Solar PV Inverters Market By Product Type (Central Inverter, String Inverter, Micro Inverter), Connection Type (On-Grid, Off-Grid), Application (Residential, Commercial, Industrial, Utilities), Region for 2024-2031

Solar PV Inverters Market Valuation - 2024-2031

The rapid growth in solar energy installations worldwide is driving demand for PV inverters. Thus, the increasing global solar energy capacity surges the growth of market size surpassing USD 10.43 Billion in 2024 to reach the valuation of USD 16.04 Billion by 2031.

The falling prices of solar components, including inverters, are making solar energy more accessible. Thus, the declining costs of solar PV systems enable the market to grow at a CAGR of 6.10% from 2024 to 2031.

Solar PV Inverters Market: Definition/ Overview

A solar photovoltaic (PV) inverter is a key component in solar energy systems, converting the direct current (DC) generated by solar panels into alternating current (AC) for use in homes, businesses, or the power grid. As part of the photovoltaic system's balance of system (BOS), the inverter ensures that solar energy can be used to power standard AC appliances or be fed back into the electrical grid. Solar PV inverters are equipped with advanced features like maximum power point tracking (MPPT) to optimize energy output and anti-islanding protection to ensure safety and stability during grid outages.

Solar PV inverters consist of critical components such as power transistors, transformers, and sophisticated software controls, making them essential for a wide range of applications. These include residential and commercial buildings, agricultural operations, transportation, remote power systems, and even space technology. By enabling the practical use of solar energy, inverters help promote energy independence, support environmental conservation, and reduce carbon footprints. Additionally, they offer economic benefits such as potential income through feed-in tariffs. Solar PV inverters are integral to advancing the global transition toward renewable energy, enhancing both sustainability and energy efficiency across various sectors.

What's inside a VMR industry report?

Our reports include actionable data and forward-looking analysis that help you craft pitches, create business plans, build presentations and write proposals.

How Does the Growing Demand for Grid-connected Solar Systems Surge the Growth of the Solar PV Inverters Market?

The shift towards grid-tied solar installations is increasing the need for grid-compatible inverters. According to the International Renewable Energy Agency (IRENA), grid-connected solar PV capacity grew by 22% in 2021, reaching 843 GW globally. Technological advancements in inverter efficiency and functionality. Ongoing improvements in inverter technology are driving market growth. A 2022 report by the European Technology and Innovation Platform for Photovoltaics (ETIP PV) stated that the average efficiency of PV inverters increased from 96% in 2010 to over 98% in 2022, with some models achieving up to 99% efficiency.

Rising adoption of microinverters and power optimizers. The trend towards module-level power electronics is expanding the inverter market. According to the International Energy Agency (IEA), global solar PV capacity additions reached 191 GW in 2022, a 31% increase from 2021. The IEA projects that annual solar PV additions will reach 300 GW by 2025, indicating sustained growth in the sector. Many countries are implementing policies to encourage solar adoption, boosting the inverter market. The U.S. Solar Energy Industries Association (SEIA) reported that the extension of the Investment Tax Credit (ITC) in the Inflation Reduction Act of 2022 is expected to increase solar deployment by 69% through 2027.

How the High Initial Costs and Grid Integration Challenges Impede the Growth of Solar PV Inverters Market?

The upfront cost of solar PV inverters can be a significant barrier to adoption. According to a 2021 report by the National Renewable Energy Laboratory (NREL), inverter costs accounted for approximately 5% of total system costs for utility-scale PV systems in the U.S. For residential systems, this percentage was higher, at about 10% of total installed costs. As solar penetration increases, grid operators face challenges in maintaining stability and power quality. The U.S. Energy Information Administration reported that in 2022, solar energy provided about 3% of total U.S. electricity generation. This increased integration has led to concerns about grid stability in some regions.

Changing policies and regulations can impact market growth. The Solar Energy Industries Association (SEIA) noted that in 2022, 28 U.S. states considered changes to their net metering policies, which directly affect the economics of solar PV systems and inverter demand. Global events and supply chain issues can affect the production and availability of inverters. Rapid technological advancements can lead to concerns about current investments becoming outdated. The International Energy Agency (IEA) reported in their 2021 "Trends in Photovoltaic Applications" that inverter lifespans typically range from 10-20 years, while solar panels can last 25-30 years.

Category-Wise Acumens

How the High-Capacity Grid Feeders and Wide Spread Use in Large Scale Solar Photovoltaic Systems Surge the Growth of Central Inverter Segment?

The central inverter segment holds a dominant in the global solar PV inverters market owing to its widespread use in large-scale solar photovoltaic systems with rated outputs exceeding 100 kW. Central inverters, known as high-capacity grid feeders, are typically floor- or ground-mounted and are designed to convert the direct current (DC) power generated by solar arrays into alternating current (AC) power for grid connection. These devices are capable of handling power capacities ranging from 50 kilowatts to 1 megawatt, making them suitable for both indoor and outdoor applications, especially in utility-scale solar projects.

A central inverter generally operates with a single step to convert DC into AC, though some models are equipped with a supplementary DC-DC boost stage to extend their Maximum Power Point (MPP) voltage range, enhancing performance. In some configurations, low-frequency transformers are used to increase AC voltage and provide isolation at the output. However, this can reduce efficiency while increasing the size, weight, and cost of the inverter. Despite these trade-offs, the central inverter's ability to efficiently handle large power loads makes it the preferred choice for high-capacity installations, driving its dominance in the solar PV inverters market.

How the Increasing Utility Scale Solar Projects Globally Foster the Growth of Utilities Segment?

The utilities segment dominates the solar PV inverters market, driven by the rapid growth of utility-scale solar projects worldwide. These large-scale projects are designed to generate significant amounts of electricity, often measured in megawatts (MW), which is then fed into the grid to supply power to vast numbers of households and businesses. The need for powerful, high-capacity inverters in these projects is crucial, as they must efficiently convert large amounts of solar energy from direct current (DC) to alternating current (AC) on a scale much larger than residential or commercial applications.

Utility-scale solar has long been recognized for producing clean, reliable electricity at a stable cost, making it a key contributor to reducing carbon emissions. This environmental benefit is one of the primary drivers behind the widespread installation of solar PV inverters in utility-scale projects, especially as governments and industries strive to meet carbon reduction goals. As the demand for renewable energy grows, utility-scale solar remains one of the fastest methods to transition to sustainable energy sources, increasing the need for high-performance inverters. The segment's dominance in the market is expected to continue as more large-scale solar installations come online globally.

Country/Region-wise Acumens

How do the Rapid Growth in Solar PV Installations and Supportive Government Policies and Incentives Foster the Growth of the Solar PV Inverters Market in Asia Pacific?

Asia Pacific substantially dominates the solar PV inverter market driven by the significant increase in solar PV capacity, driving demand for inverters. According to the International Renewable Energy Agency (IRENA), China alone added 100 GW of solar PV capacity in 2022, bringing its total installed capacity to over 450 GW. This represents nearly a third of global solar PV capacity. Many countries in the region have implemented favorable policies to promote solar energy adoption. In India, the Ministry of New and Renewable Energy reported that the country achieved its target of 100 GW of installed renewable energy capacity (excluding large hydro) in 2022, nine years ahead of schedule. Solar energy contributed significantly to this achievement, driven by policies like the National Solar Mission.

The falling costs of solar PV components, including inverters, have made solar energy more accessible in the region. BloombergNEF's 2022 report on solar PV module pricing showed that average module prices in China dropped to $0.27 per watt in mid-2022, a significant decrease from $0.34 per watt in early 2021. This overall cost reduction in solar PV systems has boosted demand for all components, including inverters.

How the Ambitious Renewable Energy Targets and Supportive Policies Escalate the Growth of the Solar PV Inverters Market in Europe?

Europe is anticipated to witness the fastest growth in the solar PV inverter market owing to initiatives such as the European Green Deal and the Renewable Energy Directive have played critical roles in propelling the solar PV inverter market in Europe. According to the European Commission, the EU has increased its 2030 renewable energy target from 32% to 45% under the REPowerEU Plan in 2022. This ambitious goal is expected to significantly boost solar PV installations and, consequently, inverter demand across the region. The European solar market has seen substantial growth, particularly in the residential and commercial sectors. SolarPower Europe reported that the EU added 41.4 GW of solar power capacity in 2022, a 47% increase from 2021. Germany led with 7.9 GW of new installations, followed by Spain (7.5 GW) and Poland (4.9 GW). This growth directly translates to increased demand for solar PV inverters.

Europe's focus on grid stability and smart energy management has driven demand for advanced inverter technologies. The European Technology and Innovation Platform for Photovoltaics (ETIP PV) noted in its 2022 report that smart inverters with grid-support functions are becoming increasingly important. It is estimated that by 2025, over 90% of new inverter installations in Europe will have advanced grid-support capabilities, up from approximately 60% in 2020.

Competitive Landscape

The Solar PV Inverters Market is a highly competitive landscape, driven by factors such as increasing demand for renewable energy, technological advancements, and government incentives. Several key players operate in this market, offering a range of products and services to meet the diverse needs of residential, commercial, and utility-scale solar power systems.

The organizations are focusing on innovating their product line to serve the vast population in diverse regions. Some of the prominent players operating in the solar PV inverters market include:

• SMA Solar Technology AG
• Sungrow Power Supply Co. Ltd.
• Huawei Technologies Co. Ltd.
• Schneider Electric SE
• ABB Ltd
• Tigo Energy, Inc.
• Enphase Energy, Inc.

Latest Developments:

• In February 2024, SMA Solar Technology AG announced a strategic cooperation with ENGIE, a major energy firm, to accelerate the development and deployment of distributed solar and storage systems across Europe.
• In February 2024, Sungrow Power Supply Co. Ltd. announced the launch of its latest string inverter series, the "SG iNext," claiming significant efficiency increases and better grid support capabilities.
• In January 2023, Schneider Electric SE announced the acquisition of IGE+X AO, a Russian producer of energy storage systems, to expand its position in the distributed energy sector.