80% market share! A new giant has emerged in the US inverter market

How did SolarEdge and Enphase capture 80% of the U.S. home market? Remember, in 2013, SolarEdge's market share was only 4.5%.

Exit of competitors

SolarEdge's rise is due to the accelerated integration of the inverter market in recent years. Price pressure in the inverter field has caused suppliers to withdraw in recent years, benefiting top companies. In 2013, SolarEdge's inverter market share ranked fifth, second only to ABB, Enphase, SMA and Fronius. In early July, ABB announced on its official website that it would officially withdraw from the photovoltaic inverter business. (Big news! ABB withdraws from the photovoltaic inverter market and FIMER takes over!) This reduces a major competitor for SolarEdge. In addition, Schneider, General Electric (GE) of the United States, Emerson, Siemens and other companies are no longer seen in the market.

With the escalation of Sino-US trade and the US's successive "bans" on Huawei, Huawei also announced its withdrawal from the US inverter market in June 2019. (Huawei withdraws from the US solar inverter market! Will Sungrow and AISWEI benefit?) Huawei accounted for 22% of the global market share in 2018, ranking first among all inverter companies. Its three-phase inverter share in the United States reached 16%, second only to Chint and SMA. Enphase and solaredge, as competitors in the residential market inverter, are expected to become the biggest winners. This is indeed the case. Solaredge currently occupies a very considerable share of the single-phase market, and Huawei could also provide similar solutions.

Suppliers other than SolarEdge and Enphase held more than 67% of the market in 2013. As of the third quarter of 2019, this “other” group had fallen to just 20.3% of the market.

Localization Advantages

According to relevant policies, my country's inverter products exported to the United States are subject to certain tariffs. The profit margins of inverter products are already very slim, plus the transportation costs. Compared with companies such as Sungrow Power Supply and Jinlong, the localized SolarEdge has a greater cost advantage.

It is worth noting that SolarEdge mainly produces micro-inverters and string inverters, and is still not competitive in large-scale ground-mounted power stations. However, due to reasons such as double-reverse and 201, the ground-mounted power stations in the US market are far less popular than household, industrial and commercial rooftop, and community ground-mounted power stations. Therefore, the market for centralized and distributed inverters is not large. SolarEdge has seized the distributed market, which also means that it has gained a solid position in the US inverter market.

Forward-looking layout

SolarEdge uses pairing residential single-phase inverters with DC optimizers as a competitive advantage for its products, while Enphase focuses mainly on the production of microinverters.

Both companies continue to expand their product offerings and have launched home energy platforms in recent years that connect electric vehicles, solar + storage, smart meters and home appliances. Since 2018, SolarEdge has been on a buying spree of e-mobility and battery storage companies to boost its home energy solutions platform. SolarEdge has also built a virtual power plant software product that is compatible with all of the company's inverter technologies and launched an electric vehicle inverter product, StorEdge.

In addition, Enphase has established strategic partnerships with SunPower, LG, Panasonic and Solaria to build its AC module business. A few years ago, Enphase was on the verge of financial collapse, but from 2015 to 2017, the company worked together to reduce costs by 50% and achieve revenue growth.