Photovoltaic Inverter Market Suffered Slight Setback in 2011

30 January 2012

The worldwide photovoltaic (PV) inverter space dipped slightly in 2011 as two big solar markets stalled or cut tariffs, even though overall losses in the industry were mitigated somewhat by growth in other parts of the world, according to an IHS iSuppli PV market tracker report from information and analysis provider IHS.

Shipments of PV inverters last year fell to the equivalent of 23.4 gigawatts (GW), down 1 percent from 23.6 GW in 2010. The decline in shipments last year was accompanied by large 15 percent drop in revenue, down to $6.1 billion (€4.4 billion), because of a sharp decline in average selling prices. Prices had plunged a steep 14 percent during the year much worse than earlier forecasts predicting only a 10 percent contraction.

Nonetheless, inverter shipments are expected to return to positive territory this year with a projected 5 percent increase to 24.5 GW, to be followed by three more years of successive expansion. And while revenue will still decline in 2012, the retreat will ease to just 3 percent, after which growth is expected to return and then climb to the 20 percent range by 2014 as demand from new markets becomes more impactful.

Inverters are devices that convert the energy of the sun captured by solar panels into a usable form of electricity eventually fed back into the electrical grid. The slump in 2011 inverter shipments could be mainly attributed to a contraction in Germany and the Czech Republic, two key players in the market. Shipments in Germany fell from 9.9 GW to 6.1 GW after the industry there stalled, while shipments in the Czech Republic fell off a cliff dropping precipitously from 1.5 GW to just 55 megawatts (MW) after the government in Prague cut tariffs to deliberately slow down an otherwise superheated expansion.

Luckily, the loss was made up by growth in other markets. China had the largest increase in shipments, reaching 1.6 GW from just 691 MW. The United States was second, climbing from 1.5 GW to 2.8 GW. Both countries, along with Japan, will represent the largest absolute growth in inverter opportunities this year. France and Italy also did well in 2011, but both markets are expected to run into stiffer headwinds in 2012 as government authorities recalibrate tariffs and cap installations for the time being to decelerate growth.

Other territories expected to post significant increases in 2012 are India, as well as emerging markets in Asia, Latin America and the collective region of Europe, Middle East and Africa known as EMEA.

Germany’s SMA Solar Technology remained the PV inverter market’s dominant player in 2011, with 31 percent of the worldwide space in terms of megawatts. California-based Power-One was the second largest brand with 12 percent market share, and it also was the top competitor in Italy.

The rest of the Top 10 included three other companies from Germany Kaco New Energy, Refu Solar Electronics and Siemens Industry Automation; as well as U.S. firm Satcon Technology Corp. from Massachusetts; Fronius International GmbH from Austria; Ingeteam Energy from Spain, Elettronica Santerno from Italy; and Danfoss Solar from Denmark. Together the Top 10 accounted for 75 percent of the inverter market.

A variety of products continued to be introduced to the market last year, with many companies supplementing their ground segment offerings with new models featuring grid-friendly features and water cooled power stations. Other notable product developments saw support for German low-voltage requirements, more lower-wattage three-phase products, improved monitoring with wireless communications and better interoperability with other systems.

To maintain success moving ahead, inverter companies must either stay geographically focused or be prepared to invest where demand materializes around the globe. Europe is going to slow as the major solar countries there adjust to new policy growth corridors, while new geographic markets in the Americas, Asia, and Eastern Europe/EMEA will contribute most of the available opportunities for near-term expansion.

Read More > PV Inverters: Surviving the Storm

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