Navigant Research Blog

As Giants Arrive, Inverter Landscape Shifts

Dexter Gauntlett — August 2, 2012

It’s been said that inverters, despite representing only 8% of the cost of installing a solar PV system, are the source of 80% of the problems when things go wrong.  Fulfilling the primary role of converting DC power to AC power that is compatible with the electric grid and our homes, inverters are increasingly the focus of investment from major corporate players and investors alike.

For the past few years the top four inverter manufacturers – SMA, Power-One, KACO New Energy, and Fronius – have accounted for approximately 60% of global PV inverter shipments.  A new Pike Research report, Inverters for Renewable Energy Applications, concludes that the inverter landscape will look very different by 2017, with a number of new corporate entrants, including the likes of GE, Eaton, ABB, and Siemens, that are expected to leverage their global reach and expertise across many different energy and power electronic applications.

Meanwhile, module level panel management start-ups and early stage companies such as SolarBridge, Enphase, Tigo, Enecsys, and eiQ are raising money and rapidly gaining market share in key markets, giving the market a Wild West feel, particularly in the residential and small commercial segments.  Our new report describes how the following key trends will reshape the inverter market during the next 5 years:

  • In order to retain market share, incumbent inverter manufacturers will have to expand to new markets.
  • Low-cost Asian manufacturers are likely to gain market share, but nowhere near the degree that was witnessed with solar PV modules – at least not within the next 5 years.
  • The growth of the overall solar PV market has greatly increased competition among inverter manufacturers, resulting in companies greatly diversifying product offerings from central and string inverters to microinverters and fully integrated AC panels.
  • The introduction of microinverters to the market has been highly disruptive, and AC modules architecture has the same disruptive potential.
  • The emergence of the domestic Chinese solar PV market will create a major opportunity for Chinese inverter manufacturers to grow market share, as Western companies are expected to have difficulty penetrating that market.
  • The growth of utility scale PV projects will benefit incumbent inverter manufacturers that have seen their market shares shrink in the residential and small commercial sectors.

Based on these key trends, our report concludes the renewable energy inverter market will more than double during the next five years, growing from $7.2 billion in 2011 to $19 billion in 2017.

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