Global inverter market shrinks 4%, Asian suppliers gaining, says IHS

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German inverter specialist SMA could lose its position as the world’s leading supplier this year as global demand continues to shift eastwards toward Asian markets, warns IHS senior analyst, solar supply chain, Cormac Gilligan.

Data from IHS’s latest PV Inverter Market Tracker has revealed that the overall global PV inverter market shrank 4% in 2014, dropping to $6.6 billion in terms of global revenue.

This new landscape is proving tough for European and U.S. inverter suppliers, with both SMA and ABB losing market share of 3.2% and 0.8% respectively. Snapping at their heels are three Japanese inverter suppliers, with Omron, TMEIC and Tabuchi ranked third, fourth and fifth in global revenue share in 2014, posting market share increases of 0.9%, 1% and 1.2% respectively.

The absence of any leading Chinese solar inverter supplier in the IHS global revenue top five can be explained by the lower-than-average inverter prices in China. According to IHS, despite experiencing a large gain in MW shipment market share, prices of $0.07 per watt (W) in China remain way below global averages of $0.16/W, which served to undermine the revenue share gains of leading suppliers such as Sungrow and Huawei.

According to Gilligan, it is the Japanese suppliers operating in a higher revenue market that are best-placed to usurp SMA as market leader, possibly this year. "Due to global demand shifting toward Asian markets, if suppliers maintained their current market share in each country this year, it is possible that we would see a new global market leader.

"In fact," Gilligan continued, "for the first time on record, SMA could be displaced as the leading PV inverter supplier, if not in terms of revenue then quite possibly in terms of MW shipments."

Gilligan confirmed to pv magazine that despite China’s growing MW shipments, Its largest inverter suppliers have still failed to achieve the revenues enjoyed by leading manufacturers from Japan, Europe and the U.S. "Inverter prices in China are considerably lower than average inverter prices in the rest of the world and, as a result, this impacts their [Sungrow and Huawei’s] total revenue."

SMA’s market share is currently half what it was in 2012, and 25 percentage points lower than in 2009. Although the company has retained global revenue top spot, its stranglehold on the market has been loosened consecutively for the past five years. Facing staff layoffs of around 600 later this year, the situation could turn even bleaker for the market leader moving into the second half of the year.

"If we assume that China will install around 17 GWac in 2015,” Gilligan told pv magazine, "and that Sungrow and Huawei account for a large portion of shipments, it is very likely that they will exceed SMA in shipment terms."

Efforts by Sungrow and Huawei to globalize into new markets have not been quite enough to bring their overall revenues close to those enjoyed by their Japanese counterparts. In 2014, Sungrow amassed global inverter orders of 5.89 GW, shipping 4.23 GW, of which 3.8 GW was shipped domestically, within China.

Huawei, meanwhile, enjoyed the largest 12-month gain in the global PV inverter market last year, but in terms of revenue share has not yet been able to break into the top five.