In November 2020, REM discussed the acquisition with Filippo Carzaniga, Chairman of FIMER, covering the plans for the business now it is the fourth largest solar inverter manufacturer in the world and key trends in the short-medium term including the impact of digitalisation in the global solar sector.
Can you give me a bit of background about yourself and FIMER
FIMER was established as a welding company in 1942. The company was involved in the welding business until 2007, when it decided to expand into a different market segment. Consider that we started developing inverters for our welding and industrial automation division in 1983, so after almost thirty years of experience developing inverters, in 2007 we decided to approach a different business, a different sector and we entered the solar business. If you take a welding inverter, it is almost a solar inverter that is working on the opposite side, because the welding inverters is taking the alternating current and converting it into direct current for welding. A solar inverter is exactly the opposite, so it takes the direct current and converts it into alternating current. We started developing inverters with a specific focus on the utility segment, providing inverters for the end user of PV plants.
When we started, we were very lucky because the market in Italy was booming and we quickly expanded across Europe, moving into Greece and Romania. Then in 2014 we moved into Latin America, thanks to demand from big utility customers at a global level and this is when we started to grow our experience in the utility segment.
At this stage, the market was changing very quickly, the technology was changing rapidly, and so from starting as Italian company, we soon became a global player. In this scenario and environment, to be a local company was not enough. To be focused on one market segment was not enough and, to operate only in specific areas was not enough. We became a global company with a worldwide portfolio in all market segments.
In 2020, we made the bold step to acquire ABB’s solar business, making us the fourth largest manufacturer in the world, with the largest portfolio of solutions today available with a presence in 26 countries worldwide.
Personally, I have worked for FIMER since 2006, covering a range of different roles including Chief Executive and currently as Chairman. Today, the company has a very strong and broad management team, coming from different sectors that will sustain our future growth.
The ABB inverter business you acquired recently, can you give me a basic outline of what products it provides, where these are manufactured, how highly they are regarded when compared to other inverter brands, that kind of thing
The former ABB solar business was very strong in across the sector, from residential inverters up to utility inverters, and the company was manufacturing in two main plants, one in Italy and one in India. The Italian plant was and is our strongest exporter for all the solutions. Thanks to this merger, we are now in a position to cover all market segments.
All of our plants are working together, all our teams are working together, and all the departments are working together in one direction, in a unique way as one company. We are now merging all the technologies, so in the future, in the utility segment, where we currently have two different technologies, we are developing a next generation platform and solution that will merge the competencies and R&D into one direction. If we are to think about what the future will be for our company, we are working very strongly to evolve on a bold level.
If we think of the inverter as only as a system to convert energy, then we are not doing it justice. If you think of an inverter as only a converter, it’s like thinking of a smart phone as just an implement to make calls. What smart phones are doing today is a completely different job, where making calls is just one function. The inverter of today and of the future is the same.
Today, the conversion of energy is just one of the functions of the inverter, but we are working towards an inverter with artificial intelligence, that can talk to the environment behind the inverter, to be able to exchange energy, store energy, and thanks to the implementation of the Blockchain protocol, to be able to sell energy. In the near future, thanks to technology like digitalisation and AI we are aiming to move away from just one function to where they can talk and interact, with the environment around the inverter being much more integrated into a smart grid, with a smart environment behind.
For these intelligent solutions, we are of course pushing the market to be more competitive and develop new features for artificial intelligence, predictive maintenance and to interact with all the grid standards and grid capacity all around the world. Why? Because in the utility market, the inverter has to manage relations between the plant and especially the entire power grid system where the inverter is installed.
I’ve read that in 2019, the UK’s Solar Trade Association (STA) expressed concern via an open letter to ABB, regarding the quality of ABB products and customers service. Have these issues now been resolved?
Yes, for two reasons. Firstly, FIMER is taking care, in full, of all the warranties and the liabilities coming from the market and from the customer, relating to ABB products installed over the years. Secondly, FIMER negotiated a specific and lateral agreement with ABB to be covered for previous liabilities and claims.
For ABB, solar was only one percent of its business. For FIMER, it accounts for 94 percent of our business and therefore the majority of our strategies are focused on supporting our solar customers. What we are doing is to completely change our strategy to adapt the company and our response to the market needs, being much more efficient in taking care of demand from the market and putting the customer at the centre of our business.
What I am always saying to our team is that a full investment is not really an industrial investment but is much closer to a financial one and we know that our customers are looking to get back their money in the shortest time possible. This is only possible if you are performing very well, in an optimised way during the service cycle. Because the customer is making an investment during the procurement phase, we have to care much more about how we are serving customers at the OPEX level, because if we perform very well at the OPEX level, we are guaranteeing their investment for the life of the plant and not only regarding the inverter but also all the investments made in installing the plant. We are becoming very passionate about our service standards, putting the customer at the centre of our business and increasing our service level to perform much better.
We performed much better thanks to the investment the company has put in place during the last three to four years.
Can you give me an idea of how digitisation in the solar sector is progressing and what plans FIMER itself has in this particular area?
Digital technologies are at the centre of our future plans. Investment in Artificial Intelligence and digital technology is in the centre of new platforms that we are developing for the future. We are investing a lot in communication between the inverter and the environment, including the communication systems around the inverter, including integrating protocol from Blockchain into our inverter and integrating digital features in the inverter to communicate with the smart environment and smart grid. The inverter belongs to our string solutions, but also to our centralised solutions and thanks to our digital string inverter, we are for example able to commission a centralised inverter very quickly.
I’ve read somewhere that FIMER intends to engage in the development of innovative storage systems and microgrids, can you tell me a bit more about that?
Today, in the residential segment, we have the highest performing platform available on the market. We are supplying and delivering the only completely integrated solutions, including conversion and battery storage available in the market. With all the communication protocol already tested and secured in the inverter, we can extend the battery pack from 4 kilowatts to 12 kilowatts with a 5kilowatt inverter. With new rules and incentives in Italy, self-consumption for the residential sector is becoming one of the strongest trends we are seeing, and we are really increasing our numbers in the residential segment. We are also developing new products that will satisfy this trend and cater for increasing appetite in the residential sector. We are also looking at hybrid solutions and developing storage solutions for the utility sector.
What will this acquisition mean for future research and development? [for example in terms of expansion and efficiency]
The acquisition is a very strong step forward for FIMER, positioning us as market leader and a global player. I remember when we started to develop inverters in 2007, the lifespan of an inverter was roughly 7-8 years. Today, the lifespan of a platform is less than four years.
We are investing more than 12 percent of our turnover into R&D, so our commitment is very strong. We have three research centres, two in Italy and one in Finland with more than 200 skilled engineers. This focus on research mean we have a strong pipeline of innovation, including the accelerated development of a new three phase string inverter and in 2021 we will also bring three new platforms to market. As such, R&D remain our most important focus and we want to maintain our position as the technology leader that is at the forefront of new solutions and ideas.
What do you think the market will look like in say ten years’ time and in particular your particular corner of it?
The market is moving at pace. In the next year we expect to see a strong increase in storage solutions and miniaturization of products, in response to trends for solutions to become smaller and smaller.
The digital environment will be one of the stronger market trends that we need to respond to, together with increasing use of AI for predictive maintenance. In general, we will see a strong distinction between distributed energy and the centralized model and storage will be one of the stronger players in the market in the next year or so.
Residential, commercial and industrial will see a new trend where every user will become a consumer and producer of energy, that can sell energy into the smart grid.
We are also seeing an emerging trend, the new smart grid, which integrates inverter technology, storage and e-mobility. We are one the strongest players in Europe, but for e-mobility one of our biggest challenges will be to fully integrate our e-mobility solutions with inverter solutions to make a small green environment where we are generating energy thanks to the PV, we are converting the energy, we are storing the energy and we are using the energy in a different way to charge our own electric vehicles.
I would like to underline that FIMER today is a company that is 100 percent involved in sustainability and has transformed its philosophy for the future. We are now a strong player in the energy transition market with the ambition to become the solar sector’s technology leader.
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