PV INVERTER MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024-2031)
PV Inverter Market, By Product (String PV inverter, Central PV inverter, Micro PV inverter, Other PV inverter), By End-use (Commercial & Industrial, Utilities, Residential), By Geography (North America, Europe, Asia Pacific, Latin America, Middle East and Africa)
The PV inverter market size is valued at US$ 15.28 billion by 2024, from US$ 41.87 billion in 2031, at a CAGR of 15.5% during the forecast period. PV inverters are critical components in solar energy systems that convert the direct current (DC) generated by photovoltaic (PV) panels into alternating current (AC) that can power homes and businesses or be fed into the electric grid. There are two main types of inverters: string inverters and microinverters. String inverters are connected to multiple PV panels in series and invert the combined DC output of the connected string. This allows for maximum power point tracking to optimize performance but presents single points of failure. Microinverters, in contrast, are integrated into or closely coupled to individual PV panels. This provides module level monitoring and optimization, but at a higher cost per watt.
The advantages of string inverters include lower cost, simpler installation as only one inverter is needed, and high efficiencies for large arrays. However, shading or faults in one module will impact the whole string. Microinverters overcome this by allowing each panel to operate independently without affecting others. Every panel produces maximum power, even in partial shading. But they are more expensive and complex to install. The selection of an inverter depends on factors like PV array size, shading conditions, budget, and preference for centralized or module-level power electronics. Overall, inverters play a vital role in converting solar energy into a usable form and maximizing the power harvest from PV systems.
PV Inverter Market Regional Insights:
North America: North America holds the second largest market share in the PV Inverter Market, off 35% high demand for PV Inverter Market in the Growing demand for renewable energy and Advancements in technology the presence of major market players in the region.
Asia Pacific: The Asia Pacific region dominated the market with the largest market share of 44% in 2023. China is the largest contributor to the rapid growth of this region’s solar market and is also a major global competitor. A growing number of solar installations in developing nations has also significantly contributed to growth of market in the region.
Europe: The PV Inverter Market in Europe holds 10% share in the market and the presence of major players in the region.
Figure 1. Global PV Inverter Market Share (%), By Region, 2024
The PV inverter market is poised to grow significantly over the next five years, driven by declining prices of solar panels and supportive government policies and regulations around the world. Major drivers for the market include countries mandating renewable energy generation targets and incentives for rooftop solar installations. Additionally, improved efficiency of solar inverters and technological innovations such as remote monitoring and integration with energy storage solutions will also support market growth. The market is expected to be led by residential segment as more homeowners are installing rooftop solar panels to reduce electricity bills. The U.S. and China currently dominate the market due to presence of their favorable net metering policies and tax credits. However, Europe is likely to see the fastest growth on the back of Europe’s climate change commitments. The market is currently fragmented with no clear leader, while top inverter manufacturers are focusing on consolidating their position through strategic acquisitions. On the other hand, lack of standardized international regulations and technical standards may pose challenges for larger scale cross-border projects. Additionally, the growing penetration of solar energy also requires strategic management of grid stability, which remains an area of concern. Tariff changes and withdrawal of subsidies in China and the U.S. could also dampen growth prospects in the coming years.
In conclusion, technological progress and a supportive policy framework are expected to boost solar PV adoption globally, resulting in a strong demand for inverters.
PV Inverter Market Drivers:
Growing demand for renewable energy solutions: The world is witnessing a growing demand for renewable sources of energy owing to rising concerns over environmental pollution and fossil fuel depletion. Solar energy, being abundant and clean, has emerged as one of the most viable renewable energy solutions. However, widespread adoption of solar energy is being hampered by the intermittent nature of sunlight. Photovoltaic inverters play a crucial role in overcoming this limitation by converting the direct current produced by solar PV modules into alternative current that can be fed into the electrical grid or used by residential or commercial buildings. As solar power installations continue to increase globally, driven by favorable government policies and initiatives as well as falling module prices, the demand for PV inverters is expected to grow substantially. Countries around the world are formulating ambitious targets and incentives to increase the share of solar and renewables in their overall energy mix. For example, China and India have set aggressive solar capacity addition targets over the next decade to reduce pollution levels and dependence on imports. This growing emphasis on developing domestic solar capabilities is likely to create a sizable market for PV inverters to support large utility-scale as well as rooftop solar projects.
Stringent efficiency standards: Government agencies and regulators across different regions have been implementing stringent efficiency standards and mandates for PV inverters in recent times. It aims to maximize the energy production of solar power plants and minimize power losses during conversion from DC to AC. Inverters that meet the latest standards increasingly use advanced power electronics and newer high-frequency switching technologies to achieve higher conversion efficiencies. While more efficient inverters are typically more expensive to produce, they help accelerate the return on investment for solar projects by boosting overall system performance. In addition, next-generation inverters with integrated energy storage and backup power capabilities are being developed to provide enhanced grid support. The tighter efficiency norms being notified by organizations like the California Energy Commission and Europe's European Code of Conduct are compelling manufacturers to incorporate the latest technological improvements in their products. This is positively impacting the market dynamics by driving replacement demand and faster uptake of more advanced inverter solutions.
PV Inverter Market Opportunities
Emerging residential PV market: The emerging residential photovoltaic (PV) market offers tremendous potential for expansion in the PV Inverter Market. As concerns over climate change grow and renewable energy solutions become more affordable and accessible, homeowners around the world are increasingly adopting rooftop solar to reduce their carbon footprint and lower electricity costs. This represents an important, untapped segment of the power generation market that PV inverters are well-suited to address. Residential PV installations allow households to turn their roofs into productive energy generators. By converting the direct current (DC) electricity generated by solar panels into the alternating current (AC) needed to power appliances and feed into the larger grid network, PV inverters are a crucial linking component. Their role in maximizing the usability and return on investment of residential solar systems creates a growing demand as more homeowners invest in independent renewable energy production. International bodies like International Renewable Energy Agency (IRENA) estimate the global rooftop PV capacity added annually could triple by 2023 compared to recent installation levels over the past decade, indicating huge potential growth for associated inverter sales.
Increased global PV demand: The increased global demand for photovoltaic (PV) systems presents a massive opportunity for the PV inverter market to grow substantially in the coming years. More and more countries and communities are installing rooftop and large-scale solar power installations as the world moves towards reducing carbon emissions and dependence on fossil fuels. For instance, according to data from the International Renewable Energy Agency (IRENA), the global installed solar PV capacity increased by over 150GW in 2021 alone, crossing the 800GW mark globally. IRENA also estimates that solar PV will account for nearly 30% of electricity generation by 2030 and 49% by 2050 under their 1.5 degree scenario.
PV Inverter Market Report Coverage
Report Coverage
Details
Base Year:
2023
Market Size in 2024:
US$ 15.28 Bn
Historical Data for:
2019 to 2023
Forecast Period:
2024 - 2031
Forecast Period 2024 to 2031 CAGR:
15.5%
2031 Value Projection:
US$ 41.87 Bn
Geographies covered:
North America: U.S. and Canada
Latin America: Brazil, Argentina, Mexico, and Rest of Latin America
Europe: Germany, U.K., Spain, France, Italy, Russia, and Rest of Europe
Asia Pacific: China, India, Japan, Australia, South Korea, ASEAN, and Rest of Asia Pacific
Middle East: GCC Countries, Israel, and Rest of Middle East
Africa: South Africa, North Africa, and Central Africa
Segments covered:
By Product: String PV inverter, Central PV inverter, Micro PV inverter, Other PV inverter
By End-use: Commercial & Industrial, Utilities, Residential
Companies covered:
Eaton, Emerson Electric Co., Power Electronics S.L., Hitachi Hi-Rel Power Electronics Private Limited, Siemens Energy, Fimer Group, SMA Solar Technology AG, Delta Electronics, Inc, SunPower Corporation, Omron Corporation
Rising demand for storage along with PV systems: The growing demand for battery storage solutions in conjunction with photovoltaic or solar systems is having a substantive impact on the PV Inverter Market. As more homes and businesses invest in solar panels to generate their own renewable electricity, there is an increasing need for battery backups and other storage technologies to store this electricity for use when solar power generation is low or unavailable. This is because solar power production varies throughout the day and year based on sunlight levels, and many consumers want the ability to rely on electricity even when the sun isn't out. As a result, PV inverter manufacturers are developing more sophisticated inverters that are optimized to work together with battery storage. Traditional solar-only inverters cannot manage the complex power flows associated with diverting power between the solar panels, batteries, and internal and external loads as efficiently as is needed. The new generation of "solar-plus-storage" inverters provides built-in controls and operating modes to charge batteries from solar, discharge batteries to power loads when solar is low, and coordinate seamlessly with the storage system. They are designed from the ground up to maximize the self-consumption of on-site solar power by feeding loads first from solar and batteries before relying on power from the grid. For instance, according to Energy Information Administration (EIA) statistics that residential solar panel installations increased by 15% in 2021 compared to 2020 in the U.S. alone.
Focus shifting to residential PV installations: The rising trend of residential photovoltaic (PV) installations is having a profound impact on the global PV inverter market. With more households and small businesses installing rooftop solar panels to generate their own renewable energy and supply power back to the grid, the demand for smaller and more distributed PV inverters is surging. Previously, the PV inverter market was dominated by large utility-scale projects involving commercial solar farms. Inverters used in such projects tended to be on the higher power end of over 100kW. However, the falling costs of solar modules and supportive government policies have now made distributed solar generation economically viable for residential properties as well. For instance, according to the International Energy Agency, the number of solar rooftops installed on homes increased by 21% from 2019 to 2020 alone across major markets like the U.S., China, Europe, and Japan.
PV Inverter Market Restraints
Intermittency in solar power generation: Intermittency in solar power generation poses a major challenge for the widespread adoption of photovoltaic (PV) inverters. Solar power is dependent on the sunlight, which varies during different times of the day and weather conditions. When there is a lack of sunlight, such as during the night or on cloudy days, solar panels are unable to generate any electricity. This intermittent electricity generation creates instability in power supply and mismatches the demand and supply of power. Managing this intermittency requires large scale electricity storage solutions or balancing the grid using other renewable sources to maintain grid stability. However, energy storage technologies are still evolving and expensive for mass deployment. Balancing the grid also requires advanced forecasting tools to predict solar generation and demand. All these solutions increase the overall cost of solar projects and make solar less competitive compared to conventional power sources. This policy uncertainty and the high costs associated with intermittency have slowed down investments in utility scale solar projects in many countries. For instance, according to the International Renewable Energy Agency (IRENA), "Utility-scale solar PV deployment reached 211 gigawatts globally last year, but only 13.1GW of the total utility-scale storage capacity was paired with solar plants, representing just 6% of total solar PV capacity.
Lack of proper regulatory policies: Lack of proper regulatory policies is significantly restraining the growth of PV inverter market. Without appropriate regulations and guidelines, the installation and usage of solar PV inverters are not streamlined. This creates uncertainty among both manufacturers and consumers. Manufacturers do not have clarity on the technical standards and testing protocols they need to comply with to ensure safety and grid stability. They end up investing more time and resources in multiple design iterations to conform to changes in norms. This pushes up their costs and makes the inverters expensive for customers. On the consumer side, the absence of strong policies on subsidies, net metering or roof ownership rights discourages many from adopting rooftop solar systems. Many countries are still in the process of developing cohesive regulatory frameworks for micro-grid connectivity and virtual net metering. Without set rules for data sharing, safety shutdowns, and energy accounting, widespread integration of decentralized solar and storage is difficult. This constitutes a large untapped market for PV inverters. Moreover, where regulations do exist, the lack of stringent enforcement and monitoring hampers the evolution of quality standards. Sub-standard or non-compliant inverters can cause grid instabilities and safety hazards over time. This erodes customer confidence in the technology.
Counterbalance- Subsidies, tax rebates, and feed-in tariffs (FITs) provided by various governments to promote renewable energy use stimulate the market for PV inverters.
Recent Developments:
In May 2022, the Italian solar inverter business Fimer Spa took part in a significant solar project integrated with a storage unit in Gujarat, India. Fimer provided an inverter system with a capacity of 1 Mega Volt Ampere (MVA) to support a solar venture that includes a considerable battery storage capacity of 18MWh. The venture, known as the Integrated Solar Energy Project, is located in Modhera and was executed by the Indian EPC specialist, Mahindra Susten Pvt. Ltd., under the patronage of Gujarat Power Corporation Limited (GPCL), a state-run utility firm. Fimer is a company that specializes in innovative energy equipment, particularly solar inverters and e-mobility solutions. The company is the fourth largest solar inverter supplier in the world and has over 1100 employees worldwide. Fimer's products include AC charging systems for private indoor and outdoor use, PV solutions for residential and commercial/industrial applications, off-grid and grid-connected micro grids.
In April 2022, the Germany-based company SMA Solar Technology AG unveiled a fresh assortment of inverters designed for small-scale commercial rooftop photovoltaic (PV) installations. This new series comprises models with capacities of 12, 15, 20, and 25 kilowatts, catering to installations as large as 135 kilowatts. SMA Solar Technology AG is a German solar energy equipment supplier founded in 1981 and headquartered in Niestetal, Northern Hesse, Germany. SMA is a producer and manufacturer of solar inverters for photovoltaics systems with grid connection, off-grid power supply and backup operations.
Figure 2. Global PV Inverter Market Share (%), by Product, 2024
A solar inverter, also known as a photovoltaic (PV) inverter, is a critical component in a solar energy system. It is a type of power inverter that converts the direct current (DC) electricity generated by solar panels into alternating current (AC) electricity, which is used by electrical grids and standard AC-powered equipment. Solar inverters play a vital role in enabling the use of solar energy for residential, commercial, and industrial applications. They often incorporate special functions tailored for use with solar arrays, such as maximum power point tracking and anti-islanding protection. Solar inverters are essential for the integration of solar power into the electrical grid and for off-grid solar systems. They also facilitate monitoring and communication within the solar energy system.
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About Author
Sakshi Suryawanshi is a Research Consultant with 6 years of extensive experience in market research and consulting. She is proficient in market estimation, competitive analysis, and patent analysis. Sakshi excels in identifying market trends and evaluating competitive landscapes to provide actionable insights that drive strategic decision-making. Her expertise helps businesses navigate complex market dynamics and achieve their objectives effectively.
The global PV Inverter Market size is estimated to be valued at USD 15.28 billion in 2024 and is expected to reach USD 41.87 billion in 2031.
Intermittency in solar power generation and lack of proper regulatory policies are some factors that can hamper the growth of the PV inverter market.
Growing demand for renewable energy solutions and stringent efficiency standards are some factors driving PV inverter market growth over the forecast period.
The String PV inverter segment accounted for the largest share of the global PV Market.
Eaton, Emerson Electric Co., Power Electronics S.L., Hitachi Hi-Rel Power Electronics Private Limited, Siemens Energy, Fimer Group, SMA Solar Technology AG, Delta Electronics, Inc, SunPower Corporation, Omron Corporation are some of the major key players operating in PV inverter market.
North America is expected to account for the largest share of the PV inverter market.
The PV inverter market is expected to grow at a CAGR of 15.5% from 2024 to 2031.
Credibility and Certifications
860519526
9001:2015
27001:2022
Credibility and Certifications
860519526
9001:2015
27001:2022
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