PV Inverter Market - Global Outlook & Forecast 2023-2028

The global PV inverter market was valued at USD 6.52 billion in 2022 and is expected to reach USD 13.98 billion by 2028, growing at a CAGR of 13.54% during the forecast period. The growing number of solar power plants attached to the grid through an on-grid solar inverter favors market development. Also, expanding installations of off-grid solar panels in industrial, commercial, and residential sectors influence the PV inverter market value, generating vast demand for safe and reliable power source converters.

Buildings account for up to 24% of greenhouse gas discharges and over 40% of the primary electricity use worldwide. These numbers are growing YOY due to the rising world population and improving living standards. The global landscape will likely encounter energy shortages in the future, and negative climate changes are quite apparent. It has been recognized with sufficient evidence that the present energy generation system is not sustainable. There is a need to shift to renewable sources, such as solar energy, for clean and sustainable energy. Such factors support the growth of the market during the forecast period. Furthermore, renovations, infrastructural development, and remodeling of existing commercial and residential buildings will also support the PV Inverter market's growth.

KEY HIGHLIGHTS

• In 2020, Sungrow Power Supply (Sungrow) surpassed Huawei to become the no.1 industry-leading player in the global PV inverter market (24% M/S based on shipment volume). The company targets an international industry share of 30% through overseas capacity expansions.
• 2022 is the beginning of the inverter replacement cycle - New solar-powered PV capacity installations have expanded worldwide since 2015.
• In 2022, according to the European Construction Industry Federation (FIEC), total investment in European construction was expected to increase by 2.4%, led by new home construction and civil engineering.
• The US Department of Energy recommends reducing electricity usage by incorporating more energy-efficient PV inverters, which can significantly reduce the use of nonrenewable electricity for electrical appliances.
• The US Department of Energy also estimates that a Photovoltaic inverter is up to 96% energy efficient. Implementing PV inverters in both residential and commercial buildings can largely facilitate the reduction of energy consumption and help in achieving the energy efficiency goals in the country.

KEY TRENDS & DRIVERS

Regulation on Energy Efficiency Driving PV Inverter Demand
As the global trend is shifting towards sustainability, governments worldwide are implementing regulations to reduce energy consumption and use it more efficiently across all stages of the energy chain, including generation, transmission, distribution, and end-use. Such policies drive consumers to shift toward renewable energy and reduce electricity consumption. The PV inverter market is pivotal in this era, where sustainable living and eco-friendly energy apply to most electrical appliances. The 2021 Europe commission introduced a new Energy Efficiency Directive to promote energy efficiency and achieve energy savings from climate change.

Growth of Green Building Activities
A Green building creates structures using environmentally sustainable and resource-efficient processes throughout the building's lifecycle, from siting to design, construction, operation, maintenance, renovation, and deconstruction. Green buildings are also known as sustainable and high-performance buildings and include factors like:

• Efficiently reducing the use of energy, water, and other resources.
• Protecting the health of the residents and improving the productivity of the employees.
• Effectively reduce the wastage of electricity, water, pollution, and environmental degradation.

Solar panels are an effective way for a building to meet its sustainability standards. These PV power panels can provide abundant eco-friendly energy resources, reducing or eliminating the need for electric consumption.

SEGMENTATION INSIGHTS

INSIGHTS BY PRODUCT TYPE
PV inverters are available in various types and designs. The global PV inverter market product type includes string, central, micro, and others, and in 2022, string inverters accounted for most of the global PV inverter market share. Unlike traditional inverters, string inverters are easier to install and less costly. They are directly connected to the grid and mostly do not have the facility of battery back-up the interiors in a smart and sophisticated way. Further, string-type inverters are highly suitable for commercial and residential sectors, encompassing small utility installations that usually fall under 1 MW. String inverters are best for homeowners looking for lower-cost PV systems or properties with uncomplicated roofs and consistent renewable electricity throughout the day.

INSIGHTS BY PHASE TYPE
Inverters are utilized in solar systems to transform DC power from solar panels into AC power. They can produce three-phase or single-phase output. Residential users usually utilize single-phase power supply. The three-phase power supply is usually used for industrial locations as three-phase can transfer more power and power large equipment like heaters, machines, electric car chargers, etc. The global three-PV inverter market holds the largest market share and is projected to continue the trend during the forecast period. Using a three-phase inverter, the end user can provide extra electricity back to the grid, and having three lines also allows users to pull more power from the grid. This helps with heated pulls, larger AC units, and other high-consumption needs. Therefore, high-end commercial building highly attracts to the three-phase PV inverter market.

INSIGHTS BY CONNECTION TYPE
The global PV inverter market by grid type can be categorized as on-grid and off-grid. The global on-grid PV inverter market size crossed USD 5.1 billion in 2022. The on-grid solar inverter is a conversant part of the on-grid solar system. It performs the critical task of converting the Direct Current (DC) to Alternating Current (AC). The major advantages of the on-grid solar inverter are Energy Conversion, Ensuring System Safety, Grid Assistance, Tracking Power Production, and many more.

INSIGHTS BY POWER OUTPUT TYPE
Many PV inverters are available in the market, but the devices are classified based on three power output ranges, starting at  (<0.5 kilowatts to 110Kw) and above. Typical outputs are
 (<0.5 kW to 33 Kw) for private home rooftop plants, 33-110 kW for commercial plants (e.g.factory or barn roofs), and more than 110 Kw for use in PV power stations. In 2022, the
 (<0.5-33) Kw power output type held the largest global PV inverter market share.

INSIGHTS BY END-USER
The utility end-user segment dominated the global PV inverter market in 2022. Solar power equipment and technologies are progressively making their way into the power generation, transmission, and distribution industry to increase the efficiency, productivity, and safety associated with power plants. With the help of solar electric power source digital technologies such as sensors, smart grids, and smart meters, the company and the customer have real-time and more accurate accounts of power usage. Further, although the construction and expansion of utility plants will drive the PV inverter market, most demand will be generated from house renovation. Modern house decors demand improved aesthetics, driving the demand for products such as PV inverters.

INSIGHTS BY DISTRIBUTION CHANNEL
The offline distribution channel dominated the global PV inverter market in 2022, and the segment is expected to witness an incremental growth of over USD 1.76 billion during the forecast period. Factors such as the broad reach in areas that lack better connectivity and brand loyalty, along with the quality of products, are driving the growth of this segment. Although the online channel holds a relatively lower share of the global PV inverter market, it is expected to grow at a higher CAGR during the forecast period. The proliferation of e-commerce and raising awareness of the benefits of online purchases, such as heavy discounts, occasional offers, and rising demand for convenience, is driving the growth of the online segment.

GEOGRAPHICAL ANALYSIS

APAC dominated the global PV inverter market, with over 46% share in 2022. India, China, Australia, South Korea, and Japan mainly drive the region’s market growth. Strong economic growth coupled with rising construction activities and increasing disposable income has primarily supported the market growth in the region. The China market is witnessing a spurt in multiple real estate projects and public-private investments in various residential, industrial, and commercial development zones because of the boom in urbanization.

Installations in new construction activities and renovations mainly support the growth of the PV inverter market in North America. The US depends on solar for 3.9% of its energy, although this share is rising rapidly yearly. In mature markets, such as North America and Europe, the growth is mainly driven by product innovations introduced by the key players. The growth of infrastructural construction projects is set to speed up significantly post-2021. These infrastructural projects in Europe are estimated to reach a total investment of about USD 14.8 trillion. They are expected to be completed by 2040, creating a massive demand for PV inverters at these European locations.

COMPETITIVE LANDSCAPE

The global PV inverter market is highly competitive, with the presence of a large number of private and public companies. These vendors typically compete on a key range of product design, reliability, quality, support services, and price. The instant technological advancements adversely impact the industry vendors as consumers anticipate the continuous innovations and upgrades of products. The present scenario drives vendors to alter and enhance their unique value proposition to achieve a strong industry presence.

Some major vendors dominating the global PV inverter market include SMA Solar Technology AG, HUAWEI Technologies Co., LTD., and Delta Electronics, Inc. These brands have various product portfolios with a widespread presence in the global industry. Due to the highly competitive market, R&D investments in the PV inverter market are limited and have substantial investments, mainly from large vendors. Moreover, the short time-to-market and little acceptance of new technologies add to market challenges for PV inverter vendors. R&D investments are more focused on cost reduction of the production process and improvement of the existing product technology for value addition than the development of new products.