still around, but a I think some of the original IP is owned by the new way. 123. But it's it's not not certainly not once what it was, and I guess it was all successful, but it certainly taught me a lesson on being super careful with batteries.

So give us a little more of the arc of your career, though. You were you were a venture capitalist for how long?

I did that for about four years. Okay. Yep. And then, and then you went back into industry. So if for people have been around for a while, there's a company called Xantrex. So I left there, I moved up to Canada as a Canadian company. We did a lot of residential solar inverters. This is back we were competing with SMA Fronius at the time, so the early 2000s. And I would say like several companies, so that company, interestingly, was also acquired by Schneider Electric. But a lot of those original companies, they didn't really follow the trend to MLP I would say so the industry evolved. And there are some companies who I think stuck their head in the sand and maybe denied it. And I remember even even when I was at Citrix at that time, I was a VP of Engineering and I kind of thought at least I thought microinverters were a little crazy, because I thought you know, solar modules get really hot, why would you put an entire power conversion unit up on the roof. But you know, then for safety reasons, obviously module level power electronics became very is very relevant and very important in many of the incumbents that time, you know that their market share completely faded away. So so all the all those incumbents really?

Do you know, the origin story of the MLP at solar edge like they're way ahead of the curve there. Yeah. And obviously, it's a technology that's very useful for rapid shutdown, for monitoring, you know, module level, you can see that's one of the cool things about the solar edge system in general, is you can look at on your smart device and see what's working and what's not in real time. And that's really valuable.

Yeah. Okay, so you bring up a couple of good points. So I would say the origin story for solar edge is super interesting. And, as with, you know, a lot of Israeli companies is a group of gentlemen who were in the military together, had a really tight bond with one another, and also happened to have like, a certain diversity of skill sets in terms of like, you know, they're like some really interesting engineers in leadership and sales skills and things like that, and they originated the company. But I think, you know, what's interesting is, they came up with the architecture, sometimes people from outside of the industry, they can kind of come up with approaches that insiders maybe wouldn't have come up with, you know, so me, I wouldn't even say like, as an insider, I might not have come up with that approach, because my thinking was probably too linear, and too conventional with what the industry had had always done. And they came out of the industry from outside of the industry at the time. And then they came up with an architecture that made a lot of sense. Now, I don't know if that point. They were thinking like, oh, it's gonna be all about safety, because they were thinking of a few things when you think about that optimizer. So you brought up one really good point. So so this data, we have right now about 130 million optimizers around the world. And I'll give you like an example of that. So it was really hot this summer, right? People say, Oh, and August is crazy hot. And so I thought to myself, I wonder how hot the rooftops are in Arizona. Right? So guess what? We pulled up the portal. And I found, like, 100,000 data points across Arizona. And I can tell you how hot the roofs get in Arizona. And how hot is that? I'm just curious. 70 to 75 degrees Celsius, every day. Yeah.

What is that in Fahrenheit? Oh,

I don't even go that high. We tend to stuff like, you know, 40 and 50. Like 122, I start falling. It's like 140, though, isn't it? It's crazy. It's much, much higher than that. So yeah, it's much higher than that. So if 50 is even higher than that, but what you get into is, when you think about the mission profile for what you going onto on the rooftop, right? You get to see that data. So when they when they thought about it. So I think once you get the data, so you know, we can see these things. And you know, and part of it, it was a curiosity, but part of it was to say where's the mission profile of our equipment, because some equipment is made for like 6065, like even microinverters are often made for 6065 degrees C. And when rooftops start getting really higher than you start having failures.

Well, they'll just stop working right? I mean, won't they won't they like shut themselves off at a certain point so that they don't get damaged or

so I'm not coming from microinverter company, so I can't comment on like, exactly what their failure modes, typically a product stops working. But it also tells you about like what it's designed for, like it's probably impacts the lifetime of the product as well. But as a temporary measure, it probably turns off, but either way, we would consider that a failure of Operation.

But is there is there some first principles element to a power electronic, versus a micro inverter? You know, in the greater scheme of things. Like it's apples and oranges in a way. But is there a reason why solar Edge doesn't make micro inverters?

Yes, yeah, yeah. So, so Okay, so getting back, I'll tie that in. So when we talked about like the like the origin story, so when they looked at it, so I think they saw a few things that would be good with this architecture. So one is the safety. And that's you get to do the rapid shutdown. And later on safety became very important. But I think at the, you know, when they started the company, I don't know if they realized at that point how important safety was. But But obviously, it was very important. And then you have the data that we talked about, you get the data. And even with some of the new products, like we're now measuring the temperature or even the connectors. And so you see the optimizer temperature, we also see the connector temperature, because those are things that can fail, and you know, it could be stepped on or damaged. The other thing it does is it regulates the voltage. And so when you have the voltage regulated, that means the inverter can run in a super efficient way. So our inverters are the most efficient in the world 99%. And they've been that way for a while. And the reason one of the reasons that can be so efficient is because when you regulate the voltage, you get like a perfect modulation index on your inverter. And so in our course, our efficiency is 99%. And that's a weighted average. So they take the average by measuring it at seven different load factors, three different voltage levels. And you met you actually measure every test in triplicate, and of course, you do it at a third party and you get a third party witness, and then they average it. And so it actually means, you know, if your CTC efficiency is 99% mean sometimes you're above sometimes you're below and it's averaging 99%. So you get really high efficiency out of it. So so the alternative approaches Okay, let's skip the whole inverter up there. But a whole inverter has a lot of parts. And the more parts you put up there, the more difficult it gets to make it be reliable. And so when you think about temperature, so you know, goes back, but like, you know, a century ago, there's this, you know, scientists, Mr. Arrhenius. And most of reliability has to do with what we call the Arrhenius equations. That's an exponential. So which basically means as your temperature goes up, it gets like, exponentially more difficult to make it reliable. And so when you look at the solar edge approach, we put very, very few components on the roof. And that's why we can make the optimizers be incredibly, incredibly efficient. And that's why an optimizer can run it like 85 Fine, whereas a microinverter may want to run it like 65, which actually is a very relevant temperature difference when you're thinking about like Arizona. Yeah, you want to use it. Massachusetts may not be so relevant, but but we have a few hot states, Arizona, Texas, Florida. Yeah, you know, the markets getting a and getting hotter. So that's the interesting thing.

I mean, it's so hot in Arizona, that they do installations at night, which is, you know, logical but crazy to think about from a work force perspective.

Average rooftop is 30 degrees Celsius over ambient. That is very, very hot. Dang, dangerously hot. And, and you know, and you probably know, I know you're very expensive on the EPC side, but when it comes to safety issues, the most dangerous thing by far is just getting on the roof. Like like roofing is a very dangerous profession, but like you know, so any more work you can do on the ground is safer than being under specified when carrying a module, something that could be heavy. You know,

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Yeah, so there's a few interesting areas. So I would say if you look at the expansion of the company, we're expanding, like in a few different ways. So one is in power classes. So the power classes, you'll see that we've got the 330 Kw over there, that is still a DC optimized solution. And so I think that'll be a really good product for community solar. And with that, being a DC optimized solution, you kind of get those benefits, where you have like, you know, an undulating terrain, or you want to vary your string sizes, or an extra length on your strings. And so like, like, that's a an attribute that works, whether you're on a residential rooftop, if you work on a commercial rooftop, you know, where, where the shape is not perfect and rectilinear. And like, and I think, you know, when you bring up the differences between the US and Europe, that is one of the differences like I spent a few years at for solar, and we did a lot of stuff in deserts. And you can make things perfectly square and perfectly rectangular, you know, luckily, Europe doesn't have too many, you know, gigantic deserts. And so so the string inverters offer that benefit in general and across if you do an optimized string inverter, you kind of get get those benefits of savings on the boss. And you get the savings. You know, when we look at savings of optimization, and you're anytime there's lack of homogeneity in the array, you get the benefits. So that could be you've get shadowing, when you look at utility scale, it tends to be like soiling, like you get a bigger array, sometimes the edges near like a dirt road, you get soiling on it. The other interesting thing is bifacial modules. So So we've done some interesting analysis on bifacial modules because we can get the optimizers and we can see and the albedo effect, which is the backside radiation of a bifacial module, it's very non uniform. It changes under the most minut conditions like whether you have grass that's Brown, or grass. That's good. Read, so it changes during the year. And we see things when you have modules that are higher above the ground, they get more albedo effect, which is kind of what you would expect intuitively, when modules are lower to the ground, they get less, when modules are on the outer edges of array, you know, they get a little bit more sun coming in from the sides, you get more albedo effect. So all of those things, we can capture those like module to module variances, where if you got if you got along singular string, and you've got maybe you've got some corners or edges that are producing more power, if you just string them all together, you know, you can have that conventional effect of the weaker module is going to limit the current on that string. So we get those benefits. The other thing I would say is not just in power class, if you look across the platforms, you're gonna see a lot more software. And the software and the different power classes is doing different things. But I would say we are really moving into an environment where the difference is between vendors is more to do with software. So for example, on commercial rooftops, we've invested in a really tight partnership with a company called Weibo, and they do charge station management systems. And so you can think about something where you have like a converged infrastructure from like a monitoring control platform. So you know, a lot of workplaces, you're gonna have charging at work, when everyone comes to work and starts charging, what's going to happen in your demand charge. So now you can easily link things like your rooftop PV production, to your Eevee charging, so those are synchronized. So if you have a lot of sun, you do a lot of charging. If the sun goes behind the cloud, you bring down the charging, so you can manage demand charges, you can manage your Evie charging capacity, and you you synchronize that basically with your PV production.

And are you suggesting though, that that's like an out of the box solution that solar edge is offering now for commercial?

Yeah, yeah. So right, right now, I would say like, if you look at the solution, it's not going to be we, we can offer that solution. It's not a fully converged platform. But that's the process of what we're going through, as well as Mike migrating that to a converged platform. And so we also did another software acquisition, that's actually a company in the UK, but but combined, take a look at them in the booth, they get really deeply involved with with energy management and buildings, energy analytics. So if you want to think about things like controlling, heating and cooling, chilling, you know, access, like really interesting data, like, you know, managing demand charges by changing the setpoint in a freezer, you know, by like, you know, half a degree or something. So you can kind of manage the demand charge curva throughout the day, and what is the name of that company? There's something called Hark, sorry, somebody called Hark, hark, hark. Ha, okay. Yep. Okay. Yeah, small, small software company out of the UK, but very, very powerful, very interesting platform. And so, so you can kind of see like, like, you get the rich data from the optimizers, in addition to, you know, general PV. And then you can tie that into these other software things because increasingly, like the world is becoming electrified. And so you know, in the home, it's Evie charging, even at workplace, it's Evie charging, you know, we're seeing more heat pumps. And so the better a better, we are able to manage all of those loads, because we have good visibility to production. And we have good visibility to even consumption. And so with our cloud models, you know, at night, we are running a digital twin, and, and even on like a residential basis, you know, because we know the design of your system, you know, every module that's in there, we can look at weather, look at the weather data. And we can do you know, for you know, for Tim's home, we'll do a generation curve based on the digital twin, and we can look at consumption expectation based on historical data. And then that ties into how you charge and discharge your battery.

So I went to a workshop with solar edge, about six, nine months ago, and it was focused on residential. So I got a deep dive on the storage product product for residential and I was very impressed. But what about commercial storage? Are you going after that space as well?

So we don't have a product right now for commercial storage? We're working on it. So yeah, I'll hold off on making any announcements on the commercial

storage because I mean, what you're talking about with this, you know, energy modeling and demand demand response, right? Is the future for sure. Right? And it's really de rigueur in industrial settings. They're already doing some form of this in most buildings. But it's about bringing it together. Right and having kind of an all in one seamless. Wraparound yeah,

that's that. And that's where the software comes together. So the interesting thing that really, in my mind was a step function and changing the industry was nem. Three, you know, several months ago, and so, you know, a lot of us know, kind of what happened with nem three.

Well, the attachment rate is now 70%. I heard in California and I think

it's going Higher like, like, it'll start going very high. When you look at the economics, you know, maybe the PV system gets slightly smaller, and you get a higher attachment rate of battery. But there's a couple of things on them three NEM, three, in my mind, I have never seen price signaling in the energy industry be so strong. And what I mean by that is, when they don't want the electricity, they turn the value all the way down, you're producing solar in the middle of the day, you get paid next to nothing like a penny, but in September, like this month, right now, well, they haven't got caught up on their billing, but when the billing gets all caught up for them, three, they are paying like, close to 10x, you know, like two to $3. You know, normally we measure kilowatt hours and cents, not dollar, so we're looking at two to $3 per kilowatt hour. So they're saying when they want it, they will pay generously for it, when they don't want it, they basically will pay you nothing. What was interesting, so we have a very sophisticated solution for them three, but it really started in Europe. You know, you know, California has high energy prices, but generally in the US, I think we're pretty luckily lucky on a global basis in terms of energy costs. And when we look at batteries, particularly at the residential bases, in North America, it's generally been about backup. And security, not about economics. No batteries have been about economics in Europe, particularly, you know, with the origination of conflict in Ukraine. You know, prices really went up, you know, Germany shut down a lot of nuclear power plants getting gas from Russia, right, things get complicated very fast, but we saw rates go up. So the solutions that we developed for Europe really got us in place for them three. And now when we go to them three, so so so that the back end algorithms, storage attached to the grid without backup, which is a lower cost solution, we basically brought those over from Europe. And of course, the tariff structures are different. But you know, those are all readily readily available. So if you're in an M three market, or what are the IOUs, now, you install the system, you just need to pick which of the three are your user in so if you're in PG and E, it pulls in all that data, of course, it's asymmetrical in terms of what you get paid versus what you what you pay them. But it knows all of that it embeds that into the energy management system. And it'll it'll do that function that I talked about, where it creates the discharge curve, it creates the demand curve, it creates the generation curves every night, it updates the model. And it basically plans economic dispatch over the day. And so it can do some clever things where it may say, Okay, we're gonna discharge the battery in the morning, because I'm expecting Tim's gonna go to work. And then while he's at work, I'm going to refill the battery because I know how much I'm expecting to generate during the day. And then I can dispatch that battery again at night. Because we see that we're gonna get optimal economics from the dispatch, you know, from from a six to 9pm window. So it'll it'll run all of that at night. But but that is more and more tied in. So I think from a hardware solution, we're more getting to the value of the integrated solution. So not having a battery vendor for the battery, a solar vendor for solar and even like a load control vendor for load control, because we've got the intelligence embedded across all of those solutions. So we can make a load control decision, because we have visibility to generation and consumption and battery state of charge.

So we just have a couple of minutes left. Chris, I could talk to you all day. And I really appreciate you talking about this nem three phenomenon, you know, California is is a trendsetter in many ways and what's happening in California is going to happen in other markets. There's just no question, right? It just got to be a few years. But and your your footprint in Europe is is very interesting and relevant, right? Because it allows you to see the future I tell my listeners, if you want to see the future of solar and storage go to Northern Europe. It's happening, right? I mean, the electrification of transportation is way, way more advanced than it is here. We've hit 5% of car sales in the US. Well, they've had 80% in in many markets, right? Yeah, yeah. So

gas prices are higher, their electricity prices are much, much higher, right? They pay attention to these things, more than more than me too, because they're more meaningful in their daily lives.

Now we're kind of fat and lazy, unfortunately. But that's gonna change

that term. But you right?

So anyway, but if you're an installer if you're a CNI EPC, what else should you know about solar edge? You know, you have many options when it comes to product. But what do you think is a key differentiator that we haven't touched on so far? Sure.

Sure. Yeah. So some of the things we talked about, you know, so when we talk about optimization, I think we've talked about string lengths. We've seen like, you know, it's interesting to look at CNI rooftops. And what I say is like, how busy and crowded some of these rooftops are like, you see some pictures. It's like a big open array. And then you look at another building, right? They've got air handlers. They've got skylights, and you've got like lots of little arrays all over. And so when you have optimization, and you have that flexibility, you get a lot a lot of power and getting more power on your roof, you get the benefits of running fewer DC strings and putting the inverters on the ground. The other thing that we're pretty uncompromising about is on safety. And so when with with our new optimizers, on design, residential and CNI, we are measuring those temperatures. And so we're seeing some ways where safety, you know, some of the what I would say the 3741 solutions, we're seeing a setback and safety because the whole DC array is basically energized. Now, you know, like, like, you put some tie wraps, but, you know, everyone knows, like the tie wraps may break after five or 10 years. And so in some ways, we're seeing a decrease in safety, I think with those solutions, we're pushing it the other way, like, like we are measuring the temperature of every connector. So that whole roof is now covered in a net of temperature sensors, you know, that detects it makes it so we're making things even even safer on the rooftop, so you get the incremental high energy harvest, but we're pushing safety to to higher standards than they've ever been.

The Clean Power Hour is brought to you by Denowatts. If you're a solar PV asset manager or performance engineer, you need better data and better business intelligence. With Denawatts digital twin benchmarking technology, you get more accurate, efficient, and faster performance measurement results. The fourth generation Deno recently completed a technical review by DNV, you can download the report at Denowatts.com. That's D E N O W A T T S.com. Now back to the show. Well check out all of our content at cleanpowerhour.com Give us a rating and a review on Apple and Spotify. That's the best thing you can do to help the show and to help others find the show. Check out our YouTube channel, subscribe to the channel. We're dropping two videos a week. And please reach out to me on LinkedIn. I love connecting with my listeners. And you can also contact me through the website cleanpowerhour.com. With that, Chris, how can our listeners reach you?

Well, if you hear at the show at our RE plus, it's the last day come by and say hi. Otherwise, yeah, find us on LinkedIn or find us on the web.

Awesome. I want to thank Chris Thompson, VP of product for solar edge coming on the show. Let's grow solar and storage. I'm Tim Montague. Hey, listeners. This is Tim, I want to give a shout out to all of you. I do this for you twice a week. Thank you for being here. Thank you for giving us your time. I really appreciate you and what you're all about. You are part and parcel of the energy transition whether you're an energy professional today, or an aspiring energy professional. So thank you, I want to let you know that the Clean Power Hour has launched a listener survey. And it would mean so much to me. If you would go to clean power hour.com. Click on the About Us link right there on the main navigation that takes you to the about page. And you'll see a big graphic listener survey, just click on that graphic and it takes just a couple of minutes. If you fill out the survey, I will send you a lovely baseball cap with our logo on it. The other thing I want our listeners to know is that this podcast is made possible by corporate sponsors. We have two wonderful sponsors today, chin power systems, the leading three phase string inverter manufacturer in North America and Dena watts, a performance monitoring platform for utility scale solar. So check out CPS America and Denowatts. But we are very actively looking for additional support to make this show work. And you see here our media kit. With all the sponsor benefits and statistics about the show. You know we're dropping two episodes a week. We have now over 320,000 downloads on YouTube. And we're getting about 45,000 downloads per month. So this is a great way to bring your brand to our listeners and our listeners our decision makers in clean energy. This includes projects executives, engineers, finance, project management, and many other professionals who are making decisions about and developing, designing, installing and making possible clean energy projects. So check out clean power hour.com both our listener survey on the about us and our media kit and become a sponsor today. Thank you so much. Let's go solar and storage