Solar Micro Inverters Market Overview
The global solar micro inverters market is expected to grow at a CAGR of 15.3% during the forecast period, to reach $1,968.7 million by 2026.
Solar micro inverters refer to devices that convert direct current (DC) to alternating current (AC) used in all electrical devices. Micro inverters allow power conversion at individual module or panel level, also known as panel-level conversion. As a result, the performance of solar PV cells is not jeopardized when one or more panels are shaded. Micro inverters monitor the performance of each solar panel individually, while string inverters also exhibits the performance of each string.
GLOBAL SOLAR MICRO INVERTERS MARKET SPLIT BASED ON VALUE BY END USE (2015)
Based on system type, the solar micro inverters market has been generating highest revenue from stand-alone solar micro inverters, and residential sector has been the largest end users of solar micro inverters.
In terms of value, North America was the largest growing region in the solar micro inverters market, followed by Europe in 2015. North America and Europe collectively account for more than 73% in the solar micro inverters market and is expected to continue the trend during the forecast period. The major factor attributing to the growth is the increasing demand for electricity, government set PV targets and reduction in the cost of PV system.
Solar Micro Inverters Market Dynamics
A significant growth in demand for solar micro inverter is anticipated due to increasing consumer preference towards greater efficiency of solar power systems, rising electricity demand, increasing government investments and tariffs on photovoltaic technology and growing applications in the residential sector. However, higher initial costs are the major factors hindering the growth of the solar micro inverters market during the forecast period. Micro inverters have higher initial equipment cost as compared to traditional inverters. The cost of micro inverters depends on factors such as brand and market String inverters are sold at about one-third cost of micro inverters and this continues to be one of the biggest restraint for the growth of micro inverters market across the globe.
Some of the major factors driving the demand of solar micro inverters include drop in micro inverter prices, rising awareness towards the benefits of module-level power electronics (MLPE) technology and superiority of micro inverters over conventional systems. The drop in micro inverter prices along with various government initiatives have resulted in higher adoption of PV installations across the globe, which is expected to propel the demand for solar micro inverters during the forecast period. Additionally, the U.S., which is the leading market for solar micro inverters having larger number of PV installations in the residential sector, is expected to witness increases number of micro inverter installations in the commercial sector due to their optimal performance, cost-effectiveness and safety features. Adoption of micro inverters is also gaining traction in developing nations including Asia-Pacific due to burgeoning demand for power supply, increasing fuel prices and favorable government policies in India, Japan and Australia.
Solar micro inverters are preferred over conventional string or central inverters due to the following reasons:
Efficiency: Micro inverters allow panel-level conversion; thereby, improving the overall efficiency unlike string inverters that converts direct current (DC) to alternating current (AC) on the ground at string level.
Size and Modularity: Micro inverters are compact in size and are designed to match single module installation. Thus, micro inverters help in overcoming difficulties involved with small roof installations and also result in lesser heat loss as micro inverters do not require separate air cooling, unlike central inverters.
Performance: In case of defective panel in a micro inverter, the performance of the entire solar PV system does not get affected as this system allows individual panel monitoring. Unlike string or centralized inverters, the performance of entire PV system gets halted when one panel is defected.
These factors are expected to drive the growth of solar micro inverters market during the forecast period.
The current trend witnessed in the solar micro inverters market include growing focus towards integrated module systems, also known as AC modules. In the recent years, companies such as Enphase Energy, Inc., Solar World, Northern Electric and Power (NEP) and ETSolar Group (ET Solar), have been increasingly focusing on developing innovative and high performance integrated module systems, also known as AC modules, to meet the increasing electricity demands of customers in the global market. In September 2015, Solar World and Enphase Energy entered into a strategic partnership to develop integrated AC solar modules in the global market. These AC modules are designed to reduce the labor costs, installation time and streamlines the overall Operation and Maintenance (O&M) in the field.
In July 2015, Northern Electric and Power (NEP) and ETSolar Group (ET Solar) joined together to launch new generation AC modules in Japan that are fully integrated with the former’s BDM-300 micro inverters. These modules offer up to 25% more power than conventional PV systems and reduces up to 50% of PV system design and installation costs.
The key opportunities witnessed in the solar micro inverters market include regulatory framework and rising affordability of energy storage devices. The increasing regulatory framework pertaining to the safety of solar systems such as National Electric Code (NEC) has significantly changed the perception of consumers about micro inverters across the globe. For instance, the preeminent electrical installation code in the U.S., the NEC 2014, has mandated solar arrays to have a rapid shutdown feature. Growing awareness towards the level of solar power systems have led to other regional markets focusing on implementing similar regulations. Additionally, some of the proactive vendors and key players in the micro inverter industry have started incorporating this changing regulatory environment, which is expected to benefit in sustaining their market share during the forecast period.
Solar Micro Inverters Market Competitive Landscape
The solar micro inverters market is dominated by major players along with the presence of small scale manufacturers. Some of the key players in the global market include Enphase Energy Inc., SolarEdge Technologies, Inc., ABB Ltd, SMA Solar Technology AG, SunPower Corporation, Altenergy Power System Inc., Darfon Electronics Corp., Northern Electric & Power Co. Ltd, Sparq Systems, Inc. and Chilicon Power, LLC.