Solar PV Inverter Industry, Global, 2024-2035

Record Investment Levels in Solar PV Drives Solar Inverter Revenues

Solar PV accounted for 45% of all power generation investment in 2024, and it is forecast to maintain this throughout the next decade. Inverters are one of the key components within a PV system, accounting for anywhere from 5% to 15% of the total system value, depending on the end customer segment. This study assesses the global market potential and growth opportunities for solar PV inverters. It includes three broad categories of inverters - central inverters, used mostly in large-scale utility installations; string inverters, used in medium-sized installations, such as commercial and residential establishments, and increasingly utility projects; and micro inverters that are mostly used in residential setups with some installations in the commercial sector. The revenue forecast for inverters is aligned to the solar PV industry. Frost & Sullivan accounts for revenues in the year the system comes online and the same applies for PV inverters.

Revenue Forecast by Segment

The base year revenue estimate is approximately $30 billion, with a CAGR of around 10% for the study period from 2023 to 2035.

Scope of Analysis

Solar PV accounted for 45% of all power generation investment in 2024, and it is forecast to maintain this throughout the next decade. Inverters are one of the key components within a PV system, accounting for anywhere from 5% to 15% of the total system value, depending on the end customer segment.

This study assesses the global market potential and growth opportunities for solar PV inverters. It includes three broad categories of inverters - central inverters, used mostly in large-scale installations and large commercial buildings; string inverters, used in medium-sized installations, such as commercial and residential establishments; and micro inverters that are mostly used in residential setups with some installations in the commercial sector.

The revenue forecast for inverters is aligned to the solar PV industry. Frost & Sullivan accounts for revenues in the year the system comes online and the same applies for PV inverters.

Short, medium, and long terms refer to 1 to 2 years (2025-2026), 3 to 4 years (2027-2028), and 5 to 11 years (2029-2035), respectively.

Scope

Element

Description

Industry Analysis

Comprehensive assessment of solar PV inverter market trends.

Competitive Landscape

Evaluation of key players and market positioning strategies.

Market Opportunities

Identification of growth segments and investment areas.

Technology Trends

Exploration of innovations influencing the industry.

The Impact of the Top 3 Strategic Imperatives on the Solar PV Inverter Industry

Competitive Intensity

• Why: The level of competition in the solar PV inverter industry is high. Chinese inverter producers have invested significant sums in new production facilities, and the result has been that average costs have declined in recent years.
• Frost Perspective: For project developers, the declining PV inverter costs, coupled with far more significant cost reductions for modules is enabling them to bring down project costs, thus making solar PV more competitive. For inverter manufacturers to stand out, they need to try and differentiate their products by offering advanced features.

Geopolitical Chaos

• Why: Major conflicts have made energy security a major concern. Increasing economic competition is resulting in a higher use of tariffs, principally by the United States. Tariffs act to distort industries by making imported goods more expensive and domestically produced goods more competitive.
• Frost Perspective: Tariffs (and incentives) are increasing investment in markets outside of China, particularly in the United States as components need to be locally produced. Major inverter manufacturers are seeking to diversify where they produce, which can be challenging as they are also under pressure to be cost competitive.

Innovative Business Models

• Why: As the intelligence of the grid increases, those assets on the grid gain more importance. There has been strong growth in residential solar PV in the past two years, and more commercial & industrial businesses will install PV as the costs continue to decline.
• Frost Perspective: The electricity produced from Solar PV projects is an asset. When combined with other DERs such as BESS and EV Chargers it can generate additional revenues for the asset owners - or it can mitigate potential demand charges or high electricity bills. Inverters are a key component in enabling this greater intelligence.

Growth Restraints

Whilst there are significant incentives and support mechanisms for solar PV in many geographies, as substantial number still lack effective policy support to ensure that market can reach its full potential.

While there are several programs offering rebates on solar panels, there aren't many incentives for inverters, increasing the upfront costs for non-bankable/small-scale and residential projects.

Delays in planning permission and grid connections can delay the progression of solar PV projects, resulting in lower inverter sales.

Growth Drivers

The increasing cost competitiveness of solar PV based generation is driving a huge pipeline of projects.

National renewable targets drive demand for solar PV and inverters.

While there are unique applications for DC power, the reliability, efficiency in power transmission, flexibility, and cost advantages have made AC power the most widely used, thereby making inverters a critical component of the solar PV system.

Renewables are characterized by variability in generation. Inverters improve power quality of grid connected PV systems.

Hybrid inverters act as reliable power back up during grid failure/blackouts, ensuring smooth business operations.