The shipping volume of PV inverters has increased recently, but in an increasingly competitive market, prices have come down, forcing manufacturers to think outside the box to find new business uses for their products.
18th May 2018
Despite a steady increase in solar PV systems, the inverter market is likely to change due to falling prices. The traditional inverter business is no longer sufficient to establish a dominant market profile.
Given the growing interest in integrating electric vehicles, power optimizers, technological competition between string and micro-inverters, and the emerging applications of virtual power plants and grid services from battery storage, providers of inverters and solar PV solutions have to keep pace with the rapid pace where the market is changing.
Currently, the PV inverter market is extremely competitive. Serious players are emerging in China and western manufacturers are continuously expanding their product portfolios. While such a competitive market could indicate that the market is still developing and has great potential in the future, IHS Markit sees that global sales in the PV inverter sector are declining slightly.
According to reports, inverter prices are expected to fall further by up to six percent from 2018 to 2022. The total addressable market (TAM) for solar PV inverters is expected to decline this year compared to last year, forecasting global sales of nearly $ 8 billion.
At the same time, the uninterruptible power system (UPS) market has become stable in size and is expected to grow in the future. UPS primarily provides services to hospitals or other critical infrastructures to ensure power supply in the event of a failure. From a technological point of view, merging the inverter and UPS is a pretty logical step.
UPS applications overlap with storage systems behind the meter, but usually lead-acid based. Linking this technology with modern lithium-ion battery solutions and digital energy management tools could improve the products while saving R&D costs as the interconnect technology could come from other regular solar PV applications that many solar companies are already involved in involved.
On May 9, the Israel-based supplier of PV inverters and other solar systems announced that it was joining the UPS market. This is done through a purchase agreement with the UPS solution provider Gamatronic. After all, the UPS market size is roughly the same as the PV inverter market, which means that SolarEdge has doubled its Total Addressable Market (TAM).
Prior to the Gamatronic acquisition, SolarEdge's TAM was nearly $ 8 billion in 2017, while SolarEdge's new TAM was set at $ 15 in 2018 after the acquisition. In addition, Solaredge has indicated that the company will continue to diversify its business into smart meters and energy management systems.
According to IHS Markit, the increasing price pressure on the inverter market is responsible for the fact that the manufacturer is looking for new applications for its technology. The recently announced acquisition of assets from Solaredge is an example of the new market momentum.
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