On Tuesday (July 17) Yaskawa Electric Corporation announced that it had wholly acquired U.S. solar inverter manufacturer Solectria Renewables giving the Japanese company a Top 10 position in two of the largest photovoltaics (PV) markets worldwide.
Yaskawa recently became a major supplier in the Japanese domestic PV inverter market holding a 6 percent market share in the country and 2 percent of the global market. Solectria was ranked as the fifth largest supplier in the U.S. PV inverter market in 2013. The acquisition makes Yaskawa the 11th largest supplier in the world with 3 percent of the global PV inverter market based on 2013 revenues.
“By acquiring Solectria, Yaskawa will obtain the unique position of being the only supplier with a top-ten ranking in the United States and Japan, the two largest PV inverter markets,” said Cormac Gilligan, Senior Analyst for solar at IHS. “By developing products targeted at the booming market for commercial roof-top PV systems in Japan, Yaskawa has steadily grown its market share to be the fifth largest supplier in its domestic market. Yaskawa’s core product is a 10 kW inverter targeted at the small commercial market in Japan, which is forecast to grow 75 percent to reach 5 GW in 2014.”
IHS forecasts that Japan will be the largest PV inverter market worldwide in 2014, worth $2.2 billion, and the U.S. will be the second largest PV inverter market in 2014 worth $1.3 billion.
Positioned for future growth
To date, Yaskawa has been almost completely reliant on its domestic market. However, its acquisition of Solectria marks a huge international expansion which will offer it high potential for growth and safeguard against the risks of relying on a single end market.
There is very limited overlap in the inverter portfolios of the two companies. Solectria’s main strength was in large central inverters whereas Yaskawa’s focus has been on smaller three-phase inverters, particularly 10 kW models. The acquisition now means that Yaskawa will be very well placed to compete in intensely competitive commercial and utility-scale markets in the United States as it adds its bankability and scale with Solectria’s in-depth knowledge of the local market. IHS forecasts that U.S. PV inverter market will grow by 41 percent over the next 3 years to reach $1.7 billion.
“Yaskawa’s two key target markets are both set for rapid growth in 2014: The small commercial market in Japan is forecast to grow by 75 percent in 2014, and the entire U.S. market is forecast to grow by 52 percent,” Gilligan said. “This is likely to catapult Yaskawa into the 10 largest suppliers globally in 2014. Its strong position in two key markets, bankability and scale also makes it very well places to expand and capitalize on new opportunities in other growth markets.”