Energy and Power

Solar Inverter Market is Expected to Reach USD 47.12 Billion by 2031

May 2024

Energy and Power

As per the report published by Kings Research, the global Solar Inverter Market was valued at USD 26.09 billion in 2023 and is projected to reach USD 47.12 billion by 2031, growing at a CAGR of 7.75% from 2024 to 2031.

The solar inverter market is undergoing a transformative shift toward decentralized energy production, which reflects a widespread industry emphasis on rooftop solar installations and distributed generation. This shift is reshaping the market dynamics, with a notable surge in demand for inverters tailored to smaller-scale applications. Rooftop solar installations are increasingly gaining popularity among residential and commercial consumers, driven by factors such as increased energy independence, reduced reliance on traditional power grids, and a commitment to sustainable practices. In response to the evolving landscape, the solar inverter sector is witnessing a continuous influx of research and development initiatives. Industry players are focusing on enhancing the efficiency of inverters while simultaneously reducing costs to make solar energy even more accessible. These efforts contribute to the dynamic nature of the market, fostering innovation and competition among manufacturers to deliver cutting-edge solutions.

Another noteworthy trend shaping the solar inverter market is the integration of energy storage solutions. This development allows for optimal utilization of solar energy during periods of low sunlight or non-daylight hours. The pairing of inverters with energy storage systems enhances the overall reliability and resilience of solar power installations, addressing intermittency challenges and providing a more consistent power supply.

Key Insights

  • Based on application, the commercial segment held the largest market share of 32.57% in 2023
  • Based on product type, the string inverter segment generated the highest revenue of USD 11.82 billion in 2023
  • Based on connection type, the on-grid classification segment is anticipated to generate a value of USD 23.30 billion by 2031
  • On the basis of region, Asia-Pacific accounted for the largest market share of 54.00% in 2023

Dual Acquisition by TSG Strengthens its Presence Across Europe and Africa

July 2023: TSG's acquisitions of JCM Solar and EEG further solidified its presence in the solar energy sector. With ongoing photovoltaic projects in multiple countries, TSG is reinforcing its commitment to promoting sustainable mobility in Europe and Africa, offering a diverse range of products in its portfolio.

Supportive Government Strategies to Favor Market Growth

Government incentives and policies have emerged as major factors fueling the growth of the solar inverter market, fostering a climate conducive to the widespread adoption of solar energy. Across the globe, governments are implementing various measures, ranging from subsidies to feed-in tariffs, aimed at incentivizing businesses and individuals to invest in solar power solutions, thereby propelling the demand for solar inverters.

In the European Union (EU), for instance, there are ambitious strategies in place aimed at facilitating the transition to a low-carbon economy. The European Green Deal, along with the EU's commitment to achieving climate neutrality by 2050, underscore a robust push towards renewable energy, positioning solar inverters as crucial components in attaining these objectives. Initiatives such as the Clean Energy for All Europeans package reinforce the commitment to supporting the deployment of renewable energy technologies, with solar inverters playing a pivotal role in the overall energy transition.

In 2023, the International Energy Agency (IEA) reported a surge in global renewable capacity, with solar photovoltaic installations leading the way. This underscores the effectiveness of government incentives in driving the adoption of solar technologies, including solar inverters. The integration of these incentives into national energy strategies creates an environment where the solar inverter market is poised to experience sustained growth, as governments worldwide recognize the pivotal role solar energy plays in achieving a sustainable and resilient energy future.

Energy Transition and Grid Modernization to Offer Lucrative Growth Opportunities

A promising opportunity for the solar inverter market growth lies in the ongoing global energy transition and the simultaneous modernization of electrical grids. As countries strive to reduce carbon emissions and transition to cleaner energy sources, there is a growing emphasis on integrating renewable energy technologies, including solar power, into the existing grid infrastructure. This transition creates a favorable environment for the widespread adoption of solar inverters, as they play a pivotal role in facilitating the seamless integration of solar energy into the grid.

Grid modernization initiatives, such as the deployment of smart grids and advanced energy management systems, create a favorable environment for the integration of solar inverters with enhanced functionalities. The ability of solar inverters to contribute to grid stability, provide reactive power support, and participate in demand response programs aligns with the objectives of grid modernization efforts. The increasing focus on decentralized energy production and the need for grid resilience further highlight the significance of solar inverters in shaping the future energy landscape.

North America to Experience a Substantial CAGR of 7.91% Due to Increasing Solar Energy Awareness

Based on region, the global solar inverter market is classified into North America, Europe, Asia Pacific, MEA, and Latin America.

North America held a prominent share accounting for 18.00% in 2023. Several factors such as economic stability, an increasing awareness of environmental issues, and supportive federal and state-level policies such as tax credits are promoting regional market growth. However, the North American market is mature and characterized by intense competition, thereby requiring market players to continually innovate and optimize costs to maintain competitiveness. Additionally, trade policies and efforts to modernize the grid infrastructure have a significant impact on the dynamics of the market. Moreover, North America's focus on integrating smart grid technologies, implementing energy storage solutions, and promoting distributed generation is crucial in maintaining its strong position in the global solar inverter market.

Market Leaders Concentrate on Collaborations and Acquisitions to Sustain Growth

The global Solar inverter market is fragmented with key players such as ABB, SMA Solar Technology AG, Enphase Energy, SolarEdge, Fronius International GmbH, Delta Electronics, Inc., KACO new energy GmbH, Schneider Electric, OMRON Corporation, Eaton and others. Companies employ a variety of strategic measures such as acquisitions, mergers, partnerships, product introductions, and collaborations to expand their business globally and enhance their competitive position.

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