Photovoltaic (PV) Inverter Market by Product, Type, and Geography - Forecast and Analysis 2023-2027

Photovoltaic Inverter Market Forecast 2023-2027

The photovoltaic (PV) inverter market size is forecast to increase by USD 4.05 billion at a CAGR of 7.3% between 2022 and 2027. Market growth in the solar energy sector is influenced by several factors, including the increasing demand for renewable energy sources as a sustainable alternative to traditional fossil fuels. Additionally, the declining levelized cost of energy (LOCE) associated with solar energy generation, coupled with decreasing costs of photovoltaic inverters, enhances the economic viability of solar power systems. Moreover, government regulations and policies aimed at promoting and supporting solar power generation further bolster market expansion. These regulations often include incentives such as tax credits, feed-in tariffs, and renewable energy targets, which encourage investment in solar energy infrastructure. With a growing emphasis on environmental sustainability and the need to reduce carbon emissions, the market is poised for significant growth, driven by ongoing technological advancements and supportive regulatory frameworks.

What will be the Size of the Market During the Forecast Period?

To learn more about this report, View Report Sample

Market Segmentation

The market is pivotal in the solar energy system, converting DC (direct current) power generated by solar photovoltaic (PV) panels into alternate current (AC) power for utility use. Leading players like First Solar and Silicon Ranch drive innovation, offering solar PV inverters that optimize performance and reliability. With initiatives like the Inflation Reduction Act and support from organizations like the International Renewable Energy Agency (IRENA), there's a push for clean and sustainable energy solutions. As the levelized cost of electricity decreases, demand for advanced central and string inverters rises, shaping the landscape of the solar inverter market.

This market report extensively covers market segmentation by product (string, central, and micro), type (on-grid and off-grid), and geography (APAC, Europe, North America, Middle East and Africa, and South America). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.

By Product 

The market share growth by the string segment will be significant during the forecast period. The string inverter segment accounted for the largest share of the market in 2022. A string inverter is connected to a series of solar panels called a solar array. In recent years, the demand for solar string inverters has increased with the growing interest in renewable power sources. A solar string inverter is an important part of a photovoltaic system as it converts the direct current (DC) produced by solar panels into alternating current (AC) that can be used to power your home or business. Decreasing the cost of solar panels, making solar power affordable for homeowners and businesses, has increased the demand for the market.

Get a glance at the market contribution of various segments View the PDF Sample

The string segment was valued at USD 3.85 billion in 2017. Governments around the world are offering incentives to install solar power systems,  increasing the demand for string inverters. Another factor driving the demand for solar string inverters is their reliability and efficiency. String inverters are designed to handle large amounts of power, making them suitable for use in commercial and industrial environments. It is also highly efficient and can convert the direct current produced by solar panels into alternating current that can be used to power buildings. Furthermore, the growing awareness of the importance of reducing carbon emissions and protecting the environment has led many people to seek renewable power sources such as solar power. Solar string inverters are expected to play a key role in enabling the harnessing of solar power and become an integral part of the transition to a more sustainable future, spurring the growth of the market during the forecast period. 

By Region

For more insights on the market share of various regions Download PDF Sample now!

APAC is estimated to contribute 52% to the growth of the market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. The market in the APAC region is driven by the increasing adoption of renewable power and favorable government policies and incentives to support the development of the solar power industry. China is the largest market in the Asia-Pacific region and accounts for a large share of the world's production.

Moreover, the Chinese government has set ambitious targets for renewable power development, including increasing the share of non-fossil fuels in primary power consumption from 16% in 2020 to 20% by 2025. For both residential and utility applications. Other countries in the Asia-Pacific region, such as Japan, South Korea, and Australia, are also experiencing significant growth in the photovoltaic industry, increasing the demand for photovoltaic inverters. APAC is, therefore, a significant market, and growth in renewable energy development in the region is expected to further drive the demand for the market during the forecast period. 

Market Dynamics and Customer Landscape

The market plays a crucial role in solar energy systems, converting direct current (DC) power from solar photovoltaic (PV) panels into alternate current (AC) for utility use. Major players like First Solar and Silicon Ranch are driving innovation in solar PV inverters, enhancing efficiency and reliability. Industry events like the World Future Energy Summit highlight advancements in solar energy industries. Technologies like central inverters are optimizing electrical systems for improved performance. Government initiatives such as the Inflation Reduction Act are fostering growth in the adoption of utility frequency systems, shaping the future of the market. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.

Key Market Driver

Rising demand for renewable energy is notably driving market growth.  The rising demand for renewable energy is a key driver of the market. As people and businesses become more aware of the environmental benefits of renewable power, photovoltaic systems have become a popular choice for power generation. Governments around the world also recognize the importance of renewable energy and promote its use through policies and incentives. For example,  many governments grant subsidies and tax credits for installing solar power systems. This will create a favorable market environment for manufacturers as more people will invest in solar energy systems.

In addition, environmental benefits and government support, the falling cost of solar panels, and the increased efficiency of photovoltaic inverters have made solar power systems more affordable and attractive to consumers. As a result, the demand is growing rapidly. Overall, the increasing demand for renewable energy is driving the growth of the market as more people and businesses adopt photovoltaic systems to meet their power demands.

Significant Market Trends

The rapid growth of smart cities is a key trend influencing market growth. The demand for smart cities is growing worldwide due to the need to improve urban sustainability, power efficiency, and quality of life. Smart cities often have advanced energy management systems that use data and analytics to optimize power use and reduce costs. Photovoltaic inverters can play a key role in these systems, integrating solar power into the grid and providing real-time data on energy production and consumption. This helps city planners make informed decisions about energy management and optimize the use of renewable power sources such as solar energy.

Overall, the smart city demand is driving the growth of the market for advanced high-capacity models specifically designed for utility-scale applications. As more cities and urban areas around the world become smarter and adopt renewable power sources such as solar power, the demand is expected to further increase, which will have a positive impact on the growth of the PV Inverter Market during the forecast period.

Major Market Challenge

The high initial investment and maintenance costs for solar PV systems are challenging the market. Photovoltaic systems have significantly reduced material costs but require a high initial investment. The main reason for the high investment rate is that panels require large areas to generate a lot of power. Intermittency issues that reduce the efficiency of solar panels force consumers to install more solar panels than necessary to meet their power needs, increasing both the initial investment and ongoing maintenance costs. 

Therefore, the owner must bear the cost of all maintenance of the solar panel. Also, the cost of maintaining solar panels discourages smaller consumers from using solar power systems for their homes, creating additional costs. For example, solar panels must be inspected within a year and a home inspection costs about USD 0.023-0.03/watt/year. This will impose a heavy burden on home users and limit the use of residential solar panels and solar cover glass. Therefore, high initial investment and maintenance costs are expected to hamper the growth of the market during the forecast period. 

Market Customer Landscape

The market report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the market forecasting report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.

Market Customer Landscape

Who are the Major Market Players?

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

• ABB Ltd: The company offers solar power solutions that optimize the performance, reliability, and return on investment of any solar installation, from rooftop, commercial, and industrial applications to utility-grade power plants. 

The report also includes detailed analyses of the competitive landscape of the market and information about 16 market companies, including:

• Canadian Solar Inc.
• Danfoss AS
• DARFON ELECTRONICS CORP.
• Delta Electronics Inc.
• Eaton Corp. Plc
• Enphase Energy Inc.
• Fronius International GmbH
• General Electric Co.
• Huawei Technologies Co. Ltd.
• OMRON Corp.
• Powerone Micro Systems Pvt. Ltd.
• Schneider Electric SE
• Siemens AG
• Sineng Electric Co. Ltd.
• SMA Solar Technology AG

Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.

Segment Overview

The market research report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027. 

• Product Outlook 
  • String
  • Central
  • Micro

• Type Outlook 
  • On-grid
  • Off-grid

• Region Outlook 
  • North America
    • The U.S.
    • Canada
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • South America
    • Chile
    • Brazil
    • Argentina
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa

Market Analyst Overview

The market is witnessing robust growth, driven by factors such as the rising demand for clean energy and the adoption of renewable energy solutions to combat harmful GHG emissions. Organizations like the Energy Information Administration (EIA) and the Solar Energy Industries Association play pivotal roles in promoting solar energy adoption. These inverters facilitate the conversion of captured sunlight into usable electricity for both large scale solar power plants and rooftop installations, ensuring enhanced efficiency and overall system performance. With advanced monitoring and control systems, including Enphase IQ Microinverters and Flex, the market offers user-friendly solutions for residential PV inverter applications, integrating smart home technology and mobile apps for enhanced monitoring. Additionally, advancements in microinverter technology, such as PVS-100 Inverters, are driving cost-efficient and decentralized solar systems for rural electrification projects and off-grid applications, contributing to the clean energy transition worldwide.

Further, the market is experiencing significant growth due to factors such as the increasing adoption of solar energy and the development of solar PV projects supported by government programs and Feed-in Tariffs (FiTs). This growth is particularly notable in emerging countries where there is a rising demand for reliable and clean energy solutions. The market offers various types of inverters, including String PV inverters and three-phase PV inverters, known for their flexibility, shading tolerance, and cost-effectiveness. Additionally, advancements in off-grid technology and improved energy storage solutions, such as batteries, contribute to the market's operational flexibility and grid compatibility. With favorable incentive programs and supportive governmental initiatives, the market is poised for continued expansion and technological advancement.

Further, the market is witnessing a surge in demand with the rise of microgrids and the growing adoption of AC (alternating current) power. As solar PV deployments increase, there's a noticeable trend in product adoption driven by favorable customer preferences and government incentives like Feed-in Tariffs (FiTs). With cost-effective solutions available in the String PV inverter market, industry participants are experiencing healthy growth and swift industrial development through commercialization and collaborations. Additionally, the market sees utilization in off-grid applications such as water pumping and telecommunications, further fueling its momentum. Enhanced grid compatibility and smart home integration highlight the market's advanced technology and user-friendly solutions, making it a key player in the transition towards decentralized PV systems for both large scale deployment and small-scale solar installations.

Market Scope
Report Coverage	Details
Page number	171
Base year	2022
Historic period	2017-2021
Forecast period	2023-2027
Growth momentum & CAGR	Accelerate at a CAGR of 7.3%
Market growth 2023-2027	USD 4.05 billion
Market structure	Fragmented
YoY growth 2022-2023(%)	6.27
Regional analysis	APAC, Europe, North America, Middle East and Africa, and South America
Performing market contribution	APAC at 52%
Key countries	US, China, India, Japan, and Vietnam
Competitive landscape	Leading Companies, market positioning of Companies, competitive strategies, and industry risks
Key companies profiled	ABB Ltd., Canadian Solar Inc., Danfoss AS, DARFON ELECTRONICS CORP., Delta Electronics Inc., Eaton Corp. Plc, Enphase Energy Inc., Fronius International GmbH, General Electric Co., Huawei Technologies Co. Ltd., OMRON Corp., Powerone Micro Systems Pvt. Ltd., Schneider Electric SE, Siemens AG, Sineng Electric Co. Ltd., SMA Solar Technology AG, SolarEdge Technologies Inc., Sungrow Power Supply Co. Ltd., SunPower Corp., and Yaskawa Solectria Solar
Market dynamics	Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and market condition analysis for the forecast period.
Customization purview	If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized.

View the PDF sample

What are the Key Data Covered in this Market Research Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the market growth and forecasting of the market between 2023 and 2027
• Precise estimation of the market size and its contribution to the parent market
• Accurate predictions about upcoming market trends and analysis and changes in consumer behavior
• Growth of the market across Europe, North America, APAC, South America, and Middle East and Africa
• Thorough market growth analysis of the market’s competitive landscape and detailed information about companies
• Comprehensive market analysis and report on the factors that will challenge the market research and growth of market companies

We can help! Our analysts can customize this market research report to meet your requirements. Get in touch