Energy and Power

Solar Inverter Market Report Cover

Solar Inverter Market

Solar Inverter Market Report Cover

Solar Inverter Market Size, Share, Growth & Industry Analysis, By Product Type (Central Inverters, String Inverters, Microinverters, Hybrid Inverters), By Connection Type, By Voltage, By Phase, By Application and Regional Analysis, 2024-2031

Author : Saket A.

Pages : 120

Base Year : 2023

Release : March 2024

Report ID: KR529

Industrial Distribution Market Size

The global Solar Inverter Market size 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. In the scope of work, the report includes products offered by companies 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.

The solar inverter market is currently experiencing significant growth, propelled by a combination of factors that underscore the increasing shift toward renewable energy. One of the key factors supporting this expansion is the growing awareness of the environmental impact of traditional energy sources. Governments worldwide are incentivizing the adoption of solar power through various policies and subsidies, fostering a favorable market environment. Additionally, the decreasing costs associated with solar power generation have made it a more economically viable option for both residential and commercial consumers.

The imperative for grid stability is another crucial factor influencing the market's growth trajectory. As solar energy becomes an integral part of the energy mix, the need for efficient and reliable inverters to convert DC power generated by solar panels into AC power for grid connection becomes paramount. This demand is further fueled by the global push toward sustainable energy sources to mitigate climate change and reduce dependence on fossil fuels.

Technological advancements are playing a pivotal role in shaping the market landscape. The integration of smart features in solar inverters enhances their functionality, allowing for better monitoring, control, and optimization of solar power systems. These smart inverters contribute to increased energy efficiency and facilitate the integration of solar power into existing grids seamlessly.

Analyst’s Review 

The solar inverter market is experiencing robust growth, driven by several factors such as environmental awareness, government support, cost competitiveness, and technological innovations. This upward trend is expected to persist as the world intensifies its focus on sustainable energy solutions and the integration of renewable sources into the mainstream energy infrastructure.

Furthermore, strategic imperatives by key global players such as partnerships, and collaborations with governments of countries in untapped potential regions is are anticipated to foster the market outlook.

Market Definition

A solar inverter is a pivotal electronic device among solar energy systems, tasked with the conversion of direct current (DC) generated by solar panels into alternating current (AC), which can be integrated into the electrical grid or utilized for local consumption. As the linchpin of solar power systems, its primary function revolves around the efficient and secure transformation of solar energy into a readily deployable and usable form of electricity.

Operating as a sophisticated bridge between the photovoltaic system and the broader electrical infrastructure, the solar inverter is responsible for translating the variable and intermittent DC output from solar panels into a stable, synchronized AC output. Beyond its fundamental conversion role, the solar inverter further ensures synchronization with grid standards, maintains voltage and frequency parameters and facilitates seamless interconnection.

This critical role underscores the inverter's significance in maximizing the utilization of solar energy, contributing to the reliability, stability, and adaptability of solar power systems across diverse applications, including grid integration or localized energy consumption.

Industrial Distribution Market Dynamics

The growth of the solar inverter market is primarily propelled by technological advancements and declining costs.  Advancements in inverter technology emerges as a primary driving factor, fostering continuous evolution within the industry. The development of high-efficiency inverters stands out as a pivotal aspect, directly impacting the overall performance of solar power systems. These advancements boost energy yields, a critical factor in making solar power economically more viable.

Moreover, the integration of smart grid features enhances the market landscape, facilitating improved monitoring, control, and optimization of solar installations. Furthermore, the declining costs of solar panels exert a significant positive influence on the solar inverter market. As solar panel costs decrease, the overall cost of solar power systems diminishes, consequently bolstering the return on investment for solar installations. This reduction in the cost of solar energy solutions stimulates greater adoption of solar inverters across various applications.

The symbiotic relationship between technological advancements and declining solar panel costs amplifies the market's appeal, creating a favorable environment for increased deployment of solar inverters and contributing to the overall expansion of the solar energy sector. The collaborative impact of these driving factors positions the market on a robust trajectory of growth and innovation.

Despite the rapid progress made in solar inverter technology, the intermittent nature of solar energy generation continues to be a major obstacle in the development of the market. The unpredictability of solar energy poses challenges in ensuring a consistent power supply, especially during periods of limited sunlight. Although energy storage solutions are being incorporated to tackle this intermittency issue, their widespread adoption is still in the process of evolving.

Ensuring a balance between the variable nature of solar energy and the demands of the grid necessitates the implementation of sophisticated solutions and grid management strategies. This challenge is particularly prominent in applications that require a continuous supply of high power.

Segmentation Analysis

The global market is segmented based on product type, connection type, phase, application, and geography.

By Product Type

Based on product type, the market is categorized into central inverters, string inverters, microinverters, and hybrid inverters. String inverters accounted for the largest solar inverter market share of 45.32% in 2023 and is anticipated to continue its dominance over the forecast period. This dominance is projected to persist, underpinned by their widespread adoption in various solar power systems.

String inverters offer cost-effectiveness and scalability, making them preferred for both small-scale and large-scale installations. Their reliability and efficiency contribute to sustained demand, which further solidifies their foothold in the industry landscape.

By Connection Type

Based on connection type, the market is bifurcated into on-grid and off-grid. Off-grid connection type generated a significant value of USD 13.66 billion in 2023 and is estimated to grow at a CAGR of 7.23% over 2024-2031. This segment's prominence is driven by the increasing demand for standalone solar power systems, particularly in remote or rural areas where grid connectivity is limited. The off-grid segment's resilience and adaptability to diverse environments play a pivotal role in expanding access to renewable energy worldwide.

By Voltage

Based on application, the market is classified into commercial, industrial, residential, and utilities. Commercial applications dominated the solar inverter market in 2023, accounting for a significant value of USD 8.50 billion. The growth of the segment is propelled by rising corporate sustainability initiatives, favorable government policies, and cost savings from solar power adoption.

Increased awareness of environmental impact and the rising need to reduce operational expenses drive businesses to invest in solar energy solutions, leading to a boost in demand for commercial solar inverters. However, residential applications are anticipated to experience the highest CAGR of 9.43% over 2024-2031. This shift is propelled by escalating residential solar installations, which are driven by factors such as decreasing solar panel costs, government incentives, and growing environmental consciousness among homeowners.

The residential segment's expansion underscores the increasing role of distributed solar energy generation in meeting residential power needs and reducing dependence on conventional grid electricity.

Industrial Distribution Market Regional Analysis

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

Solar Inverter Market Size & Share, By Region, 2024-2031

The Asia Pacific Solar Inverter Market share stood around 54.01% in 2023 in the global market, with a valuation of USD 14.09 billion. This dominance is mainly attributed to booming economies such as China and India, which have led to a surge in energy demand, thereby driving the need for solar inverters. Additionally, ambitious renewable energy targets and supportive government policies have incentivized the adoption of solar power solutions in the region.

Moreover, the decreasing costs of solar panels and the increasing awareness of clean energy alternatives have further contributed to the expansion of the regional market. Substantial investments in large-scale solar projects and increasing adoption of residential solar solutions solidified the Asia-Pacific region's position as the leading region in the solar inverter industry.

Europe, an established solar inverter market, was valued at USD 3.65 billion in 2023. This growth is mainly driven by the region's ambitious climate goals and increasing concerns about energy security, which have led to a strong emphasis on renewable energy sources. The implementation of stringent feed-in tariffs and supportive policies such as net metering further encourages the adoption of solar power and drives the demand for solar inverters.

However, Europe faces potential challenges due to market saturation and intense competition. Nonetheless, the region's commitment to innovation and technological advancements, particularly in areas such as microinverters and smart grid integration, ensures its continued significance in the global market.

Competitive Landscape

The solar inverter market report will provide valuable insight with an emphasis on the fragmented nature of the industry. Prominent players are focusing on several key business strategies such as partnerships, mergers and acquisitions, product innovations, and joint ventures to expand their product portfolio and increase their market shares across different regions.

Manufacturers are adopting a range of strategic initiatives, including investments in R&D activities, the establishment of new manufacturing facilities, and supply chain optimization, to strengthen their market standing.

List of Key Companies in Solar Inverter Market

  • ABB
  • SMA Solar Technology AG
  • Enphase Energy
  • SolarEdge
  • Fronius International GmbH
  • Delta Electronics, Inc.
  • KACO new energy GmbH
  • Schneider Electric
  • OMRON Corporation
  • Eaton

Key Industry Development

  • August 2023 (Expansion) – Siemens announced its intention to expand its manufacturing capabilities in the United States. The expansion also involved the establishment of a new factory to produce utility-scale string inverters, with a capacity of 800 MW per year starting from 2024. The manufacturing operations at the facility would be carried out by Siemens' manufacturing partner, Sanmina. The inverters produced at the factory will be the Blueplanet brand, following Siemens' acquisition of Kaco's inverter business in 2019.

The Global Solar Inverter Market is Segmented as:

By Product Type

  • Central Inverters
  • String Inverters
  • Microinverters
  • Hybrid Inverters

By Connection Type

  • On-Grid
  • Off-Grid

By Voltage

  • Less than 10 kW
  • 10 kW - 100 kW
  • More than 100 kW

By Phase

  • Single Phase
  • Three Phase

By Application

  • Commercial
  • Industrial
  • Residential
  • Utilities

By Region

  • North America
    • U.S.
    • Canada
    • Mexico
  • Europe
    • France
    • U.K.
    • Spain
    • Germany
    • Italy
    • Russia
    • Rest of Europe
  • Asia-Pacific
    • China
    • Japan
    • India
    • South Korea
    • Rest of Asia-Pacific
  • Middle East & Africa
    • GCC
    • North Africa
    • South Africa
    • Rest of Middle East & Africa
  • Latin America
    • Brazil
    • Argentina
    • Rest of Latin America.
  • Check Icon Additional Company Profiles
  • Check Icon Additional Countries
  • Check Icon Cross Segment Analysis
  • Check Icon Regional Market Dynamics
  • Check Icon Country-Level Trend Analysis
  • Check Icon Competitive Landscape Customization
  • Check Icon Extended Forecast Years
  • Check Icon Historical Data Up to 5 Years
Frequently Asked Questions (FAQ's)
The global market is projected to reach USD 47.12 billion by 2031, growing at a CAGR of 7.75%% from 2024 to 2031.
The global market was valued at USD 26.09 billion in 2023.
The major driving factor for the market growth are energy transition and grid modernization coupled with favourable government strategies.
Top manufacturers of solar inverter are 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.
Asia-Pacific is the fastest growing region with the CAGR of 8.54% in the forecasted period (2024-2031) with the market value forecasted to reach at USD 27.12 billion in 2031.
By product type, string inverters will hold the maximum share in the market with the revenue value of USD 17.81 billion in 2031.
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