Rolled-up inverters, the market is not simple

In May, the Shanghai SNEC Photovoltaic Exhibition met with the industry again after two years. With 500,000 people registered, more than 3,100 companies attending, and an exhibition area of ​​270,000 square meters, this year's SNEC has undoubtedly become the largest in history.

The popularity of the exhibition undoubtedly represents the prosperity of the industry. However, the information reflected in the exhibition is also worrying. More than one company, including many leading companies, have expressed concerns about the current expansion trend in the industry. The storm of overcapacity may soon come.

Liu Yiyang, deputy secretary-general of the China Photovoltaic Industry Association, revealed that the effective production capacity of the entire photovoltaic industry chain is expected to reach more than 700GW by the end of this year. Even with the most optimistic estimates, China's new photovoltaic installed capacity in 2023 will be only more than 100GW, while the global new photovoltaic installed capacity is about 400GW.

In the photovoltaic market, the main material system of "silicon material-silicon wafer-battery cell-module" has attracted much attention, but the auxiliary material market represented by inverters is also undercurrent.

On the one hand, facing the inward-looking photovoltaic market, inverter companies are also actively planning and expanding production; on the other hand, due to their advantages in power electronics products, many inverter companies have begun to enter the hot energy storage track.

What’s the next step for inverter companies?

Hot market

Just as more attention is focused on a large number of companies crossing over to photovoltaics and energy storage, as well as many companies eager to go public, the inverter market has also welcomed many new players.

Recently, Suzhou Haipeng Technology Co., Ltd. announced the completion of over 100 million yuan in Series B financing. The company focuses on the research and development and manufacturing of distributed photovoltaic inverter products and smart energy management systems.

This is just the tip of the iceberg of the hot inverter market in recent years. In addition to raising a large amount of funds in the primary market, some companies have already started the process of rushing to go public.

Recently, the Shanghai Stock Exchange's official website showed that AISWEI Technology Co., Ltd. disclosed its prospectus filing on the Shanghai Stock Exchange's Science and Technology Innovation Board. AISWEI is mainly engaged in the research and development, production and sales of new energy power technology products. Its main products include photovoltaic grid-connected inverters, energy storage inverters and smart charging piles. Inverters are the absolute mainstay of its revenue.

In 2020, the world has ushered in a "dual carbon" wave, and the era of great development of new energy has completely arrived. As a core supporting link, the inverter industry has also ushered in a historic opportunity. The six inverter A-share listed companies covered by Shenwan Industry achieved a total net profit attributable to their parent companies of 6.277 billion yuan in 2022, an increase of 132.5% over 2021; in the first quarter of this year, the six companies achieved a total net profit attributable to their parent companies of 2.499 billion yuan, a year-on-year increase of 274.5%.

Since 2020, many inverter companies have been successfully listed on the A-share market. In addition to some new players and cross-border companies, even PV module companies such as Canadian Solar have begun to get involved in inverters. Canadian Solar said on June 19 that the commercial and industrial inverters independently developed last year have been put into mass production.

"At present, the competition in the inverter market has become fierce," Han Guang, director of photovoltaic solutions at Hopewind Electric, told reporters.

Founded in 2007, Hopewind Electric focuses on the research and development, production, sales and service of new energy and electric drive products. As one of the most competitive electrical companies in the domestic new energy field, Hopewind Electric provides photovoltaic full-scenario system solutions for diversified markets such as household, industrial and commercial, and centralized.

"Faced with the current complex and ever-changing market environment, what inverter companies need to do is to maintain their own composure, continue technological innovation, and launch better products." Han Guang said, "Hopewind Electric has established five major R&D and manufacturing bases in Shenzhen, Suzhou, Xi'an, Dongguan, and Heyuan."

It is not new for inverter companies to deploy energy storage. At the SNEC in 2023, almost all inverter companies launched "solar energy storage integration" products.

"In the field of energy storage, Hopewind provides 50kW~3.45MWPCS, 1MW~6.9MWPCS all-in-one machines, EMS energy management systems with customizable software and hardware, and container battery energy storage systems with standardized design solutions, which are widely used in power generation, grid, user, microgrid and other scenarios." Han Guang said, "Among various energy storage markets, Hopewind still focuses on large-scale storage and industrial and commercial, aiming at the future market explosion."

The power generation and grid-side energy storage market started the earliest in my country. In the past two years, stimulated by the policy of strong matching of new energy with energy storage, the development speed of large-scale storage has also been accelerating. However, with the prosperity of the domestic energy storage market, the supply driven by demand has also expanded rapidly. According to media reports, there are currently tens of thousands of energy storage system integrators in China, and the market is close to saturation. Industrial and commercial energy storage is becoming a new blue ocean in China's new energy market.

With the development of photovoltaics and storage going hand in hand, the new installed capacity of industrial and commercial photovoltaics reached 25.86GW in 2022, a year-on-year increase of 236.7%, setting a new record for the annual new installed capacity of industrial and commercial distributed power.

As distributed photovoltaic power generation for industry and commerce gradually becomes popular, users are beginning to face new challenges. For example, during the May Day holiday this year, Shandong's power spot market saw negative electricity prices for 22 consecutive hours over two days.

As distributed photovoltaic power generation becomes more and more popular, the emergence of negative electricity prices will not be accidental in the future, which will undoubtedly have a huge impact on the investment value of distributed photovoltaic power generation for industrial and commercial enterprises. Energy storage can help distributed photovoltaic power generation for industrial and commercial enterprises to reasonably allocate power generation output and power load, which is a powerful tool to solve this problem. A report predicts that the national industrial and commercial energy storage market space is expected to reach 7.3GWh in 2023, and the global industrial and commercial energy storage installed capacity is expected to exceed 20GWh.

"Equipping distributed photovoltaics with energy storage is becoming a trend now. Energy storage can maximize the value of distributed photovoltaics. For industrial and commercial users, it is also an important means to reduce costs, ensure power supply, and achieve carbon reduction." Han Guang said.

In addition to energy storage, another major market for inverter companies is overseas. According to customs data: In March 2023, the export volume of inverters was 5.9137 million, an increase of 89.8% year-on-year and 74.8% month-on-month; the cumulative export volume from January to March was 14.9203 million, an increase of 61% year-on-year.