Inverter Market by Type (Solar Inverters, Vehicle Inverter), Output Power Rating (Upto 10 kW, 10-50 kW, 51-100 kW, above 100 kW), End User (PV Plants, Residential, Automotive), Connection, Voltage, Sales Channel & Region - Global Forecast to 2028
[293 Pages Report] The Inverter market is expected to grow from an estimated USD 39.6 billion by 2028 from an estimated USD 18.9 billion in 2023, at a CAGR of 16.0% during the forecast period. The demand for inverters is growing due to the increasing adoption of renewable energy sources, such as solar and wind power. Additionally, the surge in electric vehicle adoption, advancements in inverter technology, and the emphasis on energy efficiency contribute to the expanding demand for inverters in various applications across residential, commercial, and industrial sectors.
To know about the assumptions considered for the study, Request for Free Sample Report
To know about the assumptions considered for the study, download the pdf brochure
Inverter Market Dynamics
Driver: Increasing investments in renewable energy sector
Developed and emerging economies such as the US, Japan, India, and China have been revising their energy policies to ensure that a considerable portion of their energy generation is from renewable energy sources, including wind and solar. Financial support by government bodies to promote clean energy and associated returns has led to increasing investments in the global renewable energy sector. Currently, renewable sources have become a preferred choice for expanding, upgrading, and modernizing power systems worldwide. According to International Energy Agency 2022 estimates, around USD 2.8 trillion will be invested in energy in 2023. More than USD 1.7 trillion is being invested in clean energy, which includes renewable energy, nuclear power, grids, storage, low-emission fuels, efficiency improvements, and end-use renewables and electrification. The remaining, little more than USD 1 trillion, is going to unrestricted fossil fuel supply and power, with coal accounting for about 15% and oil and gas accounting for the rest. For every dollar spent on fossil fuels, 1.7 dollars are currently spent on clean energy. This ratio was 1:1 five years ago. This significant shift towards clean energy investments outlined in the provided information has a positive impact on the inverter market. The growing demand for renewable energy, grid modernization, energy storage, and the focus on industrial strategy all create opportunities for inverter manufacturers. This is further supported by favorable policies and improved economics, making clean energy and the technologies that enable it, like inverters, increasingly attractive investments.
According to the International Energy Agency, in 2022, investments in the energy sector are expected to be USD 2.8 trillion in 2023, reaching USD 2.4 trillion, which is more than USD 1.7 trillion going for renewable power, nuclear, grids, storage, low-emission fuels, efficiency improvements, and end-use renewables and electrification. The power sector has witnessed the most recent investment growth, primarily in renewables and grids. Clean energy investment is finally picking up; it exceeded USD 1.4 trillion by 2022, accounting for nearly three-quarters of overall energy investment growth. In the five years following the signing of the Paris Agreement in 2015, the yearly average growth rate in clean energy investment was just over 2%. Since 2020, the rate has climbed to 12%, well short of what is required to meet international climate objectives. China invested the most in clean energy in 2021 (USD 380 billion), followed by the European Union (USD 260 billion) and the US (USD 215 billion).
Presently, the power supplied by renewable energy sources such as solar and wind deals with supply and demand mismatch issues. Solar energy is highly dependent on external conditions; however, with the use of solar inverters, the problems of insufficient energy supply can be eliminated, thereby enabling end users to generate maximum electricity and release it to grids when required. Inverters solve the issues related to supply and demand mismatch and intermittent problems associated with renewable energy resources. They have a long operational life, enable optimum power generation, and ensure power devices’ scalability, flexibility, and safety. Thus, solar inverters are widely used in renewable solar PV energy applications.
Restraints: Hazards associated with elevated DC voltages
In conventional Photovoltaic (PV) systems, high DC voltages energize PV panels, wires, and related equipment. This elevated DC voltage presents potential hazards for installers, maintenance workers, and firefighters. The involvement of high DC voltages in solar inverters with PV arrays complicates the isolation of DC electric devices from the arrays using DC isolation switches. The connection of PV modules in series results in a high voltage, posing a danger to installers during the installation of the system. While high DC voltages are crucial for inverter functionality, they also present significant safety risks, acting as a major restraint on market growth. These risks encompass potential harm to personnel through electric shock and arc flash, damage to equipment due to voltage surges and insulation breakdown, and even regulatory hurdles due to strict safety compliance requirements. As a consequence, inverter development costs increase, installation and maintenance become more expensive, market access becomes restricted, and public concerns impede consumer adoption. However, ongoing efforts in technological advancements, regulatory updates, and safety training initiatives offer promising solutions to mitigate these risks and pave the way for a safer and more robust inverter market.
During a short-circuit current situation, there is a potential for electric arcs that may lead to fires, posing a threat to people near a Photovoltaic (PV) system. These DC arcs are challenging to extinguish, creating a hazard for firefighters. The resulting fire can harm DC cables in PV arrays, causing inverters to shut down automatically as DC cables and other components are manually isolated. Despite safety measures required by the National Electric Code (NEC) and the Electrical Safety Authority (ESA) in the US, these do not completely eliminate all risks. This limitation hinders the growth of the inverter market.
Opportunity: Growing demand for electric vehicles
In the realm of automotive applications, inverters play a crucial role, particularly in Electric Vehicle (EV) powertrains. These devices are responsible for converting the DC power sourced from a vehicle's batteries into usable AC. Vehicle inverters find application in powering the onboard electronic systems and motors of vehicles. Noteworthy manufacturers and providers of vehicle inverters include Continental (Germany), Delphi Technologies (UK), Toyota Industries (Japan), Sensata Technologies (US), Samlex Europe (Netherlands), and BESTEK (US).
As per the Global EV Outlook 2023 by International Energy Agency’s executive summary,
In 2022, electric vehicles constituted 14% of all new vehicle sales, a notable increase from approximately 9% in 2021 and less than 5% in 2020. The global landscape of electric vehicle sales was dominated by three key markets. China, once again, emerged as the leader, representing nearly 60% of the worldwide electric vehicle sales. China already boasts more than half of all electric vehicles globally, surpassing its 2025 target for new energy vehicle sales. In Europe, the second-largest market, electric car sales surged by over 15% in 2022, suggesting that more than one in every five automobiles sold was electric. The United States, the third-largest market, witnessed a 55% increase in electric car sales in 2022, achieving an 8% sales share.
Advancements in automotive technology and the rise of trends like connected, autonomous, and electric vehicles have heightened the demand for electronic systems in vehicles. The global electric vehicle market has experienced substantial growth due to increased focus on environmental regulations. This growth has, in turn, impacted related markets positively. The growing consumer preference for electric vehicles is expected to propel the demand for vehicle inverters. Government mandates and supportive policies aimed at achieving ambitious electric vehicle targets have led to cost reductions, extended vehicle ranges, and improvements in charging infrastructures, further boosting the global demand for electric vehicles. These trends are anticipated to create lucrative opportunities for vehicle inverter providers in the foreseeable future.
Challenges: Availability of low-quality and cheap products in gray market and pricing pressure on manufactures
The inverter market exhibits significant fragmentation with a multitude of both local and international players. Distinction in product quality serves as a crucial factor for market differentiation. The organized sector primarily caters to industrial buyers, upholding elevated product standards in accordance with various industrial norms. Concurrently, the unorganized sector offers more economical alternatives. Local manufacturers in many countries focus on the unorganized sector, fiercely competing with global suppliers in their respective markets. The prominent market players currently grapple with intense competition from emerging players in the unorganized market, delivering inexpensive and lower-quality products. These gray market entities outperform major players in terms of price competitiveness and local distribution networks, posing a significant challenge for those operating in the inverter market.
The global demand for Solar PV systems is on the rise, driven by the desire to generate green power and reduce reliance on grid electricity. As the costs of solar modules decrease, inverters contribute significantly to the overall installation expenses. This places downward pressure on inverter manufacturers, who are compelled to lower their product prices. The diminishing overall costs of solar systems across residential, commercial, industrial, and utility sectors necessitate price reductions from inverter companies. Solar module manufacturers experience more pronounced pressure than their inverter counterparts in terms of reducing their product prices. Manufacturers of solar inverters find it challenging to adapt to this shift and implement price reductions. These reductions are primarily attributed to the emergence of low-cost equipment and squeezed profit margins, indicative of an impending decline in inverter prices in the near future.
Inverter Market Ecosystem
Notable players in this industry comprise long-standing, financially robust manufacturers of Inverter Market and related components. These companies have a significant track record in the market, offering a wide range of products, employing cutting-edge technologies, and maintaining robust global sales and marketing networks. Prominent companies in this market include Huawei Technologies Co., Ltd. (China), SUNGROW (China), SMA Solar Technology AG (Germany), Power Electronics S.L. (Spain), and Fimer Group (Italy).
Solar Inverter, is expected to be the largest market, based on type
Due to the growing use of solar energy throughout the world, the solar inverter segment is the largest market in the inverter business. Residential and commercial installations significantly rely on solar inverters to convert photovoltaic-generated DC into useable AC, as the emphasis on sustainable practices grows. The expansion of this market is driven by government subsidies, falling solar panel costs, and environmental consciousness. The market for solar inverters is still essential to supplying the growing demand for effective solar power integration as the world moves faster and faster towards clean energy solutions.
Automotive, by end user, to hold the second-largest market share during the forecast period
The automotive segment in the inverter market is growing rapidly due to the global shift towards electric vehicles (EVs). Inverters are essential components in EVs, converting DC from the battery into AC for the electric motor. As the automotive industry accelerates electrification efforts, the demand for high-performance and efficient inverters is on the rise.
North America is expected to account for the second-largest market during the forecast period.
North America is the second fastest-growing market for inverters owing to several key factors. The region is experiencing a surge in renewable energy projects, particularly solar and wind, driven by government initiatives, tax incentives, and environmental concerns. The United States, in particular, is witnessing widespread adoption of clean energy solutions, fostering demand for inverters in solar installations. Additionally, advancements in smart grid technology and the electrification of industries contribute to increased inverter deployment. The rise in electric vehicle (EV) adoption further propels the demand for inverters in charging infrastructure. As North American consumers and businesses prioritize sustainability, the inverter market experiences rapid growth, with technological innovations and regulatory support playing pivotal roles in shaping the region's dynamic and expanding landscape for clean energy solutions.
Key Market Players
The Inverter market is dominated by a few major players that have a wide regional presence. The major players in the Inverter market are Huawei Technologies Co., Ltd. (China), SUNGROW (China), SMA Solar Technology AG (Germany), Power Electronics S.L. (Spain), and Fimer Group (Italy). Between 2019 and 2023, Strategies such as product launches, contracts, agreements, partnerships, collaborations, alliances, acquisitions, and expansions are followed by these companies to capture a larger share of the Inverter market.
Get online access to the report on the World's First Market Intelligence Cloud
- Easy to Download Historical Data & Forecast Numbers
- Company Analysis Dashboard for high growth potential opportunities
- Research Analyst Access for customization & queries
- Competitor Analysis with Interactive dashboard
- Latest News, Updates & Trend analysis
Request Sample Scope of the Report
Get online access to the report on the World's First Market Intelligence Cloud
- Easy to Download Historical Data & Forecast Numbers
- Company Analysis Dashboard for high growth potential opportunities
- Research Analyst Access for customization & queries
- Competitor Analysis with Interactive dashboard
- Latest News, Updates & Trend analysis
|
Report Metric |
Details |
|
Market size available for years |
2020–2028 |
|
Base year considered |
2023 |
|
Forecast period |
2024–2028 |
|
Forecast units |
Value (USD Billion) |
|
Segments covered |
Output Power Rating, End User, Type, Output Voltage, Connection Type, Sales Channel, and Region |
|
Geographies covered |
Asia Pacific, North America, Europe, Middle East & Africa, and South America |
|
Companies covered |
Huawei Technologies Co., Ltd. (China), SUNGROW (China), SMA Solar Technology AG (Germany), Power Electronics S.L. (Spain), Fimer Group (Italy), SolarEdge (Israel), Fronius International GmbH (Austria), Altenergy Power System Inc., (US), Enphase Energy (US), DARFON (China), Schneider Electric (France), General Electric (US) and Delta Electronics, Ltd (Taiwan). |
This research report categorizes the Inverter market by output power rating, end user, type, output voltage, connection type, sales channel, and region
On the basis of output power rating:
- Below 10 kW
- 10–50 kW
- 51–100 kW
- Above 100 kW
On the basis of end user:
- Residential
- Photovoltaic (PV) Plants
- Automotive
- Others
On the basis of by type:
- Solar inverter
- Vehicle inverter
- Others
On the basis of by output voltage:
- 100–300 V
- 301–500 V
- Above 500 V
On the basis of by connection type:
- Standalone
- Grid-tied
On the basis of by sales channel:
- Direct
- Indirect
On the basis of region:
- Asia Pacific
- Europe
- North America
- Middle East & Africa
- South America
Recent Developments
- In November 2023, Enphase Energy has started shipping IQ8P Microinverters, with a peak output AC power of 480 W, to Mexico to support newer high-powered solar modules. The company has also started the commercial production of IQ8 Microinverters in North America, Europe, and Romania.
- In October 2023, During REI 2023, SUNGROW demonstrated its entire portfolio of renewable energy solutions and introduced new goods to India. India's energy revolution is at a crossroads, and SUNGROW's unique products and solutions will help the country enhance its energy structure and boost the use of efficient, safe, and clean energy.
- In July 2023, SUNGROW signed a framework deal with Sonnedix, the international renewable energy manufacturer, to deliver inverter solutions for 750 MWp PV projects. SUNGROW will deliver string inverters, central inverters, and medium-voltage stations to SONNEDIX as part of this agreement. SUNGROW will also provide professional services such as personnel training to support Sonnedix's European expansion plans.
- In May 2023, Fimer Group established a new facility near Modena in 2023. The new 860.52 kWp photovoltaic facility is outfitted with FIMER inverters. The facility will generate approximately 1,100 MWh/year of renewable energy, saving 210 TOE/year in fossil fuel consumption.
Frequently Asked Questions (FAQ):
What is the current size of the Inverter market?
The current market size of global Inverter market is USD 18.9 billion in 2023.
What is the major drivers for Inverter market?
The global Inverter market is driven by i Increasing investments in renewable energy sector.
Which is the fastest-growing region during the forecasted period in Inverter market?
Asia Pacific is a fastest market the Asia Pacific region emerged as a notably expanding market for Inverter market.
Which is the largest segment, by type during the forecasted period in Inverter market?
Solar Inverter dominate the inverter market by type segment due to increasing global adoption of solar energy. With rising environmental awareness, government incentives, and decreasing solar panel costs, demand for solar inverters is expanding rapidly.
Which is the largest segment, by output power rating during the forecasted period in Inverter market?
Output power rating are the most important section of the Inverter market since they are the most crucial components of power networks. Below 10 kw is the largest segment due to its dominance in residential solar installations. The segment caters to the growing demand for small-scale solar power generation in homes. .
To speak to our analyst for a discussion on the above findings, click Speak to Analyst
The study involved major activities in estimating the current size of the Inverter market. Exhaustive secondary research was done to collect information on the peer and parent markets. The next step was to validate these findings, assumptions, and sizing with industry experts across the value chain through primary research. Both top-down and bottom-up approaches were employed to estimate the complete market size. Thereafter, market breakdown and data triangulation were used to estimate the market size of the segments and subsegments.
Secondary Research
This research study on the Inverter market involved the use of extensive secondary sources, directories, and databases, such as US Department of Energy, US Environmental Protection Agency (EPA), National Electrical Manufacturers Association (NEMA), Consumer Product Safety Commission (CPSC, California Energy Commission (CEC), European Committee for Electro Technical Standardization, European Union Agency for the Cooperation of Energy Regulators (ACER), Bureau of Indian standards, China National Institute of Standardization, Japanese Standards Association, and Electricity & Co-Generation Regulatory Authority (ECRA), to identify and collect information useful for a technical, market-oriented, and commercial study of the global Inverter market. The other secondary sources included annual reports, press releases & investor presentations of companies, white papers, certified publications, articles by recognized authors, manufacturer associations, trade directories, and databases.
Primary Research
The Inverter market comprises several stakeholders such as Inverter manufacturers, manufacturers of subcomponents of Inverter, manufacturing technology providers, and technology support providers in the supply chain. The increased use of renewable energy sources worldwide, especially in solar and wind power projects, is driving up demand for inverters. An essential function of inverters is to transform the direct current (DC) produced by solar panels or wind turbines into alternating current (AC) that may be used for human consumption. Inverters are becoming more and more necessary as countries work to achieve sustainable energy solutions and shift to cleaner power sources. There is also a greater need for inverters in a variety of industries due to growing electrification, the development of infrastructure for electric vehicles, and improvements in industrial processes.
To know about the assumptions considered for the study, download the pdf brochure
Market Size Estimation
Both top-down and bottom-up approaches were used to estimate and validate the total size of the Inverter market. These methods were also used extensively to estimate the size of various subsegments in the market. The research methodology used to estimate the market size includes the following:
- The key players in the industry and market have been identified through extensive secondary research, and their market share in the respective regions have been determined through both primary and secondary research.
- The industry’s value chain and market size, in terms of value, have been determined through primary and secondary research processes.
- All percentage shares, splits, and breakdowns have been determined using secondary sources and verified through primary sources.
Global Inverter Market Size: Top-down Approach
To know about the assumptions considered for the study, Request for Free Sample Report
Global Inverter Market Size: Bottom-Up Approach
Data Triangulation
After arriving at the overall market size from the estimation process explained above, the total market has been split into several segments and subsegments. To complete the overall market engineering process and arrive at the exact statistics for all the segments and subsegments, the data triangulation and market breakdown processes have been employed, wherever applicable. The data has been triangulated by studying various factors and trends from both the demand- and supply sides. Along with this, the market has been validated using both the top-down and bottom-up approaches.
Market Definition
An inverter transforms DC voltage to alternating current voltage. In most circumstances, the input DC voltage is lower, but the output AC voltage is equivalent to the grid supply voltage, which might be 120 or 240 volts depending on the country. The inverter is designed to act as a standalone piece of equipment for applications such as solar power or as a backup power supply from batteries that are charged separately.
Key Stakeholders
- Energy utilities
- Government and research organizations
- Institutional investors
- Investors/shareholders
- Process industries and power and energy associations
- Public and private operators of power plants
- Inverter manufacturers, dealers, and suppliers
Objectives of the Study
- To define, describe, segment, and forecast the Inverter market, in terms of value and output power rating, end user, type, output voltage, connection type, sales channel and region
- To forecast the market size for five key regions: North America, South America, Europe, Asia Pacific, and Middle East & Africa, along with their key countries
- To provide detailed information about the key drivers, restraints, opportunities, and challenges influencing the growth of the market
- To strategically analyze the subsegments with respect to individual growth trends, prospects, and contributions of each segment to the overall market size
- To analyze market opportunities for stakeholders and the competitive landscape of the market
- To strategically profile the key players and comprehensively analyze their market shares and core competencies
- To analyze competitive developments, such as deals and agreements in the market
Available Customizations:
With the given market data, MarketsandMarkets offers customizations as per the client’s specific needs. The following customization options are available for this report:
Geographic Analysis
- Further breakdown of region or country-specific analysis
Company Information
- Detailed analyses and profiling of additional market players (up to 5)
Generating Response ...
Growth opportunities and latent adjacency in Inverter Market