IHS warns of decline in European inverter market
SMA's full year financial results have reinforced IHS' previous predictions of a major decline in the European PV inverter market. IHS estimates that PV installations in Europe declined by 37% in 2013. This slump in demand ignited a severely competitive price war which led to European PV inverter market revenues declining by a huge 46% to $2.1 billion. Europe accounted for 33% of the global inverter revenues in 2013, compared to nearly 60% in 2012.
Although SMA weathered this storm better than many of its smaller European competitors, some of which have exited the market during the last 12-18 months, its share of the global PV inverter market fell to approximately 17% in 2013. SMA's market share had previously stood close to 40% in 2009, but has now declined for five consecutive years. Its lead over the second largest supplier (Power-One/ABB) has narrowed by 4 percentage points compared to 2012.
In order to remain the number-one supplier, it is critical for SMA that it delivers on its promises of cost reduction and expansion into China, Japan and other emerging markets that will offer growth opportunities in the future. Many of its plans in this area are tied to its recent M&A activity. However, Zeversolar remains a loss-making asset, and although its newly formed relationship with Danfoss will enable savings through greater component purchasing power, further cost reductions through technological improvements are unlikely to be significantly improved by the merge.
IHS expects China and Japan to account for 44% of PV installations in 2014 and 35% of inverter revenues. SMA currently has a very minor position in both of these markets.
2014 will be a critical year for SMA and all other European PV inverter suppliers. Global PV inverter revenues are forecast to grow by 5%. However, to be able to grow in line with this, suppliers will need to overcome many challenges in entering new markets and cope with continued price pressure."
