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PV inverter market suffers falling revenues, but still set to grow

The third quarter (Q3) of 2011 was not kind to the photovoltaic inverter market. According to new research, revenues fell by 20 percent year on year. Germany has been identified as the main culprit behind the declining figures. Short-term price stabilization and a growing market provide some relief, however.

Year-on-year photovoltaic inverter price and revenue variance.

IMS Research

While inverter revenues declined across the board, IMS Research says that Germany suffered the biggest loss, with Q3 2011 revenues having dropped by 50 percent in comparison to Q3 2010. Shipments were also one gigawatt (GW) lower. Global inverter shipments, meanwhile, were down eight percent year-on-year.

Short-term stabilization

IMS said that despite prices coming in 15 percent under those seen in 2010, they do seem to have stabilized which, it explained, indicates "healthier" inventory levels.

Exchange rates are also said to be a contributing factor to both the price and revenue drops. Tom Haddon, PV Market Analyst at IMS Research commented, "The majority of inverters are still sold in Europe where the average price per watt stabilised last quarter if measured in Euros. However, companies from outside the Eurozone realizing their revenues in dollars may still have felt the price pressure as Dollar prices fell by five percent compared to Q2’11 due to changes in exchange rates."

He went on to say that price pressure will continue to plague the market for "some time", meaning that inverter suppliers shouldn’t become too comfortable with the current price levels.

SMA was identified as the inverter leader, with over 30 percent of the market. Its success is said to lie in its increasingly strong focus on emerging foreign  markets. "Whilst SMA has always been strong in its domestic market, it is now turning its attentions to the faster growing emerging markets, with the Americas becoming a larger proportion of its business. In order to maintain or increase market share this strategy will need to continue," explained Haddon.

Looking ahead, IMS predicts that despite the current problems, the market will continue to grow this year. In 2012, it expects shipments to be over 25 GW, chiefly due to new incentives in Asia, and heightened activity in Germany before the new FIT cuts come into play in January.