The pace of internationalization of domestic suppliers in the inverter industry is accelerating, and prices may drop by 10% in 2015

Photovoltaic inverters are known as the magicians of solar power generation. They convert the direct current generated by solar cells into alternating current energy that can be directly connected to the power grid and loads through power electronic conversion technology. They are an indispensable core device in photovoltaic systems.

Compared with foreign companies, domestic photovoltaic inverter technology research and development started later and was once troubled by "low quality". Today, domestic leading inverter suppliers have demonstrated the technical accumulation and industrialization capabilities of domestic companies to the international market through continuous technological upgrades.

Recently, the international consulting firm IHS released a report summarizing and predicting the current photovoltaic inverter market in my country.

The price drop in 2015 was about 10%.

Data provided by IHS shows that the price of photovoltaic inverters continued to decline in the first quarter of 2015. In the first quarter, the price per watt of centralized inverters in my country was between 0.20 and 0.28 yuan, while the price per watt of string inverters was between 0.40 and 0.50 yuan.

"Fierce price competition has led to a drop in domestic inverter prices, which fell by about 10% in the first quarter of this year," Xie Feng, a senior analyst at IHS, told the reporter. "Domestic inverter prices are already very low. For example, the price per watt of a 500-kilowatt inverter is already the lowest in the world. So although a 10% drop may not seem like much, there is limited room for further decline. The price dropped by 30% in 2013 and 2014, and we predict that the price drop in 2015 will be around 10%."

IHS also pointed out that the inverter market in my country is currently undergoing consolidation, and some uncompetitive inverter manufacturers in China will gradually withdraw in the future. "At present, the inverter products of Sungrow and Huawei have occupied nearly 50% of the market. In the future, as the consolidation accelerates further, many inverter manufacturers will withdraw," said Xie Feng.

At the 2015 SNEC PV Exhibition, leading PV inverter manufacturers such as Sungrow and TBEA exhibited their latest products. Sungrow launched the SG1000HV centralized inverter with the highest input voltage in China, with a rated output power of 1,000 kilowatts and a DC voltage of up to 1,500 volts. In this regard, IHS predicts that "this type of large centralized inverter will be the future development trend. In the short term, these inverters are mainly used for export, but it is expected that small-scale pilots will also be carried out in China in two years. At the same time, some suppliers are also targeting the ground power station market in the United States and are developing 1,500-volt string inverters."

In addition, compared with 500 kW inverters, 1 MW box transformers are grabbing more market share. "Sungrow and TBEA have developed box transformers of 2 MW and above. The new models have improved energy density, reduced the price per watt and overall LCOE. Previously, 500 kW inverters were more popular, even in large commercial photovoltaic projects," said Xie Feng.

Huge opportunities for international suppliers

IHS pointed out that China will remain the world's largest market in 2015, but there are currently limited foreign inverter suppliers active in the Chinese market.

Data shows that German inverter manufacturer SMA completed the acquisition of a 72.5% majority stake in Chinese inverter company Jiangsu Zeversolar New Energy in 2013. Reporters learned that although this acquisition helped SMA accelerate its operations in the Chinese market, its performance in the Chinese market is far inferior to that in the European and American markets. SMA has also previously admitted that it will significantly reduce its operations in the Chinese market.

"SMA is a leading international inverter supplier, occupying a large share of the European and American markets, but lacks sufficient cases in China, including ABB. Now global demand is gradually shifting to the Asian market, coupled with fierce price competition, if the product does not have a differentiated advantage, it will be difficult to occupy the market share." An industry insider engaged in international market research revealed to our reporter.

In addition, IHS pointed out that Kostal, another German inverter supplier, has entered the Chinese market through its automotive division but has not yet launched its inverter products in the domestic market.

"However, China's rapidly developing solar market remains a huge opportunity for foreign inverter manufacturers," the IHS report said.

Domestic suppliers are accelerating their internationalization pace

IHS also predicts that China's solar market will continue to be hot this year, and many domestic inverter suppliers will continue to expand their overseas markets.

"The United States is the primary target market for domestic inverter suppliers, followed by Asia. Sungrow has released a new single-phase inverter for the U.S. and other international markets; TBEA is very active in Pakistan and India; inverters from JF Power, Omnik and others have a large share of the residential market in Australia," said Xie Feng.

"The pace of domestic inverter manufacturers going global is accelerating, but compared with local domestic companies, my country's inverter manufacturers still need to keep up with their financing capabilities and after-sales services abroad, so that they can gradually occupy a larger share of the international market. With the acceleration of globalization, companies cannot just focus on the domestic market, but should gradually enter the global market that reflects the country's technological strength." The above-mentioned industry insider told our reporter.

The reporter learned that the "Guiding Opinions on Promoting International Capacity and Equipment Manufacturing Cooperation" recently issued by the State Council pointed out that efforts should be made to increase the power going global. In addition to supporting thermal power, hydropower, nuclear power and other industries, it clearly supports Chinese companies to participate in the investment and construction of wind power and solar photovoltaic projects in relevant countries, and promote international capacity and equipment manufacturing cooperation in wind power and photovoltaic power generation. In addition, the "Belt and Road" policy also provides strategic support for domestic companies to go global, connecting the interests of my country and neighboring regions in the two directions of Central Asia and South Asia, and providing a broad stage for the development of enterprises.

"Under such a policy background, it is a wise choice for domestic inverter manufacturers to accelerate their internationalization. However, it is not only necessary to export products, but also to package and export them with technology and services," said the above-mentioned industry insider.