PV inverter shipments in 2011: 23GW or 26GW?

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  After over shipping about 3GW in 2010 to the global market place the inverter industry was able to meet 2011 installation demand via consumption of these excess plus new shipments.

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Henning Wicht

Henning Wicht (Ph.D.) is Senior Director and Principal Analyst at iSuppli. He established the iSuppli Photovoltaics Market Research group in 2008, which centres on an integrated PV industry research model entitled the Photovoltaics Market Tracker. Before joining iSuppli, Henning founded and led the technology consulting firm WTC, acquired by iSuppli in April 2008. Earlier in his career, he worked for CEA in France and Germany.

The PV inverter industry did a good job limiting production and clearing excessive inventory levels in 2011. After over shipping about 3GW in 2010 to the global market place the inverter industry was able to meet 2011 installation demand via consumption of these excess plus new shipments. 2011 shipments were based on better demand-matched production rates then the year before when production constraints helped stimulate over ordering and over production later in the year.

Worldwide installations in 2010 were only 17.9 GW and those extra inverters had to go somewhere and that turned out to be to installations during Q1 and Q2 of 2011. If the industry had shipped as much as much 26 GW this year then what happened to the excess shipments of last year assuming the installations of 2011 was around 26 GW as well? 3 GW of inventory is worth about $780M at factory gate prices and this is too much capital to have been allowed to linger in inventory without a large consequence.

Confirmation of this viewpoint comes from industry leader SMA as it stated in its Press Release of January 13, 2012 as well as in a presentation at HSBC/SRI Cleantech Conference on February 01, 2012 that “the solar inverter market of 2011 reached 23GW (2010: 23GW). Strong installations in Q4 were driven by inventory clearance.”

Editor note: Financial analysts have noted on many occasions that companies can underestimate global demand to give themselves higher market share positions or to hide market share losses.

SMA further states that according to its sales pipeline many of the Q4 installations in Germany have been registered without having an inverter.

This data confirms the IHS iSuppli forecast of 23.4 GW inverter shipments (2010: 23.6GW) which was compiled independently.

It is too early to say that 26 GW were not shipped until final tallies are in but it seems that the strong installations of Q4 have made people believe that 2011 was a record year for inverters. We look at 2011 as the year the inverter industry did a good job matching supply and demand.