A report by analysts IHS has forecast the global module-level power electronics (MLPE) market to grow to $1 billion by 2019, enjoying a compound annual growth rate (CAGR) of 19%.
Microinverters and power optimizers dominate the solar MLPE market, with two clear market leaders in each U.S. company Enphase led the microinverter sector in 2014 owing to its high penetration across the U.S. and continued expansion into Europe and Asia Pacific; while SolarEdge was dominant in 2014 in the power optimizer sector, enjoying widespread success in the U.S. and emerging markets, found the report.
The price pressures that are currently biting down hard on the inverter sector with average prices falling 16% in 2014 have not yet made it along the value chain to the MLPE market, where revenues continue to grow, finds IHS. Year-on-year growth is currently at 30%, with 2014s revenue reaching $430 million.
At a CAGR of 19%, the market will reach $1 billion by 2019, said IHS senior analyst, solar supply chain, Cormac Gilligan. "The U.S. continues to be the biggest market for MLPE this year," he said. "Due to booming residential and commercial markets, and heightened market awareness of the benefits of microinverters and power optimizers, suppliers increased MLPE shipments."
IHSs PV Inverter Intelligence Service found that the MLPE sector is growing and gaining market share in some of the more dynamic PV markets, notably Australia, the U.K., France and the Netherlands. The U.S. will account for around 20% of global residential and small commercial installations over the next five years, with global installed capacity on course to reach 75 GW.
"The growth opportunity for MLPE outside the U.S. is huge," said Gilligan. "Provided microinverter and power optimizer suppliers can keep expanding into new geographical markets, and keep innovating to take advantage of energy storage and other new growth markets, there is plenty of room for both technologies in the market."
According to Gilligan, more and more suppliers of PV modules have begun recognizing the value of MLPE, and leading suppliers such as LG, JinkoSolar and SunPower have either begun producing their own MLPE products, or have partnered with MLPE specialists.
"Adding a microinveter to create an AC module, or adding power optimizers to create a smart module in the factory, allows [module suppliers] to differentiate themselves from the competition and give their customers more options."
One example cited by Gilligan of this trend is Supowers acquisition in 2014 of microinverter company SolarBridge a move that indicates how much importance module suppliers are placing on vertically integrating this technology into their business, rather than simply partnering with preferred suppliers.