A sharp decline in factory-gate prices has resulted in a further fall in revenue for PV inverter suppliers, according to IMS Research’s latest quarterly report.
Despite shipments in the first half of the year totalling close to 10GW, a 20% drop in factory-gate prices led to Q2 year-on-year revenues decreasing by 1.3%, and IMS’s quarterly PV Inverter Supply & Demand report is predicting further price declines in the second half of the year.
“Average inverter prices fell rapidly in both Q1 and Q2 to under €0.20 per Watt and although not matching PV modules’ decline, they’ve reduced by 20% compared to one year ago, though this is partly due to product mix change,” said Ash Sharma, senior research director at IMS Research.
Several factors triggered these price declines, such as customer demand, a change in product mix away from higher-priced string inverters and geographical shifts to lower priced regions.
Geographic changes in inverter demand were found to have had a two-fold effect on industry prices. Firstly, several low-cost markets, such as India and China gained share of the global market, causing a slide in prices. Secondly, many of the largest suppliers continued to migrate from the stagnating German market to smaller emerging markets.
“Suppliers effectively tried to buy market share in new, emerging markets, hoping to establish themselves there in the longer-term, but perhaps making short-sighted and aggressively low quotes,” Sharma said.
The effects of a growing supplier base and the vast number of inverter suppliers fighting for customers has helped to drive down prices and will continue to exert pressure on suppliers to reduce costs and prices in order to compete. However, despite the burgeoning number of suppliers, Q2 saw industry leader SMA Solar recapture some of the market share it lost in Q1, gaining a further 8% to increase its overall market share to 30%.