Inverter sales increase but massive change to location and share
Energized by a surge of shipments in Asia, the global photovoltaic (PV) inverter market in 2012 bucked weak worldwide solar industry conditions to expand by 5 percent and break the $7 billion level for the first time.
Global PV inverter market revenue last year rose to $7.1 billion, up from $6.7 billion in 2011, according to the latest PV inverter market report from IMS Research, now part of IHS Inc, as presented in the attached figure.
"Despite lower PV installation growth and rapid price declines, inverter sales have managed to generate growth, all be it at just low single-digit levels"”a notable achievement amid such weak market conditions in the solar market," said Sam Wilkinson, PV inverter research manager for IHS. "Growth was driven by a strong increase in sales in Asia in the fourth quarter, which managed to offset a sequential decline of more than 20 percent in the Europe/Middle East/Africa region (EMEA). This helped to drive annual shipments to 31 gigawatts (GW) in 2012, up from 27 GW in 2011."
Revenue growth was somewhat restrained by intense price competition and a shift toward more sales in lower-price markets such as China, India and Eastern Europe. These regions tend to prefer larger inverters that have lower prices, driving a significant decline in average blended pricing and resulting in much more modest revenue growth for the year.
Asia was the only major region whose PV inverter revenue grew sequentially in the final quarter of 2012. Quarterly shipments in this region jumped by almost 1 GW, expanding annual shipments by 63 percent compared to the same time in 2011.
This strong growth was caused largely by China and Japan, both of which enjoyed record shipment levels in the fourth quarter.
"China and Japan are expected to account for a growing share of global demand, but these markets are notoriously difficult for non-domestic suppliers," Wilkinson said. "Developing successful strategic partnerships and obtaining local certifications for products will be critical steps required for suppliers to succeed in penetrating these markets."
Demand for PV inverters in Asia will expand by more than 60 percent again in 2013, IHS predicts.
The PV inverter industry in 2012 continued to be dominated by European and U.S. suppliers. However, IHS analysis shows that this landscape is changing rapidly.
With the market shifting to Asia, the position of European suppliers slipped in 2012. The combined market share of the three largest European suppliers fell dramatically, declining to less than 30 percent in the fourth quarter of the year, down from almost 50 percent in the first quarter.
Top 3 suppliers unchanged, but leaders' market share dips in 2012
For the second year running, SMA of Germany; California-based Power-One; and Kaco, also of Germany, were the world's three largest PV inverter suppliers. However, these suppliers' absence from the fastest-growing major markets of Japan and China put their market share under considerable pressure near the end of the year.
"SMA, which once was the undisputed market leader, saw its market share fall below 20 percent in the fourth quarter of 2012," Wilkinson said. "That's the lowest level that we have on record in over six years of analyzing the market. SMA has taken action by acquiring a stake in a Chinese supplier and aggressively targeting the Japanese market, and these are important steps in protecting its leading position in the PV inverter market. However, it remains to be seen if these actions will be aggressive enough as the PV market continues to fragment."
The ranking of suppliers below the three leaders changed significantly.
Four of 2012's largest suppliers made big increases in their rankings: Colorado-based Advanced Energy, Enphase Energy of California, Danfoss Solar Inverters from Denmark and Omron from Japan. These companies all gained at least four places in the rankings.
Just one European supplier in the Top 10"”Danfoss"”was able to increase its global ranking in 2012, reflecting the changing supplier landscape as markets outside of Europe begin to account for a growing share. An Asian supplier and a microinverter supplier also appeared in the Top 10 for the first time in 2012.
