The market center of gravity shifts eastwards, and PV inverter shipments fall for the first time in seven quarters

According to the latest research report from professional industry research organization IHS, affected by the decline in demand in the European market, global solar inverter shipments fell 5% year-on-year to 8.3GW in the second quarter of 2013, the first decline since the third quarter of 2011. According to the report titled "Global Photovoltaic Inverter Market in 2013", given the gradual shift of the market focus to the cheaper Asian market and price erosion in the European market, global photovoltaic inverter shipments fell 10% month-on-month to 8.3GW in the second quarter. The decline in shipments and prices together led to a 18% year-on-year decline in photovoltaic inverter revenue in the second quarter to US$1.6 billion.

Cormac Gilligan, senior PV market analyst at IHS, said: "The decline in inverter shipments in important European markets such as Germany and Italy has exceeded expectations. It is expected that the inverter market size in some of these countries will decrease by more than 70% this year."

“Some inverter suppliers have been very dependent on traditional large markets, but now inverter suppliers are deploying new markets to expand their market share in high-growth countries such as China, the United States, Japan and India.”

Golden Sun project boosts Chinese market

IHS said that in the second quarter, China's inverter shipments increased significantly, reaching 2GW. IHS said that driven by the Golden Sun project, Chinese manufacturers were eager to complete the project construction.

Gilligan said: "Although China's inverter shipments almost tripled in the second quarter, the Chinese market is still dominated by local suppliers. Although the market size is huge, it is still challenging for overseas suppliers. In addition, the price of Chinese inverters fell by 14% to as low as $0.07 per watt.

European market "gradually losing ground"

As the center of gravity of the market shifts to the East, the European inverter market is gradually “eclipsed”. In the second quarter of 2013, only three European inverter suppliers were among the top ten global suppliers (ranked by market share), while last year they accounted for half of the market.

Gilligan pointed out: "Delays in inverter certification for individual PV markets, declining sales and barriers to opening new markets are posing severe challenges to European inverter suppliers. In addition, foreign competitors such as Chinese suppliers and increasingly competitive inverter prices in the market will further exacerbate the decline in sales."

EMEA market demand reduction

According to the report, in the first half of 2013, the shipment of photovoltaic inverters in Europe, the Middle East and Africa (EMEA) fell by more than 40% to 6GW compared with 10GW in the same period last year. IHS said that the average price of inverters worldwide is continuing to fall. Compared with the first quarter, the price fell by 10% in the second quarter, mainly due to the gradual decline in costs in the Asian market and price erosion in mature solar markets. Based on this, in the second quarter, the global inverter sector revenue fell by 18% year-on-year to US$1.6 billion.

The European market suffered the most from the price drop. In the second quarter, sales of inverters in Europe fell by more than 50 percentage points, with markets such as Germany and Italy falling by more than 60%.

Outlook

According to IHS forecasts, inverter shipments will grow significantly in the second half of 2013, with annual shipments expected to reach 34.5GW. In addition, the vast majority of inverter demand will still come from the United States and Asia, which will put pressure on inverter suppliers that have no foundation in the Chinese and American markets.

IHS said that given the shift in market focus, it is expected that inverter suppliers (especially Chinese and Japanese companies such as Sungrow, Omron, Tabuchi and TMEIC) will see a significant increase in market share in 2013, while European suppliers will continue to lose market share.