Grid Forming Inverter Market Size & Share Analysis - Trends, Drivers, Competitive Landscape, and Forecasts (2025 - 2032)

Grid-Forming Inverter Market Size

Grid-Forming Inverter Market Trends and Growth Drivers

Global Shift to Renewable Energy Is Key Trend

Renewable energy sources, such as solar, wind, and energy storage technologies, are becoming increasingly popular as countries and governments work to reduce carbon emissions. As a result, there is now a greater requirement for grid-forming inverters to facilitate the seamless integration of these variable energy sources into the grid.

Many countries have formulated strategies to ensure a sustainable energy supply. Initiatives have been implemented to encourage residents to adopt solar, biomass, wind, and hydroelectric energy sources.

In May 2023, Portland General Electric unveiled its grid-forming inverter at the Wheatridge Renewable Energy Facility in Oregon, which combines wind, solar, and energy storage systems in one place.

In January 2022, Ameresco Inc. won a contract for the Slemon Park Microgrid project in Prince Edward Island, Canada, on which it worked with Prince Edward Island Energy Corporation. The project includes a 10-MW solar installation, paired with DC-coupled energy storage using a shared interconnection configuration.

Increase Environmental Concerns and Sustainability Goals Drive Market

With countries’ growing concerns over energy security, there is a strong push for more-decentralized and resilient power systems. Grid-forming inverters allow for the creation of microgrids and off-grid solutions, which are crucial in providing energy independence and reliability, especially in remote and disaster-prone areas. They help in stabilizing local grids by ensuring power availability even when connection to larger national grids is not possible.

In December 2024, Origin Energy formally authorized Fluence to move forward with the 300-MW/650-MWh Mortlake battery project, which will be constructed beside an existing gas generator in western Victoria.

Recent developments in the inverter technology, including the integration of grid-forming capabilities, make it easier to incorporate renewable energy into the grid. These technological advancements make these power conversion systems more reliable, cost-effective, and efficient, driving adoption across both large-scale utility grids and the smaller microgrids.

Grid Code Compliance and Standardization Key Challenge

Certain factors restrict the wide use of grid-forming inverters, the biggest of which is the different grid codes and standards across countries. In order to guarantee the reliable, secure, and effective functioning of the electrical grid, utilities created a set of technical standards and guidelines, known as grid codes. Synchronous generators provide critical grid functions, such as inertia, frequency regulation, and voltage control. These codes were first created under the presumption that they would be the primary source of electricity generation.

Many existing grid codes do not recognize the capabilities of inverters to provide frequency regulation, voltage control, and fault ride-through similar to synchronous generators. The lack of grid code provisions for inverters creates a regulatory mismatch and complicates the approval process for their installation.

Grid-Forming Inverter Market Analysis

Type Insights

• The central category holds the significant market share in 2024.
• This is because of the growing use of these inverters in large-scale applications, particularly in hybrid power systems, utility-scale solar facilities, and microgrids.
• These variants can regulate voltage and frequency; this is necessary for grid-forming configurations, which are becoming increasingly popular as the world shifts toward decentralized grids and renewable energy.
• The string category dominates the market.
• This is because of the growing usage of these inverters in microgrids and hybrid energy systems.
• The Uttarakhand New and Renewable Energy Development Agency (UREDA) has placed an INR 30.2-crore order for a 5.6-MW on-grid rooftop solar power plant with Servotech Power Systems Ltd.
• In October 2024, Hitachi Hi-Rel Power Electronics Private Limited exhibited a range of grid-tied solar string inverters from 5 to 255 kW at the Renewable Energy India (RFI) 2024 Expo.

The types analyzed in this report are:

• Micro Inverters (Fastest-Growing Category)
• Central Inverters
• String Inverters (Largest Category)

Voltage Insights

• The 301–500 V category holds the largest market share, of around 45%, in 2024.
• This is because 300–500-V inverters are widely used in commercial- and industrial-scale solar installations. These systems require a balance between power capacity and cost-efficiency, and inverters within this voltage range are an optimal choice for medium-to-large-scale installations.
• The above 500 V category will grow at the highest CAGR during the forecast period. This is because for large-scale energy systems, inverters with greater voltage ranges tend to be more efficient.
• Higher-voltage grid-forming inverter integration is rising with an increase in the number of solar and storage projects.
• These systems are utilized in utility-scale solar power plants, grid-forming applications, and microgrids where larger capacities are needed.

The voltages analyzed in this report are:

• 100–300 V
• 301–500 V (Largest Category)
• Above 500 V (Fastest-Growing Category)

Power Rating Insights

• The below 50 kW category holds a significant market share in 2024.
• This is because below-50-kW inverters are widely used by residential colonies and small businesses.
• A rising number of residential and small businesses are using solar power and energy storage solutions to utilize decentralized, renewable energy systems better.
• In March 2022, Fluence was chosen by AGL to deliver a 50-MW/50-MWh energy storage system featuring advanced grid-forming capabilities for the Broken Hill Battery Energy Storage System, a project funded by ARENA.
• The 50–100 kW category holds the largest share of around, of around 55%, and it will also grow at the highest CAGR during the forecast period.
• Grid-forming inverters with a power rating of 50–100 kW are suitable for commercial and industrial uses.
• For medium-sized installations that need dependable power generation and grid stability, such as factories, commercial buildings, and expansive campuses, these systems are ideal.
• The need for inverters in this power range is rising as more companies are using renewable energy generated onsite to achieve sustainability objectives.
• These variants are also ideal for hybrid and microgrid systems, which require grid-forming inverters to stabilize the local grid.

The power ratings analyzed in this report are:

• Below 50 kW
• 50–100 kW (Largest and Fastest-Growing Category)
• Above 100 kW

End Use Insights

• The commercial category holds the largest market share, of around 60%, in 2024.
• This is because of the growing use of renewable energy solutions by commercial installations, such as offices, hospitals, shopping malls, and hospitals, to achieve regulatory compliance, reduce operational costs, and accomplish sustainability goals.
• Commercial grid-forming inverters are developing to offer improved energy management, grid stability, and integration with smart grid technologies.
• The demand for commercial grid-forming inverters will increase further as these technologies become more dependable and affordable.
• The residential category will grow at the highest CAGR during the forecast period.
• This is because the sector is experiencing a rapid growth in the adoption of solar power systems, as residents seek to increase energy independence, reduce energy costs, and take advantage of government incentives.

The end use analyzed in this report are:

• Commercial (Largest Category)
• Residential (Fastest-Growing Category)
• Others

Application Insights

• The solar PV plant category holds the largest market share, of around 50%, in 2024.
• This is because solar PV plants are emerging as a leading solution to the world’s emission problems.
• To accomplish sustainability goals and lessen the dependence on fossil fuels, governments, corporations, and people are making significant investments in solar energy projects.
• When it comes to large-scale installations, solar PV is the most-accessible and scalable renewable energy source.
• As per the IEA, in the total renewable capacity additions in 2023, solar PV had an almost 75% share.
• Moreover, as per the International Renewable Energy Agency (IRENA), from 2022–2023, solar energy costs dropped 12%, the most among all renewable technologies.
• The energy storage systems category will grow at the highest CAGR during the forecast period.
• This is because of the growing demand for grid stability, energy independence, renewable energy integration, and resilience, which makes grid-forming inverters essential for enhancing the performance of energy storage systems.
• As per estimates, 410,500 MW of energy storage capacity could be added in 2030, rising significantly from 56,200 MW in 2024.

The applications analyzed in this report are:

• Solar PV Plants (Largest Category)
• Energy Storage Systems (Fastest-Growing Category)
• Electric Vehicles
• Wind Power Plants
• Others

Regional Analysis

APAC dominates the global grid-forming inverter market with around 40% revenue share in 2024.

India, Japan, and China lead in renewable energy capacity additions. As they invest heavily in wind, solar, and other renewable sources, grid-forming inverters will be integrated to feed a stable supply of renewable energy to the grid. This is crucial to provide backup during intermittent generation and prevent blackouts. In December 2024, Rongke Power completed a 175-MW/700-MWh vanadium redox flow battery project in China, the largest of its kind globally.

In 2022, the Japanese government adopted the IFC standard known as the Smart Energy Grid Architecture Model (SGAM) as the three-dimensional framework model for facilitating information exchange among different components of an energy system. As a result, this traditional model has been extended to provide a comprehensive understanding of the energy system, incorporating the interactions between heat and electric systems, as well as between the gas and electric systems.

Additionally, in 2023, a master plan for a national interconnection system was created to strategically enhance the efficient transmission of electricity to areas with high demand. Moreover, in 2024, the large-scale management of supply and demand operations was fully initiated. The government also announced plans to release wide-area reserve ratio forecasts, measures to increase supply capacity during periods of tight electricity supply and demand, and actions to be taken during power supply-demand crises, including crises, alerts, rolling blackouts, and related measures.

Further, as per the Ministry of New and Renewable Energy (MNRE), India ranked fifth globally in solar PV deployment, as of June 2023, with an installed solar power capacity of approximately 70.10 GW.

Europe is the fastest-growing regional market during the forecast period. This is because of the growth in the adoption of renewable energy, particularly wind power, solar, and energy storage projects. This shift is part of the broader effort to reduce carbon emissions and transition to cleaner energy.

As per the European Environment Agency, 24.1% of the EU’s energy was generated cleanly in 2023. Moreover, member countries target to increase the share of renewables in their energy mix to 66% by decade-end.

Germany is using grid-forming inverters to integrate large-scale solar and wind projects into the grid, ensuring stability despite the variability of renewable sources. Similarly, the U.K. is investing in five new renewable energy projects, including a 300-MW power station in Scotland, set for completion in 2024, to boost renewable energy generation and grid reliability.

The regions and countries analyzed for this report include:

North America

• U.S. (Larger and Faster-Growing Country Market)
• Canada

Europe (Fastest-Growing Regional Market)

• Germany (Largest Country Market)
• U.K.
• France
• Italy (Fastest-Growing Country Market)
• Spain
• Rest of Europe

Asia-Pacific (APAC) (Largest Growing Regional Market)

• China (Largest Country Market)
• Japan
• India (Fastest-Growing Country Market)
• South Korea
• Australia
• Rest of APAC

Latin America (LATAM)

• Brazil (Fastest-Growing Country Market)
• Mexico (Largest Country Market)
• Rest of LATAM

Middle East and Africa (MEA)

• South Africa
• U.A.E (Largest Country Market)
• Saudi Arabia (Fastest-Growing Country Market)
• Rest of MEA

Grid-Forming Inverter Market Share

This market is fragmented because there are few large players, such as Schneider Electric, GE, ABB, and FIMER. The market also has numerous smaller and regional players, who cater to specific market segments, geographical areas, and technological niches. The market is still evolving with innovations in the technologies for storage integration, renewable energy sources, and grid management. Small companies and startups could focus on specialized technologies, such as energy storage inverters or hybrid inverter systems, rather than offering comprehensive EPC solutions.

Grid-Forming Inverter Market News

• In December 2024, SolarEdge Technologies Inc. announced the availability of its first commercial storage system for the German market. The new CSS-OD battery, when paired with SolarEdge’s solar inverter and power optimizer solution, provides commercial businesses with a highly integrated, high-efficiency solar and storage solution for self-consumption.
• In September 2024, Growatt New Energy presented a wide array of solar and energy storage products tailored to U.S. households and businesses at the RE+ 2024 event in Anaheim, California.
• In September 2024, GE Vernoca won a contract for integrated battery energy storage systems from Quinbrook for the stage 1 & 2 of the latter’s Supernode Storage project in Queensland.
• In February 2024, ABB Ltd. announced plans to acquire SEAM Group, a provider of industrial asset management and advisory services, to expand its portfolio of electrification solutions.