Surging growth in China's solar inverter market is the result of a strong domestic industry, with no foreign inverter company in the top 10 largest suppliers in 2013, according to data published today by analysts IHS.
Last year the inverter market in China grew by more than 100%, increasing from $400 million in 2012 to more than $800 million in 2013. Currently worth 11 GW in annual shipments, the market is forecast to reach 18 GW by 2018 as growth is propelled by domestic might.
The sector's momentum is set to be maintained by the growth of distributed solar PV in China, say IHS, despite a slow start to the sector that saw the country actually fall short of its distributed PV target of 8 GW in 2013. Wider adoption of smaller rooftop PV systems will also spur the growth of lower-power inverters.
An all-China inverter top 10 in 2012 and 2013 has confirmed the trend domestic dominance of the sector is likely to prove unshakeable for the foreseeable future. Yet despite this reassuring status quo, inverter suppliers in China were not exempt from problems last year, with fiercely competitive local markets and highly complex business conditions driving down prices, forcing many local suppliers to cast around for new regional markets, and ensuring no single supplier was able to gain a sizable share of the market.
However, there remained one clear leader, according to the IHS report, PV Inverter China Market Report 2014. Sungrow retained its position as the largest Chinese inverter supplier for the fourth year running, accounting for 30% of the industry revenue in 2013, followed by TBEA Sunoasis, Emerson Network Power, Chint, and Kstar the top five each holding more than 4% of the market share.
Fragmentation across the smaller companies continued apace, however, with the number of companies holding a market share of more than 2% increasing from 10 in 2012 to 13 last year thanks largely to the shift towards distributed PV that favors smaller systems.
"After several years of dramatic growth for huge ground-mount utility scale projects in remote areas of the country, China has begun to place increased emphasis on the development of distributed rooftop solar in areas with high demand for electricity," said IHS senior PV market analyst Frank Xie. "However, the development of this market has fallen below expectations due to a lack of clear policy and funding, and also from a shortage of experience in installing rooftop systems."
Low power inverters
A further 4 GW of distributed PV capacity will be added in 2014, forecasts IHS a figure that will fall some way short of the 8 GW target. Chinas current PV market is heavily weighted in favor of utility scale systems, a fact underlined by IHS' calculations that 93% of inverter revenue in 2013 was driven by high-power inverters. Distributed PVs steady growth will, however, present substantial opportunities for smaller inverters.
In 2013, less than 200 MW of low-power three-phase inverters (below 35 kW) were shipped to China a figure that is set to grow to 1 GW this year and surpass 5 GW annually by 2018, according to the analysts. Distributed PV growth will propel the sector, aided by the wider adoption of low-power three-phase inverters in the ground mount sector, which is an approach that has already proved popular in Europe, particularly Germany.
"The use of small string inverters in large PV systems can deliver a number of benefits," explained Xie. "Should a single inverter fail, it does not cause a large part of the system going down, and the failed inverter can quickly be replaced. Small string inverters also result in a larger number of maximum power point trackers in the array, which can increase the output of the system and, in many cases, can simply installation as specialized lifting equipment and transport is not required."
The promotion of such technology has been a key tenet of Hauweis recent entry to the market, with IHS forecasting that, by 2016, low-power inverters will amount to 1 GW in utility scale systems in China. And by 2018, China will be home to more three-phase inverters than any other country. Equally, demand for high-power inverters will remain strong, with annual shipments in China expected to exceed 10 GW per year for each of the next five years.
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