The worldwide PV inverter and module-level energy electronics (MLPE) market breached $9 billion for the primary time in 2019. Inverter shipments additionally hit a report excessive final yr, falling simply wanting 130 gigawatts, in keeping with a brand new evaluation of the inverter market from Wooden Mackenzie.
Along with rising world photo voltaic installations, two components propelled the inverter market to report highs in 2019: The frenzy to safe photo voltaic gear earlier than the stepdown of the US funding tax credit score (ITC) from 30 % to 26 % and the rising inverter alternative market in Europe.
Whereas photo voltaic PV modules had been builders’ first option to qualify for the ITC, additionally they selected to secure harbor PV inverters, albeit at a lesser charge. In 2019, between 25 and 30 % of US PV inverter shipments had been for secure harboring functions.
Builders selected to secure harbor inverters for a number of causes. Firstly, whereas modules made important effectivity positive factors during the last a number of years, with extra enhancements on the horizon, inverters aren’t prone to make such positive factors within the close to time period, and so are perceived to have a decrease know-how danger than modules. Secondly, inverters characterize a smaller proportion of the full price stack, which means that inverter worth declines can be much less worthwhile on a US greenback per watt foundation in comparison with module know-how.
As for Europe, the photo voltaic market took off within the late 2000s and early 2010s. Now, ten years down the road, inverters are beginning to attain their finish of life and want changing. Within the close to time period, Germany, Spain and Italy will prepared the ground for Europe’s inverter alternative market, whereas Asia Pacific will start to select up within the subsequent few years with Japan, Australia and China.
The influence of Covid-19 on the inverter market can be minimal
Covid-19 is not going to have as critical implications for the inverter business because it has had for the photo voltaic business writ massive.
Assorted provide chains helped to dampen the influence. Some services adopted their manufacturing practices to satisfy security tips and different services that already use automation had been much less impacted than those who rely extra closely on labor.
Pricing implications of the pandemic appear to be minimal. Logistical points with transport could enhance prices barely along with private protecting gear and security protocols which were instituted in services.
Total, the coronavirus pandemic is anticipated to cut back inverter shipments in 2020 by 14 % in comparison with pre-coronavirus expectations.
Chinese language inverter distributors proceed to develop their world footprint
Chinese language inverter producers expanded their abroad presence, rising from about 30 % of world shipments exterior of China in 2018 to round 40 % in 2019. China’s market downturn and rising worldwide demand have prompted nice success for these corporations.
Chinese language inverter corporations are usually extra worth aggressive than European corporations and have elevated worth stress globally. Consequently, the market has seen consolidation.
Because the acquisition of ABB’s inverter line by FIMER was introduced in summer time of 2019, there was little information of mergers and acquisitions or exits within the inverter house. However that’s to not say extra is but to come back. Worth stress coupled with the market downturn brought on by the coronavirus, may lead extra exits and acquisitions throughout the subsequent yr.
Software program and providers
As was the case in 2018, inverter distributors continued to increase their software program and repair choices, changing into extra than simply pure-play producers. Distributors have launched internet-of-things platforms, delved into synthetic intelligence and machine studying, and ventured into different good vitality verticals. These strikes can open extra income streams and assist corporations differentiate themselves from the pack.
Reliability and buyer consideration are top-of-mind in choosing inverter know-how, and distributors have reacted to satisfy these concerns. Not too long ago, Enphase launched a web-based retailer to attach extra immediately with shoppers. CPS America introduced it was providing inverter O&M providers to these websites utilizing its inverters in addition to websites that use inverters from producers which have exited the house. And SMA launched its repowering enterprise in early 2019.
What’s subsequent for the inverter business?
Whereas the coronavirus will dampen the inverter market within the near-term, the general pattern for the inverter market is constructive. Demand for inverters can be on the rise as installations proceed to develop globally, and as methods age and extra alternative inverters are wanted.
Because the business focuses on digitalization and customer-needs, inverter gamers be pushed to innovate and department out into non-traditional pure-play manufacturing.
Lindsay Cherry is a photo voltaic analyst at Wooden Mackenzie and writer of a brand new market analysis report on the worldwide photo voltaic PV inverter market.