Asian countries have continued to gain prominence on the list of the world's largest PV inverter suppliers, according to new research released by IHS. The analyst firm said that the current positioning was such that they are now poised to gain larger shares of international markets.
The research, put together in PV Inverter World Market Report 2014, noted that four of the top ten inverter suppliers were from China and Japan, compared to two in 2012 and none in 2011. The report also found that China and Japan accounted for 35% of global inverter revenue in 2013, itself a near three-fold increase from 12% in 2011.
Sam Wilkinson, solar research manager at IHS, said, The rate at which the solar landscape has transformed has been incredible, and it has initiated a major shift in the competitive environment for PV inverter suppliers. As growth from China and Japan continues to outpace the global market in 2014, both Chinese and Japanese suppliers are likely to further improve their positions in 2014.
In a statement, IHS said that the reason the Chinese market went through a boon in Q4 was that the country, […] underwent an intense rush to complete PV systems before the end of 2013 in order to beat a scheduled decrease in the feed-in tariff (FIT) rate.
The effect of a decrease in the FIT, said Cormac Gilligan, senior analyst solar supply chain at IHS, could be increased price pressure on suppliers.
Gilligan added, That happened in Germany and Italy. Prices are already at their lowest in China, so it would exacerbate the problem. The other thing is that lead times may be an issue in countries other than China. It had been traditionally expected there that there are surges in Q4 and January before the Chinese holiday season. That's how the inverted market has occurred. Q4 last year was one of the largest on record and that really assisted some of the market leaders like Sungrow. Once the FIT reduction has occurred, there may be further price pressure across all parts of the supply chain, particularly on inverters. Module prices have gone really low and there isn't much breathing space there.
The growing dominance of the Asian companies is however tempered by the fact that their success lies largely in domestic markets, with IHS stating that, all have minimal sales outside of their home markets.
Wilkinson added, Although Asian suppliers have had a huge impact on the global rankings due to their success in local markets, their bearing on international markets outside of China and Japan has currently been quite limited. Just the same, the economies of scale, expertise and brand strength that they have now been able to achieve makes them well placed for international expansion, and the world is likely to see many of these suppliers play a greater role in markets outside Asia over the next two to three years.
PV Inverter World Market Report 2014 also found that many Western firms had lost competitiveness over 2013. Only four of the top ten companies that year were European or European-centric. This was in contrast, according to IHS's report, to 2008 when all of the top ten companies were European or had European ties. IHS also noted that three of the largest manufacturers in 2008 have also been acquired, while one has exited the industry altogether.
Wilkinson said, The decline of the PV market in Europe has placed European suppliers in a very vulnerable position. Many of these suppliers relied heavily on Europe as the backbone of their business and were highly exposed to the rapid shift in demand from Europe to other regions. Annual PV inverter revenues from Europe have halved in the last two years, creating an extremely tough competitive environment, and many of the leading names from five years ago have vanished from todays list of leading suppliers.
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