Solar Central Inverters Market size is set to grow by USD 3.67 billion from 2024-2028, Rising investment in renewables to boost the market growth, Technavio

NEW YORK, July 10, 2024 /PRNewswire/ -- The global solar central inverters market is estimated to grow by USD 3.67 billion from 2024-2028, at a CAGR of 14.99%, driven by rising investment in renewables and growing demand for clean energy technologies. However, challenges posed by alternative energy sources remain. Key market players include ABB Ltd., Delta Electronics Inc., Eaton Corp. Plc, Fimer SpA, Hitachi Ltd., Huawei Technologies Co. Ltd., Infineon Technologies AG, Ingeteam Corp. S.A., OCI Co. Ltd., Shenzhen Growatt New Energy Technology Co. Ltd., Siemens AG, and others, as reported by Technavio.

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Key Market Trends Fueling Growth

The global electricity demand has experienced significant growth, increasing by 8% in 2021 to over 8300 TWh compared to 2020. Emerging economies, particularly in Asia, are driving this demand due to their rapid economic growth and increasing population. Traditional energy sources, such as coal, natural gas, and oil, have dominated electricity generation, accounting for 61% of the total mix in 2018. However, the reliance on these sources has led to a rise in carbon emissions, with coal accounting for the largest share at 38%. Moreover, a significant population in Asian and African countries relies on fuels like kerosene and coal for cooking, resulting in environmental pollution and health issues. The International Energy Agency (IEA) reports that 8.70 million people in South Africa and 703.20 million people in India lack access to clean cooking facilities. The high cost of conventional sources of electricity and lighting, such as diesel and kerosene, has increased the demand for off-grid solar appliances. Solar power, a clean energy technology, is gaining popularity due to its zero carbon emissions and potential to provide an alternative to high-cost conventional sources. The rising price of oil and gas is also driving the cost of derived products like kerosene, leading to increased government spending and household expenses. As a result, the demand for solar PV systems is expected to grow, providing opportunities for the solar central inverter market during the forecast period. 

The Solar Central Inverters market is witnessing significant growth, particularly in commercial buildings and renewable energy plants. Solar power transmission for reliable and continuous power supply is a top trend. String Inverters and Micro Inverters are popular choices for Solar Photovoltaic Systems. Utility-scale projects require Grid Connection, Maximum Power Point Tracking, and Low-Frequency Transformers. Input Voltage levels and BOS Components are key considerations. Monolithic and Modular Inverters offer flexibility. Multi-MPPT Trackers and Master-Slave Control Approach ensure optimal performance. Electric Grid Standards, Energy Storage Systems, and Government Efforts are driving decarbonization and electricity demand. Solar Energy is a clean alternative to polluting fossil fuels in the face of industrialization and increasing renewable energy capacity. Solar Potential, Grid Parity, Solar Irradiance, and Grid Frequency are crucial factors. Direct Current and Alternating Current systems operate at Utility Frequency. Photovoltaic Solar Panels convert sunlight into electricity, while Microgrids ensure local power supply. 

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Market Challenges

• The global solar central inverters market is expected to face challenges due to the dominance of non-renewable sources of electricity generation, particularly fossil fuels and hydropower. According to the International Energy Agency (IEA), approximately 72% of the world's electricity was generated from non-renewable sources in 2021, with coal and gas accounting for significant increases of 9.3% and 10.4% respectively. Several countries continue to rely on fossil fuels due to their abundant availability and lower cost of generation compared to renewable sources. For instance, Indonesia, which aims to achieve 23% of its renewable energy target by 2025, will still rely heavily on coal for electricity generation in the near term. Moreover, the decline in the cost of natural gas in recent years has encouraged its use in power generation, posing a challenge to solar power. In the US, shale gas production has reached record highs, while Middle Eastern countries with substantial crude oil and natural gas reserves have not reduced production output, leading to a continuous decline in oil and gas prices. These factors make non-renewable sources of energy more economically viable, hindering the demand for solar power generation and, in turn, the growth of the global solar central inverters market during the forecast period.
• The Solar Central Inverters Market is experiencing significant growth due to increasing demand for solar power in various sectors. Large buildings and residential areas are adopting solar power for power backup and environmental concerns. Infrastructural development, home loans, and home renovation projects are also driving the market. Business owners are investing in solar power for economic-friendly energy solutions. Hot prone regions and rural electrification projects are key areas of focus. Government support and expansion activities are boosting the market. New product innovations, such as off-grid inverters and large-sized solar inverters with panel level monitoring, are addressing the needs of different applications. The PV inverter market caters to both on-grid and off-grid solar power systems. On-grid solar inverters convert DC power from solar panels into AC power for use by home appliances and utilities applications. In the utilities segment, solar parks and power plants are major consumers of solar inverters. Single phase and three phase inverters cater to residential and utilities users respectively. Challenges such as heat loss and power transmission in the transmission sector are being addressed through technological advancements. The market is expected to continue growing due to increasing power supply needs and the shift towards renewable energy.

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Segment Overview 

This solar central inverters market report extensively covers market segmentation by

1. Application 
• 1.1 Utility
• 1.2 Non-utility
2. Geography 
• 2.1 APAC
• 2.2 Europe
• 2.3 North America
• 2.4 South America
• 2.5 Middle East and Africa

1.1 Utility-  The utility segment dominated the global solar central inverters market in 2023, accounting for the largest share due to the increasing number of utility-scale solar projects. Utility-scale solar plants generate solar power and feed it into the main grid, making central inverters essential components. These projects, with a capacity of 1 MW or higher, are driven by government policies and corporate targets to expand power generation capacity, meet rising energy demand, and reduce grid dependence. According to the US Energy Information Administration (EIA), as of February 2023, there are pending licenses for over 48 GW of new pumped storage hydroelectric (PSH) capacity in the US, which could take years to materialize. Central inverters offer lower operations and maintenance (O&M) costs and capital expenditure compared to other inverters, making them the preferred choice for utility-scale projects. The utility segment's growth is fueled by the shift towards renewable energy sources, declining solar component costs, and favorable solar policies and incentives. Solar PV technology's affordability and investor and public utility interest further boost the market's growth during the forecast period.

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Research Analysis

Solar inverters are essential components of Solar Photovoltaic Systems that convert DC power generated by solar panels into AC power for use in industrial, commercial, and residential applications. Central inverters, also known as utility-scale inverters or string inverters, are used in large-scale solar power plants, converting DC power from multiple solar panels into AC power for grid connection. On-grid solar inverters, such as central inverters, work in synchronization with the utility grid and are available as string inverters or micro inverters. Off-grid solar inverters, on the other hand, convert DC power into AC power for use in standalone systems, powering home appliances and utilities applications without grid connection. Central inverters have maximum power point tracking capabilities, ensuring optimal energy conversion and minimizing heat loss. They come in various input voltage ranges and can be monolithic or use low-frequency transformers. BOS components, including central inverters, are crucial for the successful implementation of solar power projects. PV inverters, including central inverters, are an integral part of the solar value chain, converting DC power from solar panels into usable AC power for various applications.

Market Research Overview

The Solar Inverter market is a significant segment of the renewable energy sector, focusing on converting the DC electricity generated by solar panels into AC electricity for industrial, commercial, and residential use. Central inverters, including string inverters and micro inverters, are crucial components of this market. Central inverters process electricity from multiple solar panels, making them suitable for large buildings and solar power plants. On-grid and off-grid solar inverters cater to various applications. On-grid inverters connect solar systems to the utility grid, while off-grid inverters provide power backup and are essential for rural electrification and infrastructural development projects. The PV inverter market is expanding due to growing environmental concerns, tax benefits, home loans, and home renovation projects. Solar inverters are essential for power generation in hot prone regions, where electricity demand is high, and power supply is unreliable. They are also crucial for powering home appliances and utilities applications in residential areas. Large-sized solar inverters offer panel level monitoring, reducing heat loss and ensuring reliable power supply. The market is witnessing expansion activities, new product innovations, and government support. Utility-scale solar parks and power plants, solar structures, and construction projects are significant consumers of solar inverters. The market is expected to grow further due to the increasing demand for economic-friendly and continuous power supply, especially in the utilities segment. Single-phase and three-phase central inverters cater to residential and commercial users, respectively. String Inverters and Micro Inverters are popular choices for utility-scale solar photovoltaic systems. The market is also witnessing the emergence of monolithic and modular inverters, multi-MPPT trackers, and master-slave control approaches to improve efficiency and reduce failure rates. Low-frequency transformers and BOS components are integral to the solar inverter market. The market is subject to electric grid standards and energy storage systems, ensuring maximum power point tracking and grid connection. The market's growth is driven by the need for reliable power supply, continuous power supply, and the transition towards renewable energy sources to reduce carbon emissions and greenhouse gas emissions.

Table of Contents:

1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation

• Application
• Utility
• Non-utility
• Geography
• APAC
• Europe
• North America
• South America
• Middle East And Africa

7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix

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SOURCE Technavio