iSuppli: massive solar inverter shipments projected by 2014

Global solar inverter shipments are expected to surpass 23.3 million units by 2014, up by a factor of nine from 2.6 million in 2010, according to a new report from iSuppli Corp. Revenue will subsequently increase to US$8.9 billion in 2014, up from US$5.3 billion in 2010. This would result in solar inverters sales becoming one of the highest-volume ruggedized electronic systems sold, according to report author Greg Sheppard.

Despite such soaring demand, the average price per watt for inverters worldwide will decline by 13.5% this year. In particular, Asian suppliers are trying to drive prices down with lower costs, Sheppard noted, even though they have been challenged to deliver bankability.

A key issue since mid-2009 has been the lack of adequate production capacity to make inverters coupled to a lingering shortage of electronic components. Inverter capacity issues have since been resolved but component supply issues remain an ongoing challenge for inverter manufacturers, iSuppli noted.

Something PV-Tech has previously pointed out is the supply issues surrounding Insulated Gate Bipolar Transistor (IGBT) modules, which are in constant short supply and difficult to obtain for many inverter companies.

According to the market research firm, a mature product with predictable supply and demand dynamics, IGBTs are now experiencing rising sales in a number of hot applications, including automotive electronics as well as PV and wind inverters. Combined with conservative investments in new IGBT capacity, the strong demand has spurred a supply crunch.

Other inverter components in short supply include Digital Signal Processor (DSP)-based controllers and certain types of capacitors, said iSuppli.

“iSuppli believes that inverter suppliers increasingly will be valued based on their impact upon the Levelized Cost Of Energy (LCOE), a metric that takes into account not only the acquisition cost of an inverter but also total energy production and the 20-plus-year lifecycle costs of an inverter within an installation,” commented Greg Sheppard, chief research officer for iSuppli.

“Initial acquisition costs are important, but the lifetime costs of inverters loom larger in Return of Investment (ROI) equations for PV system owners,” Sheppard pointed out. “Thus, quality and reliability are key competitive advantages in the inverter business.”

Despite such soaring demand, the average price per watt for inverters worldwide will decline 13.5% this year. In particular, Asian suppliers are trying to drive prices down with lower costs, Sheppard noted, even though they have been challenged to deliver bankability — i.e., the capability to provide a lower Total Cost of Ownership (TCO).

Interestingly, iSuppli believes that price declines are being impacted by the increasing market share of larger inverters, which boast a lower price per watt.

On the micro-inverter front the market research firm noted that the U.S. residential market is adopting microinverters rapidly, while optimizers have found favour with European residences. Each market is commanded by a different company with Enphase Energy currently controlling the micro-inverter market in the U.S., while SolarEdge is No. 1 in the optimizer arena in Europe.