Global PV inverter revenues decline – a quiet Germany to blame

UK: The PV inverter market declined once again in Q3’11 with industry revenues in Euros falling by over 20 percent year-on-year according to the latest quarterly report from IMS Research.

A lethargic quarter in Germany was the main contributor where third quarter revenues were over 50 percent down compared to Q3’10. Although this is a dire statistic for the industry to consider, a positive is that prices stabilised in the third quarter, a welcome relief for suppliers that have had to endure heavy price erosion since the turn of the year. However, average prices are still 15 percent lower than in 2010.

According to IMS Research, the market was limited by the lack of activity in Germany where shipments were over 1 GW lower than in Q3’10, contributing to global shipments being 8 percent down year-on-year. Shipments had still grown for the last two consecutive quarters, however revenues decreased because of falling prices. Although Q3’11 shipments failed to hit 2010 quarterly levels, prices stabilized during the quarter, indicating a healthier level of inventory in the market.

IMS Research’s quarterly PV Inverter Supply & Demand report, which collects revenue and shipment data from more than 90 percent of the industry, shows that exchange rates were also a contributing factor to revenue and price changes in Q3.

“The majority of inverters are still sold in Europe where the average price per watt stabilised last quarter if measured in Euros. However, companies from outside the Eurozone realizing their revenues in dollars may still have felt the price pressure as Dollar prices fell by 5% compared to Q2’11 due to changes in exchange rates”, commented Tom Haddon, PV market analyst at IMS Research. “Price pressure will continue to be a prominent feature of the market for some time and it wouldn’t be wise for PV inverter suppliers to count on prices staying at this level for long,” added Haddon.

Despite the sluggish performance of the German market in Q3, market leader SMA Solar Technology’s market share held stable at over 30% of revenues due to an increased focus on ‘foreign’ markets. “Whilst SMA has always been strong in its domestic market, it is now turning its attentions to the faster growing emerging markets, with the Americas becoming a larger proportion of its business. In order to maintain or increase market share this strategy will need to continue”, concluded Haddon.

Despite declining shipments in Q3’11, IMS Research forecasts that annual inverter shipments will still grow in 2011 and break the 25 GW mark as new incentives in Asia and an end of year rally in Germany (before the January 1st FIT cut) help to stimulate demand.