New data from analyst firm IHS has revealed the scale of the price pressure being exerted on the global inverter market as Chinese-built components gain greater acceptance worldwide.
Despite year-on-year inverter shipments increasing by 35% for the first nine months of the year, a 26% reduction in prices to $0.12 per watt has suppressed revenue growth.
Global market revenue for the industry reached $6.9 billion in the first three quarters a figure that is just 4% up on last year. The stagnation of traditionally high-cost inverter markets such as Germany and Japan, allied to growth in low-cost China and the medium-cost U.S. market, has exacerbated falling prices, said IHS, while further market shifts are also contributing factors in the downward price pressure.
"The shift to utility-scale installations is changing the product mix and causing prices to fall," said IHS solar supply chain senior analyst Cormac Gilligan. "For example, in the U.S. lower-priced large central inverters will account for an increasing share of inverter shipments over the next 15 months."
A growing acceptance of Chinese inverters evinced by a recent IHS PV Inverter Customer Insight Survey that found 58% of PV inverter buyers now believe Chinese inverters offer acceptable levels of quality (up from 30% in 2013) is also contributing to this price pressure.
"Leading Western suppliers offer inverters that meet the latest grid codes and offer a high quality after-sales service," added Gilligan. "Although Chinese inverters are gaining acceptance, in terms of quality, Chinese companies must still offer competitive pricing to be considered by customers in new markets."
The analyst added that there remains a concern among inverter buyers that Chinese firms offer inadequate technical support and after-sales service. But as acceptance for Chinese components grows, Gilligan believes that it is "only a matter of time" before Chinese inverter companies are selected by leading lease suppliers and EPCs in the U.S., which will help to alleviate after-sales and O&M concerns.
Yet despite Chinas growing influence on the global inverter market, Germanys SMA has cemented and strengthened its position as the leading global brand for the fourth consecutive year thanks to a strong performance in the U.S. utility scale market and successful market strategy in Australia and Southeast Asia.
For the fourth quarter of the year, IHS expects inverter shipments to reach 20 GW.