Major players in the future inverter market in the new era: Sungrow, SMA, Sineng, TBEA, Huawei, AP Energy, SolarEdge…

The photovoltaic market has been developing rapidly in recent years, and the market is constantly changing and adjusting. We have collected some analysis data on the photovoltaic inverter market for your reference.

Trends of 37 major global photovoltaic inverter companies

According to data from Wood Mackenzie, the market conditions of the world's major 37 photovoltaic inverter manufacturers from 2012 to 2018 were compiled.

Market reshuffle characteristics

From the market situation in recent years, it can be seen that many photovoltaic inverter companies are gradually losing their competitiveness, and most of them are. Therefore, it can be judged that although it is not as tragic as 90% of inverter companies leaving the market in 2013, the reshuffle of the industry is indeed happening.

The industry summarizes several reasons for the reshuffle of the inverter industry:

1. The top 500 companies once entered the photovoltaic inverter field in large numbers, but almost all of them withdrew. There are several reasons: photovoltaic inverters are their non-core business, and they do not have advantages in technology. At the same time, the decision-making mechanism is slow, and the speed of product replacement cannot keep up with the pace of industry development. Secondly, the top 500 companies often have a near-monopoly position in a certain field, pursue high profit margins, and have high internal costs. Previously, the author once proposed the "node" theory of the photovoltaic industry. In the era of huge profits and when China's photovoltaic technology was backward, these companies could survive well, but as the industry's competitive environment changed, profit margins dropped sharply, and the speed of product replacement greatly accelerated, the exit of these companies can be said to be inevitable.

In fact, it is not just the photovoltaic industry. We have reason to believe that more and more industrial enterprises among the top 500 companies will face similar challenges in the future.

2. The Japanese market is the most conservative and closed in the world. Therefore, Japanese companies are overly influenced by the Japanese market: the overly comfortable business environment makes many Japanese companies lose the motivation to develop overseas, but when the Japanese market declines, the sales of Japanese companies also plummet.

In addition, as the mutual understanding deepens, Chinese inverters are opening up the Japanese market with their advantages of high performance and low price. According to IHS statistics, Huawei's photovoltaic inverters have already rushed to the second place in the Japanese market, and its market share is still rising. At the same time, the second, third and fourth places are taken by Chinese companies Huawei, Sungrow and TBEA respectively.

3. The global manufacturing industry is leaning towards China

It can be seen that, except for a few European companies, the rest of the fast-growing inverter manufacturers are almost all from China. The production plant of the fast-growing SolarEdge is also from Guangzhou Jabil Electronics, while TEMIC's factory is also located in Shanghai and other places.

When the photovoltaic market loses its high-tech halo and moves from the altar to the homes of ordinary people, the market has higher and higher requirements for photovoltaic components and inverters. The market demand is no longer as "warm" as the military or high-tech industries: "performance", "price" and "quality" are indispensable. Currently, only Chinese companies can achieve the ultimate balance of these three. Performance, quality, price, behind them is the rise of China's manufacturing industry.

Professor Jin Canrong of Renmin University of China pointed out a very cruel fact: among the more than 200 countries in the world, no more than 20 countries can really master modern manufacturing. This fact is very important, but it is very cruel. Among the 20 countries in total, the UK was the first to master modern manufacturing, and China is one of them.

Manufacturing brings: scale effect, industrial supporting facilities, innovation speed and capability. Behind all this are the tens of millions of intellectuals and the improvement of the quality of more than one billion citizens cultivated after the resumption of the college entrance examination in China, the industrial accumulation of China's reform and opening up over the past 40 years, and the unremitting struggle of the Chinese people.

But even in China, the regions that can control manufacturing are only concentrated in the Yangtze River Delta and the Pearl River Delta.

4. The unmanned territory of first-mover companies and the latecomer advantages of competitors

SMA and KACO are well-respected established photovoltaic inverter companies, but judging from the data, the performance of these companies has remained basically the same or even slightly declined.

This decline not only represents a decrease in market share, but also means that with inverter profit margins getting lower and lower, the money that can be earned from a single-watt inverter is far less than a few years ago. As a result, SMA has been in a loss-making situation for several consecutive years.

The reasons for this situation are complex. First, Europe's own manufacturing industry has high costs and the products it produces are not irreplaceable. Second, the product that users ultimately obtain is electricity rather than "Made in Europe" itself. But at the same time, SMA has always been on the leading path, paving the way for latecomers and laying the foundation, and is "the one who carries firewood for everyone."

To this end, SMA spent a lot of money on research and development, but with the vigorous development of China's photovoltaic application market, Chinese inverter companies have also achieved large-scale application and rapid improvement. In this process, both the cost and the speed of upgrading are much faster than European companies.

So it’s not that the first-mover companies are lagging behind, but that the late-mover companies are too competitive.

Major players in the new era

2020 is the parity bottom line for China's photovoltaic industry. Due to the high non-photovoltaic costs, China has become one of the last few regions in the world to achieve parity. China's achievement of photovoltaic parity can also be regarded as a new era for global photovoltaics. So in this new era, which major inverter players will be active? What will be their future trends?

Sales growth rate can be regarded as the only indicator of the market and development potential of photovoltaic inverter manufacturers. In 2018, due to policy influence, the Chinese market fluctuated too much, so for Chinese inverter manufacturers, it would be a victory if there was no big decline in 2018. 2018 was also the year of the explosion of foreign markets, but many foreign inverter companies did not achieve better performance. No improvement means a decline in market share, which can be regarded as a slight setback.

Future inverter major players:

Full power companies: Sungrow, SMA, Ingeteam

High-power enterprises: Sineng, TBEA, TEMIC

Small and medium-sized power enterprises: Huawei, SolarEdge, Jinlong, GoodWe, Growatt, Chint, Flimer, Fronius, Power Electronics, Delta, Sofar, Sanjing, Shengnengjie

Micro-inverter: Enphase, APSON

2019, new forms of global inverter industry

We believe that as market competition intensifies, the above companies will continue to differentiate. So, who will win in the future?

According to the above summary, the future photovoltaic inverter industry will be like photovoltaic modules, with manufacturing almost all concentrated in China. Even if there are foreign brands that survive relatively well, they will choose to carry out localized manufacturing and management in China.

At present, there is still a lot of room for technological progress in photovoltaic inverters, so companies that are in a corner may still live a relatively comfortable life in the short term, but they will eventually face strong foreign competitors to eat into their market. Taking the Japanese market as an example, as shown in the figure, among the top five inverter companies, Huawei, Sungrow Power Supply, and TBEA ranked second, third, and fourth respectively. Huawei occupies nearly one-fifth of the Japanese market, and the three companies together occupy 46.7% of the Japanese market. Just a few years before this, Japan had closed its doors to Chinese inverter manufacturers, and TEMIC occupied half of the ground power station market.

The market will eventually return to its value itself. Photovoltaic companies must be prepared for danger in times of peace, constantly adjust their direction, strengthen their advantages, and make up for their shortcomings in order to ultimately win.

Outlook for 2020: EPC exports along with inverters

2018 was the first year of great development of China's photovoltaic industry overseas. Many photovoltaic companies went overseas to explore markets. For example, in the Vietnamese market, companies such as Sineng Electric followed the EPC companies of central enterprises such as China Energy Engineering and China Power Construction to go overseas and achieved good results in 2019.

However, with the further development of overseas markets, this situation may change in the next stage: from component manufacturers following EPC companies to inverters and EPC companies promoting each other and driving the development of the entire industry.

China's photovoltaic inverter industry is ushering in a dominant position like China's photovoltaic modules. Unlike the strong consistency of module products, when selling inverters, it is often necessary to discuss solutions with the owners in depth, especially for large-scale ground power station projects. Therefore, inverter companies often have closer contact with owners.