.Inverter Prices to Fall
The global market revenue for PV inverters will contract by 9% by the end of 2013, damaged by drastic price falls driven by an intensely cost-sensitive market.
Although PV inverter shipments have risen to 34.2 GW in 2013, IMS forecasts an 11 percent drop in average global inverter prices for the year. This will pose significant challenges for suppliers as shrinking profit margins coincide with growing competition due to a fragmenting supplier base.
As existing and new inverter suppliers expand their presence in the world's PV markets, the market share of the top 10 suppliers has fallen from 2010's 66 percent to 57 percent in 2012. Several recent major acquisitions - ABB's acquisition of Power-One in April, Advanced Energy's acquisition of Refusol in April and SMA's majority purchase of Zeversolar in December 2012 - have had no real effect on the market.
As the solar inverter price pressures move along the solar supply chain, inverter manufacturers are now being charged with absorbing the costs. And in a crowded market already depressed by the elimination or expiration of government solar subsidies, inverter manufacturers have had little choice but to lower their asking solar inverter prices.
Innovation Becomes a Necessity
Under the intense price pressure, inverter suppliers are becoming more innovative in how they can create savings and value for their customers. Many suppliers are releasing new inverters with advanced features or new designs, while inverter manufacturers are releasing new outdoor-rated and turnkey products. And inverters are continually being released that are rated at 1,000 voltage direct current (Vdc) or greater in order to allow longer strings and reduce DC cabling.
Although the upfront capital cost of inverters that can handle 1000Vdc or greater is higher, there are many other benefits for customers, such as reduced upfront balance of systems costs and increased energy harvest, as cable losses are lessened.
New markets for inverter manufacturers
Europe's heavyweight solar markets, chiefly Germany and Italy, have either removed or vastly reduced government subsidies, heaping further price pressure on inverters. IHS predict that combined inverter shipments to these countries will retract by more than 50% this year, falling to just 5.7 GW ordered, compared to 11.5 GW in 2012.
Growth Opportunities
Some growth opportunities exist for suppliers in certain segments and regions, and this will contribute to a 2014 recovery and double-digit growth moving forward. Revenues are predicted to grow by 11 percent to reach $7.3 billion next year.
There's going to be upside potential in 2014 and onwards where the market will recover - opportunities in the U.S.'s smaller string inverter market and in Japan's utility-scale market. Inverter suppliers will have to establish themselves in new markets and carefully select which ones they enter. If they do so, there will be plenty of opportunities for them. But the idea is that they would enter these markets quckly and establish themselves early in order to reap those benefits.
The global market revenue for PV inverters will contract by 9% by the end of 2013, damaged by drastic price falls driven by an intensely cost-sensitive market.
Although PV inverter shipments have risen to 34.2 GW in 2013, IMS forecasts an 11 percent drop in average global inverter prices for the year. This will pose significant challenges for suppliers as shrinking profit margins coincide with growing competition due to a fragmenting supplier base.
As existing and new inverter suppliers expand their presence in the world's PV markets, the market share of the top 10 suppliers has fallen from 2010's 66 percent to 57 percent in 2012. Several recent major acquisitions - ABB's acquisition of Power-One in April, Advanced Energy's acquisition of Refusol in April and SMA's majority purchase of Zeversolar in December 2012 - have had no real effect on the market.
As the solar inverter price pressures move along the solar supply chain, inverter manufacturers are now being charged with absorbing the costs. And in a crowded market already depressed by the elimination or expiration of government solar subsidies, inverter manufacturers have had little choice but to lower their asking solar inverter prices.
Innovation Becomes a Necessity
Under the intense price pressure, inverter suppliers are becoming more innovative in how they can create savings and value for their customers. Many suppliers are releasing new inverters with advanced features or new designs, while inverter manufacturers are releasing new outdoor-rated and turnkey products. And inverters are continually being released that are rated at 1,000 voltage direct current (Vdc) or greater in order to allow longer strings and reduce DC cabling.
Although the upfront capital cost of inverters that can handle 1000Vdc or greater is higher, there are many other benefits for customers, such as reduced upfront balance of systems costs and increased energy harvest, as cable losses are lessened.
New markets for inverter manufacturers
Europe's heavyweight solar markets, chiefly Germany and Italy, have either removed or vastly reduced government subsidies, heaping further price pressure on inverters. IHS predict that combined inverter shipments to these countries will retract by more than 50% this year, falling to just 5.7 GW ordered, compared to 11.5 GW in 2012.
Growth Opportunities
Some growth opportunities exist for suppliers in certain segments and regions, and this will contribute to a 2014 recovery and double-digit growth moving forward. Revenues are predicted to grow by 11 percent to reach $7.3 billion next year.
There's going to be upside potential in 2014 and onwards where the market will recover - opportunities in the U.S.'s smaller string inverter market and in Japan's utility-scale market. Inverter suppliers will have to establish themselves in new markets and carefully select which ones they enter. If they do so, there will be plenty of opportunities for them. But the idea is that they would enter these markets quckly and establish themselves early in order to reap those benefits.