Solar Inverters Market Analysis and Forecast to 2031: By Type (Central, String, Micro), System Type (On-Grid, Off-Grid), End User (Residential, Commercial, Utility) and Region

Solar Inverters Market Analysis and Forecast to 2031: By Type (Central, String, Micro), System Type (On-Grid, Off-Grid), End User (Residential, Commercial, Utility) and Region

The global solar inverters market was valued at US$ 8.4 billion in 2021 and it is anticipated to grow up to US$ 18.2 billion by 2031, at a CAGR of 8.0% during the forecast period.

Solar inverters are an essential part of the whole solar system. These inverters convert the direct current (DC) electricity to the alternate current (AC), hence determining the efficiency of the whole solar system. Besides the conversion, solar inverters track voltage, allow grid connecting communication, and shut down during emergencies. On-grid solar inverters produce a pure sine wave of AC electricity than off-grid inverters, hence, increased use of on-grid solar inverters ensures the better efficiency and safety of home appliances. Moreover, solar inverters are commonly used in residential utility applications and nowadays are increasingly used in commercial industrial projects across the globe.

Market Drivers and Trends

Installation of home rooftop solar panels can be observed in both developed and developing economies. Solar energy has appeared as a promising and extensively accepted renewable energy source. Also, residential solar solutions provide free, uninterrupted electricity for years while contributing to a greener environment.

According to the Solar Energy Industries Association, in June 2022, the US-installed 3.9 gigawatts (GW) of solar photovoltaic (PV) capacity in first quarter (Q1) 2022 to reach above 126 GW of total installed capacity, enough to power 22 million American homes. The solar segment accounted for fifty percent of all new electricity-generating capacity added in the US in Q1. Residential solar had its largest quarter in history with 1.2 GW installed, a 30% increase year-over-year (Y-o-Y). Further, the Indian government has a target of installing nearly 40 GW by 2022 for rooftop solar installations across the country, per the article published by Mercom India in August 2021. Rooftop solar inverters account for around 13% of cumulative solar installation in India. Moreover, companies realize the environmental and financial advantages of using solar inverters, and the COVID-19 pandemic has increased its adoption.

Therefore, with all the factors mentioned above, growing residential solar rooftop installations globally support the solar inverters market growth.

Market Restraints and Challenges

The solar inverter market is highly fragmented, with many local and foreign market players. The product quality of solar inverters is a primary parameter for differentiation in the solar inverter market. Moreover, the organized sector majorly sima industrial buyers and maintains higher product quality by following several industrial standards for solar inverter products. On the other hand, the unorganized sector offers cheaper alternatives. The local manufacturers in major countries target the unorganized sector, such as India, and compete strongly with global manufacturers. The leading solar inverters market players are currently facing strong competition from the new key players from the unorganized sector in supplying cheap and low-quality products. These gray market players overpower the big key players in terms of price competitiveness and local distribution network, which is a major challenge for the international players operating in the solar inverter market.

Global Solar Inverters Market Segmental Overview

The report analyses the global solar inverters market based on type, system type, and end user, and region.

Global Solar Inverters Market by Type

Based on type, it is segmented into central, string, and micro. The central segment is likely to dominate the market during the forecast period. The market growth of the central segment is increasing at a faster rate because central inverters are highly reliable with timely maintenance and are housed in a protected location for their installation. The central inverters are integrated with large arrays installed on field installations, industrial facilities, and buildings, taking DC power from all the solar panels and converting it into AC power, becoming a single point for power distribution. Thus, numerous benefits of central segment are boosting the growth of the market.

Global Solar Inverters Market by System Type

Based on system type, it is bifurcated into on-grid and off-grid. The on-grid segment is likely to hold the major share of the market. The on-grid segment holds the largest share because of the rise in investment in the direct supply of electricity rather than storing it in batteries. In addition, advantages of being used as on-grid solar inverters include easy feeding of energy, easy installation, cost-efficiency, and managing high electricity demand, boosting the market's growth.

Global Solar Inverters Market by End User

Based on end user, it is segmented into residential, commercial, and utility. The utility segment is likely to dominate the market during the forecast period. The rising investment in utility-scale solar power plants, solar parks, and other solar structures is primarily boosting the market's growth. Moreover, the rise in construction projects such as decentralized solar power plants, rural electrification projects, solar power plants on the water body rooftops and commercial buildings drive the growth of the solar inverter market for the utility segment across the globe.

Geographical Analysis of Global Solar Inverters Market

Region-wise, it is studied across North America, Europe, Asia Pacific, and the Rest of the World. The Asia Pacific market is expected to hold the majority of the market share during the forecast period. The solar inverter market in Asia Pacific is witnessing significant developments in the renewable energy sector due to increased initiatives towards climate change and net zero targets, which has supported the demand for solar inverters across the region. The growing investments in the photovoltaic (PV) plants and rise of installations in the residential sector is also supporting region’s growth.

Major Players in the Global Solar Inverters MarketCOVID-19 Impact

Solar inverters were required during the pre-COVID-19 pandemic because of the growing rural and urban population. Due to the rising population, infrastructural development was increasing. According to the article published by the Journal of Commerce Online, the US Department of Transportation (DOT) allocated grants of approximately US$ 856 million to Infrastructure for Rebuilding America (INFRA) for constructing 20 projects across the US. Thus, the need for infrastructure development supported the global solar inverters market growth.

In 2020, the COVID-19 pandemic resulted in economic challenges owing to subsequent lockdowns. In 2020, manufacturing industries were severely affected due to a drastic decrease in product demand, falling prices, and storage shortages. A swift decline in manufacturing revenues due to virtually nonexistent manufacturing demand and slow production capabilities has limited the expenditure on installing or upgrading existing solar inverters across various industries worldwide. Moreover, periodic maintenance and discontinuation of operation in existing manufacturing plants have hampered the demand for solar inverters. Thus, the COVID-19 pandemic had negatively affected the global solar inverters market.

In 2021, the manufacturing industry started recovering from the significant labor and supply chain challenges that triggered the adoption of solar inverters. In 2022, solar inverters will have a higher global demand due to the continued progress in the global renewable energy sector.

Recent Developments

• April 2022, Delta Electronics, Inc. had launched the first bi-directional inverter integrating solar power, power storage, and electric vehicle (EV) charging.
• April 2022, Power Electronics S.L. had exhibited at Intersolar the new generation of the HEMK solar inverters, the most powerful modular solution on the market with 4.4MVA.
• July 2019, ABB Ltd and FIMER S.p.A had announced that they have signed an agreement for FIMER to acquire ABB’s solar inverter business. The transaction will enhance the future prospects of the solar inverter business and will enable ABB Ltd to focus its business portfolio on other growth markets.

Frequently Asked Questions

Q1. How big is the solar inverters market?Ans. The global solar inverters market size was US$ 8.4 billion in 2021 and is anticipated to reach US$ 18.2 billion in 2031, growing at a rate of 8.0% from 2022 to 2031.Q2. What is the solar inverters market growth rate?Ans. The growth rate of the solar inverters market is 8.0% from 2022 to 2031.Q3. Which region holds a major market share for the solar inverters market?Ans. Asia Pacific holds a major market share of the solar inverters market in 2021.Q4. Which segment accounted for the largest solar inverters market share?Ans. Based on system type, it is bifurcated into on-grid and off-grid. The on-grid segment is likely to hold the major share of the market.Q5. Who are the key players in the solar inverters market?Q6. What are the factors driving the solar inverters market growth?Ans. The major factor driving the growth of the market is rising residential solar rooftop installations.Q7. What are the key growth strategies of solar inverters market players?Ans. The key growth strategies of solar inverters market players are product launch, partnerships, and government initiatives.Q8. Which region will provide more business opportunities for the solar inverters market during the forecast period?Ans. The Asia Pacific region will provide more business opportunities for the solar inverters market during the forecast period.

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