While photovoltaic inverter profit margins may be under pressure, the U.K.-based research firm forecasts that the market for inverter service plans and extended warranties will grow between 2012 and 2017 to reach US$1.7 billion representing an increase of more than 110%.
In its PV Inverter Service Plans & Extended Warranties report, IMS Research states that demand for utility-scale photovoltaic installations, which are said to typically use three phase inverters, will lead this growth.
"In 2012, 26 percent of high power three-phase inverters were sold with a service plan attached, and this is forecast to increase to 34 percent by 2017. In many cases, banks and finance providers will specify that inverter service plans are required as a condition of the loan in order to ensure that PV installations operate efficiently and that inverter downtime is minimized," explains IMS Research.
Suppliers, while being presented with revenue growth opportunities, also face challenges, which include an increasingly fragmented photovoltaic market, says IMS Research. Indeed, in addition to various minimum warranty lengths, they will also be faced with setting up local service centers in the different geographical regions.
"Industrial inverter manufacturers that are not solely focused on PV may initially be best placed to offer after-sales service in new PV markets, as they often have existing operations established in these regions to serve other industries, whereas pure-play PV inverter manufacturer may have to use third party service partners until they can establish a local service center in these new emerging markets," says PV analyst, Cormac Gilligan.
In Januarys edition of pv magazine, IMS Researchs Sam Wilkinson and Ash Sharma reported on the results of their most recent photovoltaic inverter survey. The IMS Research 2012 Inverter Survey received 431 responses from distributors, installers, integrators and other individuals responsible for purchasing photovoltaic inverters.
Interestingly, this year respondents stated that both warranty and service offered ranked higher than price competitiveness: this was generally the case across most countries.
Meanwhile, over 90% of respondents reportedly considered warranty and aftersales service as either "critical" or "important" for most projects, while almost half of respondents from the U.S. indicated that warranty and aftersales service plans are "critical" for all projects. This is compared to just over one quarter of respondents from Germany.