L R AS Published on Monday 7 September 2020 - n° 330 - Categories:inverters/micro-inverters
The inverter market is less cyclical than the panel market.
The world market for solar inverters reached a record level in 2019 with $9 billion and 130 GW
Two factors explain this record:
the rush to solar equipment before the reduction of the U.S. investment tax credit from 30% to 26%; and the growth of the inverter replacement market in Europe, according to Wood Mackenzie.
In 2019, between 25% and 30% of US PV inverters shipped were purchased for protection purposes: inverters make up a small share of the supply. This means that the price reductions for inverters will be less than the price reductions that could occur for panels (in dollars per watt). There is also the arrival of the end of life of the inverters and the need to replace them.
Above all, the COVID-19 pandemic will not have as serious consequences for the inverter industry as for the solar industry in general. The supply chain is more diversified than that of the panels. The factories are already highly automated and therefore little affected by the health crisis. Logistical problems seem to have been minimal and price increases limited. Overall, the coronavirus pandemic should reduce UPS shipments in 2020 by 14% compared with the forecasts made at the beginning of the year.
Apart from the sale of assets by ABB to Fimer, there are few mergers, acquisitions or exits in the UPS sector. Pressure on prices and a slowing market could result in divestitures or exits from the business.
Chinese inverter manufacturers have expanded their presence abroad from about 30% of world shipments outside China in 2018 to about 40% in 2019. The slowdown in the Chinese market and growing international demand explain the great success of these companies.
In the wake of 2018, UPS vendors have expanded their software and service offerings. They have created internet platforms, developed artificial intelligence and machine learning. These initiatives can create additional sources of revenue and help companies stand out from the crowd.
Reliability and customer focus are top priorities when choosing UPS technology. Some of them have opened customer contact centres.
The next step? In the short term, the health crisis will put a brake on the inverter market. But the general trend remains positive. The demand for inverters will increase as installations continue to expand around the world, systems age and new inverters are needed.
The industry is focused on digitization and customer needs. Inverter players will be driven to innovate and move into non-traditional inverter manufacturing.
GreenTech Media of 26 August