The PV inverter market achieved record deliveries in 2019, writes Miguel de Jesus of IHS Markit, driven by booming deliveries in key markets such as the US, Spain, Latin America, Ukraine and Vietnam. Revenue grew rapidly, surpassing the $ 9 billion mark for the first time in 2019.
June 25, 2020
From pv magazine 06/2020
The global competitive landscape for inverters remains relatively consolidated. The top 10 suppliers accounted for more than 70% of worldwide deliveries of PV inverters. As the industry continues to grow rapidly, competition among PV inverter suppliers is expected to escalate due to two key factors: technological advances and the changing balance of global installation growth.
Pushing the boundaries
Several key technology trends offer PV inverter vendors the opportunity to compete more aggressively in a growing industry. For example, suppliers continue to approve larger inverters, in particular three-phase string and central inverters for solar PV systems on a utility scale. In recent years, three phase string inverter suppliers have worked hard to educate customers about the benefits of a distributed architecture for large solar PV systems. Overall, these suppliers have been successful as the penetration rate of string inverters has steadily increased – especially in large commercial projects and small utility-scale installations. Recently, suppliers have launched string inverters in excess of 200kW as they begin to compete for larger system sizes and bid for high-priced, competitive projects.
The same trend is affecting central inverter manufacturers, with leading suppliers posting larger average sizes. Deliveries of larger stand-alone central inverters between 3 MW and 4 MW increased 67% to 15.5 GW, which corresponds to more than a third of the global deliveries of central inverters in 2019. IHS Markit expects deliveries of larger central inverters to increase over the next five years.As central inverter suppliers, they want to compete more aggressively on a cost-per-watt basis while defending themselves against the penetration of larger string inverters into supply-scale systems.
As suppliers continue to push the limits of PV inverter performance, they are turning to new materials and software that can help them take the next leap in technology. For example, suppliers carefully monitor silicon carbide prices, which offer the potential for inverter developers to build even more efficient and high-performance PV inverters. In the meantime, suppliers across the entire system balance segment are waiting for indications of a shift to even higher voltages, especially in supply-scale installations where the standard has quickly risen to 1500 V.
Cyber security and AI
Advanced software and grid functions such as voltage control, frequency control and reactive power at night have become a prerequisite for inverter providers to be selected by system owners to future-proof their solar investments. Advanced software requirements include performing real-time operational and component tests, such as: B. the IV curve diagnosis. These are now increasingly common and are provided by leading providers such as Huawei and Sungrow.
With inverters considered to be the brains of solar systems, advances like artificial intelligence and cybersecurity are at the fore as suppliers seek to make solar systems increasingly adaptable and protective. PV inverter suppliers are realizing that solar inverters will increasingly interact with the grid from residential to utility-scale systems. As a result, it is up to suppliers to implement the highest levels of cybersecurity to ensure that utilities and homeowners are protected from malicious attacks on their energy systems to the highest standards.
Inverter for residential buildings
The residential PV inverter market was the fastest growing type of system, growing more than 50% in 2019. Solar inverter providers who offered single-phase and three-phase inverters with an output of <10 kW in their portfolios in 2019 were able to take advantage of this market opportunity. Leading suppliers of power electronics at the module level (MLPE) such as SolarEdge and Enphase as well as single-phase suppliers such as SMA, Growatt and Ginlong increased deliveries in this segment. Important residential markets such as China, the USA, the Netherlands, Japan and Australia made significant contributions to the growth of global residential complexes. The suppliers of PV inverters have continued their innovations in this segment with aesthetically designed products that are lighter, smaller, more powerful and equipped with new safety features.
The demand for PV inverters in China fell for the second time in a row in 2019 due to declining installations. Although China remains the largest solar market in the world, Chinese suppliers, who previously experienced tremendous growth by supplying their domestic market, are targeting international markets in order to limit the impact of a smaller domestic market and to offset any lost sales and ongoing price pressure. Suppliers based in China increased their international market share by seven percentage points to 38% in 2019.
In particular, they have rapidly expanded their presence in Europe, India, Southeast Asia and Latin America. Chinese suppliers continue to make significant investments to quickly update their products to meet local network and technical requirements, and to set up local sales and service offices. To fuel this expansion, some Chinese suppliers like Ginlong and Sineng have reached out to investors by issuing shares on initial public offerings. The result is an increase in the diversity of the competitive landscape in these regions. The strong growth in new installations in several major solar markets has benefited all providers, including major established providers such as SMA, which have long established themselves in their home market in Germany and across Europe. Another example is Power Electronics, based in Spain, which maintains the leadership position in its home market while also being dominant in capturing the booming growth in utility-scale deliveries in the United States.
Overall, a more diverse group of PV inverter providers will compete in markets around the world and across all system types, from residential to commercial to utility-scale installations. In the short term, strong price pressure will help some providers to defend or increase their market share. In the long term, the industry could see further consolidation, either as suppliers gain and acquire even larger market share, or as suppliers merge or are acquired to build complementary product portfolios.
The views and opinions expressed in this article are the author’s own and do not necessarily reflect those of pv magazine.
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