Rodney Chan, DIGITIMES, Taipei [Monday 25 April 2011]
The PV inverter market managed a staggering shipment growth of 132% to 19.8GWp because of strong demand, according to Sophia Chen, author of the recently published Digitimes Research Special Report, "PV inverter market overview." Chen believes that the PV inverter market will continue to grow in 2011.
Q: Supply in the PV inverter market was tight in 2010. What's the situation now?
A: A rush on system installations in Germany from the third quarter of 2009 before the deadline for high feed-in-tariffs (FITs) drove up PV inverter shipments. Strong demand persisted in 2010 but supply failed to meet demand because of component shortages, with lead time once extending to as long as 20 weeks. Following the alleviation of the component shortages in the third quarter, shipment picked up to 7GWp in the quarter but declined in the fourth quarter, due to bad weather in Germany and subsidy cuts. Digitimes Research estimates that PV inverter shipments skyrocketed 132% to 19.8GWp in 2010.
In 2011, reduced government subsidies will dampen installations in Germany, Italy, Czech, but demand in emerging markets will sustain global demand. System installations will reach 22.4GWp in 2011, while shipments of PV inverters will hit 24.5GWp.
Q: Who are the major players in the PV inverter market?
A: Of the top-10 inverter suppliers in the world, SMA, Kaco and Siemens come from Germany, and Power-One, Satcon, and Advanced Energy come from the US. None of the top-10 is from Asia. Since the PV inverter industry has high regard for major brands, it is very difficult for suppliers without brands to score major shipment growth. But some major suppliers suffered a decline in market share in 2010, despite shipment growth, due to an increased shipment share of small-scale suppliers, especially companies from Asia and North America. But major suppliers, Satcon and Advanced Energy managed to boost their global market shares, thanks to demand from large-scale power plants.
Q: How fast is the global PV inverter production capacity growing?
A: Expanding PV inverter capacity requires less equipment capital than PV cells or silicon wafers, and can be done quickly, taking just one or two months from planning to actual capacity expansion. In 2009-2010, when demand significantly outpaced supply, PV inverter manufacturers foresaw continuing growth in the market during 2011, and consequently began to formulate plans to expand capacity.
Global PV inverter capacity in 2010 was 40GW, of which Germany-based manufacturers accounted for 49% and firms from other countries in Europe accounted for 35%. In 2011, a total of 30GW in new capacity is planned, bringing the global total to 70GW.
Q: How is the increased supply going to affect the prices?
A: Prices fell by about 24% in 2010. In 2011, PV inverter manufacturers are expanding rapidly while upstream components manufacturers have also significantly expanded capacity. But a number of governments are reducing subsidies in 2011. As a result of all of these factors, prices throughout the PV supply chain are likely to fall, and PV inverter prices are also projected to continue to drop. A large number of new, Asia-based PV inverter manufacturers are also offering products at lower prices, and this is likely to push down prices even further. Digitimes Research estimates that PV inverter prices will fall more than 20% during 2011.
Digitimes Research analyst Sophia Chen
Photo: Digitimes file photo