Solar inverter market hits speed bump in 2011

EL SEGUNDO, USA: Despite strong long-term growth prospects, the worldwide solar 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.

Shipments of PV inverters last year fell to the equivalent of 23.4 gigawatts (GW), down 1 percent from 23.6 GW in 2010, according to an IHS iSuppli PV Inverter Market Tracker report.

The decline in shipments last year was accompanied by a large 15 percent drop in revenue, down to €4.4 billion ($6.1 billion) because of a sharp decline in average selling prices. Prices 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, as shown in the figure.Source: IHS iSuppli, USA.

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 begins to make an impact.

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 is mainly attributed to challenging conditions in the photovoltaics markets in the key countries of Germany and the Czech Republic,” said Greg Sheppard, senior director for PV research at IHS. “Shipments in Germany declined after the industry there stalled, while shipments in the Czech Republic fell off a cliff—after the government in Prague cut tariffs to deliberately slow down an otherwise superheated expansion. Luckily, much of the loss was made up by growth in other markets.”

Inverter shipments in Germany tumbled to 6.1 GW in 2011, down from 9.9 GW in 2010, while shipments in the Czech Republic dropped precipitously to just 55 megawatts (MW), down from 1.5 GW.

China had the largest increase in inverter shipments for the year, reaching 1.6 GW in 2011 from just 691 MW in 2010. The United States was second, climbing to 2.8 GW, up from 1.5 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.

Inverter winners
Germany’s SMA Solar Technology remained the PV inverter market’s dominant supplier 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, Refusol GmbH and Siemens Industry Automation; as well as US 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.

Source: IHS iSuppli, USA.