Inverters and Inverter Manufacturers

InverterCosts

Inverter Cost Components; GTM Research

Inverters are key components in any photovoltaic (PV) power system.  Inverters convert direct current (DC) to alternating current (AC).  They control power factor (e.g. reactive power) and ensure power output quality aligns with downstream equipment specs.  And finally, they play an essential role in the protection, operation and communication philosophy of the solar power plant.

A central inverter, for example, is typically placed at the end of the collections cables from the solar panel strings. The inverter is then optimized for direct coupling to a transformer to step down the high voltage from the solar array for injection into the grid or off-grid demand sink.  Standout features of advanced inverters include:

  • Max power point or MPP devices to ensure DC current and voltage are optimized for maximum power output
  • A wide range of DC subcombiners (fuses or breakers),
  • Optional AC disconnect or AC breakers,
  • Support for advanced grid management, including real and reactive power,
  • Fault ride-through capabilities,
  • Power metering or electrical user interface components, and
  • Communication capabilities for power control and management systems (SCADA)and ample room inside the cabinet for easy wiring and service.
inverter

Large central inverter

Innovation and inverter technology development is attracting greater attention as gains in long-term project generation and reliability become crucial to project bankability and feasibility.  Innovation pressure is also the result of forecasted cuts in global solar incentives (i.e., FiTs) and the need for competitive PPA pricing.  Product functionality is also changing as companies seek to differentiate themselves.  The result is simple: total cost is decreasing, service benefit is increasing, and the share of relative component costs is changing.  A current benchmark for relative component costs is shown above.

Another trend in the inverter market is that the historical market leadership of EU-based inverter suppliers is rapidly declining as global demand shifts away from their domestic markets toward major PV growth markets in North America, Asia and India. The expansion of global demand has created increased competition and slower growth for manufacturers who do not diversify their sales from their domestic base.

For example, the number of Asian companies in the top 10 PV inverter suppliers more than doubled over the last year from 2 to 5 with manufacturers from China and Japan now appearing in the lead grouping.  Collectively, China and Japan represented 35 percent of global PV inverter revenue in 2013.  Asian suppliers have dominated their domestic markets given factors such as brand loyalty, tough certification requirements (in Japan), and low pricing (China).  As a result, international suppliers have failed to achieve significant foothold in these markets.

RankSupplierLocation
1SMAEurope
2ABBEurope
3SungrowChina
4Omron AsoJapan
5TMEICJapan
6TBEA PowerIndia
7KACOEurope
8GrowattChina
9Tabuchi ElectricJapan
10Advanced EnergyUSA

Domestic equipment sales by the Asian suppliers has powered the change in manufacturer rankings, but the leadership impact of the Asian suppliers in international markets still remains limited.  The Asian suppliers have repeated the same strategic focus on domestic sales that has hurt the EU suppliers.  Meanwhile, significant growth in solar installations in the last year has not helped total revenue from sales to grow significantly since increased competition has taken place and inverter prices have fallen over 20 percent in the last year.

Power One, a California company, appears well prepared to escape the strategic limitation of heavy dependence on domestic sales.  Acquired by ABB, Power One continues to hold its second place posting, which it held over the last four years.  Power One has also lead innovation in new inverter functionality.  And the ABB acquisition now gives it global reach, financial strength, and a bankable brand name that could allow it to take the lead…helped, of course, by domestic sales and rapid installation rates in the U.S.

The different type of inverters are compared below.

invertercomparisontable

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