Market Overview

Solar PV Inverter Market is anticipated to reach USD 9.57 Billion in 2023, Demonstrating a consistent growth pattern. The market is projected to expand steadily, the market is expected to attain a value of USD 26.95 Billion by 2033, demonstrating a Compound Annual Growth Rate (CAGR) of 8.9% over the forecast period from 2024 to 2033.

SOURCE: We Market Research

A solar PV inverter, also known as a photovoltaic inverter, is a crucial component in a solar power system. Its primary function is to convert the direct current (DC) electricity generated by solar panels into alternating current (AC) electricity that can be used to power homes, businesses, and the electric grid. Solar panels generate electricity in the form of direct current (DC). However, most of the appliances and the electricity grid operate on alternating current (AC). The solar PV inverter converts the DC electricity from the solar panels into AC electricity.

In addition to converting DC to AC, inverters also regulate the voltage to ensure that it matches the requirements of the electrical grid or the connected devices. This helps maintain a stable and usable power supply. Many advanced solar inverters employ MPPT technology, which optimizes the performance of solar panels by adjusting the electrical operating point to maximize power output.

Grid-tied solar PV inverters are designed to synchronize with the electrical grid. They feed excess electricity generated by the solar panels back into the grid when the system produces more power than is needed on-site. This allows users to receive credits or compensation for the surplus energy. Modern solar inverters often come with monitoring capabilities, allowing users to track the performance of their solar power system. Some inverters can communicate data to online platforms, enabling remote monitoring and management.

Solar PV inverters come in various types, including central inverters for large-scale installations, string inverters for residential and commercial systems, microinverters attached to individual solar panels, and power optimizers that enhance the performance of solar panel strings. The choice of inverter type depends on the specific requirements and design of the solar power system.

Market Scope

Solar PV Inverter Industry: Drivers & Restrains

Market Drivers

Technological advancements - Technological advancements are injecting steroids into the solar inverter market, propelling it to new heights during the forecast period. Beyond simply converting DC to AC, modern inverters are evolving into smart brains for solar power systems, boosting efficiency, reliability, and grid integration. Traditional MPPTs were static, leading to missed energy peaks. AI-powered MPPTs learn from weather patterns and solar panel behavior, dynamically adjusting voltage and current to squeeze every watt from the sun, even in fluctuating conditions. Companies like SolarEdge and SMA are leading the charge. Microinverters and Power Optimizers solutions address shading issues, where even partial shadowing can drastically reduce panel output.

By individually optimizing each panel, they minimize losses and increase overall system efficiency. Enphase and Tigo Energy are prominent players in this space. Inverters are becoming hubs for managing power consumption, generation, and storage. They can connect with smart appliances, batteries, and the grid, optimizing energy use and maximizing self-consumption. SolarEdge, Fronius, and Schneider Electric are strong contenders in this arena. Replacing traditional silicon with SiC in inverter components reduces losses and enables higher switching frequencies. This translates to smaller, lighter, and more efficient inverters with extended lifespans and improved heat dissipation. Companies like ABB and Mitsubishi Electric are spearheading this shift. Inverters are becoming self-aware, equipped with intelligent monitoring systems that detect potential issues and notify users for preventative maintenance. This reduces downtime and increases system reliability. SMA and Fronius are at the forefront of this trend.

Growing awareness of the benefits of solar energy - Climate change concerns are taking center stage, and solar energy shines as a beacon of hope. People are becoming increasingly aware of its role in reducing greenhouse gas emissions and mitigating climate impacts. This environmental consciousness is driving a desire for sustainable solutions, making solar power a top contender for homes and businesses. The recent IPCC report highlighting the urgency of reducing carbon emissions has reignited public interest in renewable energy solutions. This awareness boost is translating into increased inquiries about solar installations, directly impacting the demand for inverters, thereby creating a smoother base for the solar PV inverter market.

Solar energy isn't just good for the planet; it's good for wallets too. With energy prices skyrocketing, people are realizing the long-term economic benefits of solar power. Lower electricity bills, energy independence, and even potential income from selling excess electricity back to the grid are all turning heads. Rising natural gas prices across Europe have spurred a surge in residential solar installations. In Italy, for instance, inverter sales jumped by 50% in the first half of 2023 compared to the same period in 2022, directly driven by energy cost concerns.

Market Restrains

High Initial Investment Cost - The cost of a solar inverter, along with panels, installation, and other components, can easily reach several thousand dollars, depending on system size and technology. This significant upfront investment can be daunting for individuals and even small businesses, especially in cost-sensitive regions. In Kenya, where solar power offers great potential for off-grid communities, the high initial cost of equipment, including inverters, is a major barrier to adoption. Many families simply cannot afford the upfront investment, despite recognizing the long-term benefits of solar energy. When compared to the traditional grid connection, which often involves only monthly electricity bills, the initial cost of solar can seem prohibitively high. This short-term financial comparison often overlooks the long-term savings on electricity bills and potential income from selling excess power to the grid.

Solar PV Inverter Segmentation

Market- By Type Analysis

By Type, the Solar PV Inverter Market is Categories into Central Inverter, String Inverters, Microinverters and Power Optimizers. The Central Inverter segment accounts for the largest share of around 45% in 2022.

Central Inverters are traditionally the most common type of inverters, used in large-scale solar power plants and some commercial installations. They are known for their high efficiency and affordability, but they lack the flexibility and individual panel optimization capabilities of newer technologies. The following segments are part of an in-depth analysis of the global market for Solar PV Inverter:

Solar PV Inverter Industry: Regional Analysis

Asia-Pacific region stands tall as the undisputed champion, claiming a whopping 45% of the global solar PV inverter market share. The Asian giant holds the title of the world's largest producer of solar energy, and its ambitious renewable energy targets translate to a massive demand for inverters. Supportive government policies like feed-in tariffs and subsidies act as catalysts for solar installations, further propelling the inverter market. This region houses several leading inverter manufacturers, known for their competitive pricing and efficient production practices.

North America, particularly the United States, is witnessing a remarkable surge in solar energy adoption. Increased focus on green energy policies at both federal and state levels is incentivizing solar installations. Advancements in inverter technology, like AI-powered MPPT and smart grid communication, are making solar systems more efficient and attractive. Rising electricity costs are prompting homeowners and businesses to explore alternative energy sources, with solar power becoming a viable option, thereby propelling the solar PV inverter market.

Europe remains a significant region in the solar PV inverter market. The European Union's ambitious REPowerEU plan aims to accelerate the transition to clean energy, with solar power receiving a major focus. Developed grids and established solar markets provide a strong foundation for inverter integration and growth. European manufacturers are at the forefront of inverter technology development, contributing to market growth through cutting-edge solutions.

Competitive Analysis

The Solar PV Inverter Market is dominated by a few large companies, such as

·         Huawei Technologies Co., Ltd.

·         SMA Solar Technology AG

·         ABB Group

·         SolarEdge Technologies Inc.

·         Fronius International GmbH

·         Enphase Energy Inc.

·         Schneider Electric SE

·         Delta Electronics, Inc.

·         Sungrow Power Supply Co., Ltd.

·         KACO new energy GmbH

·         Others

Recent Developments:

·         In November 2023, leading Chinese inverter manufacturer Sungrow announced a definitive agreement to acquire Kenowatt Energy, a US-based energy storage and inverter solutions provider. This move strengthens Sungrow's US presence and expands its product portfolio into energy storage.

·         In September 2023, industrial giant Schneider Electric completed the acquisition of InnovX Solar Technologies, a Canadian manufacturer of microinverters. This acquisition broadens Schneider Electric's solar offering and provides a foothold in the microinverter market.

·         In December 2023, SMA Solar Technology has entered into a partnership with Google Nest to integrate its Sunny Boy inverters with the Google Nest Thermostat and Google Home app. This integration allows homeowners to monitor and control their solar energy production and consumption through their existing smart home system.

·         In October 2023, Fronius International introduced the Tauro X Hybrid inverter, a high-voltage solution for residential energy storage applications. This product combines inverter and battery management functionalities in one unit, simplifying home solar installations.

·         In August 2023, Huawei launched the SUN2000-100KTL-M1, a 100kW string inverter designed for large-scale commercial and industrial solar projects. This high-efficiency inverter boasts enhanced grid compatibility and AI-powered optimization features.