Professional PV inverter manufacturers will face a "life and death" battle

A new report released by GTM Research shows that in the next three years, leading photovoltaic inverter suppliers will be squeezed by global demand shifts, shifts to low-price markets, and regional fluctuations. This change will drive the price of photovoltaic inverters down from a global average of $0.22/W in 2012 to only $0.14/W in 2016 - an average annual decline of ten percent.

GTM Research's report found that as global demand for photovoltaic systems expands, the current top-ranked photovoltaic inverter manufacturers in the market are sharing market share with low-cost competitors from Asia and diversified giants.

Table: GTM Research's Top Ten Most Competitive Photovoltaic Inverter Companies

The ranking of the report is based on key qualitative indicators that measure each company's product offering, bankability and growth prospects. Although professional PV inverter manufacturers are ranked relatively high this year, these companies are facing increasing competitive pressure and declining profits due to oversupply, increasing fragmentation of global PV demand, moving away from the European market, and the commercialization of advanced technologies such as modular power electronics (MLPE).

Figure: Global PV Inverter Classification in 2013

"Although SMA continues to dominate the rankings, its short-term growth will also face challenges as it will compete with emerging low-cost or well-capitalized suppliers," said MJ Shiao, author of the report and senior analyst at GTM Research. "But even so, it will not be easy to overthrow SMA's leading position and achieve global success. Factors such as bankability, reliability and maintainability are transforming from buzzwords to core values. In addition, market demand is rapidly shifting to emerging markets, and their strict barriers will force current photovoltaic inverter companies to reorganize, merge and acquire, or be eliminated."

With the recent liquidation of Satcon Technology's assets, the divestiture of Diehl Controls and Siemens' assets, SMA's strategic acquisition of Zeversolar, and US Advanced Energy's acquisition of Germany's REFUsol, the industry is undergoing a series of changes.

In addition to an insightful analysis of the PV inverter market competition overview, the report also mentions the competitive outlook and ranking of MLPE technology suppliers. Suppliers have seen explosive growth in demand for microinverter and DC optimizer technology, from just 51MW in 2009 to more than 785MW in 2012. Although most of these sales come from residential systems, small and large commercial systems are also beginning to join the camp.

In terms of market shipments and installations, Enphase, SolarEdge and Tigo account for more than 93% of the market share. Enecsys, SolarBridge, PetraSolar and other companies lag far behind. However, as traditional inverter companies such as SMA and Power-One continue to develop and promote their own MLPE products, the ranking of this inverter ranking will change significantly.

Figure: Modular Power Electronics (MLPE) Classification

The report also includes forecasts and analysis of global inverter shipments from 2012 to 2016.

Figure: Global PV inverter shipments from 2011 to 2016 (by scale)

In 2012, major markets continued to clear channel inventory, and shipments in the European market further stagnated. Looking ahead, GTM Research expects shipments to increase in several major emerging markets such as China, Japan and the United States. The report predicts that by 2014, the inverter market will consolidate as struggling inverter suppliers exit the market. Emerging markets will dominate the trend from 2015 to 2016, and GTM predicts that shipments in these markets will surge.