Inverter Market Size, Share & Trends

[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 renewable sources like solar and wind energy have increased which further drive the demand for inverters. Apart from that, increased infiltration of electric vehicles, technological innovation in inverters, and energy efficiency policies are likely to drive the demand for inverter applications from residential and commercial and industrial segments. The technologies of inverter are crucially important as it controls the flow of energy from the battery to grid or vice-versa. In addition, growing battery storage systems also increase the demand for an inverter.

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Inverter Market Dynamics

Driver: Increasing investments in renewable energy sector

The developed and emerging economies, like the US, Japan, India, and China, continuously revise their respective energy policies to ensure that a considerable portion of their energy generation comes from renewable energy sources such as wind and solar. These are government bodies that financially support clean energy and, therefore, associated returns are assured, which has resulted in increasing investments in the global renewable energy sector. In this regard, it is alleged that renewable energy sources have gained exceptional momentum in the last couple of decades as the preferred option to expand, upgrade, and modernize power systems throughout the world. According to the estimate of the International Energy Agency 2022, investment in energy has reached approximately USD 2.8 trillion in 2023. Over USD 1.7 trillion is invested in clean energy, which includes renewable energy, nuclear power, grids, storage, low-emission fuels, efficiency improvements, and end-use renewables and electrification. The remainder, over USD 1 trillion is dedicated to unrestrained fossil fuel supply and power, of which coal accounts for about 15%, and oil and gas for the rest. For every dollar spent on fossil fuel today, 1.7 dollars are spent on clean energy. This was 1:1 five years ago. This huge shift toward clean energy investments, as highlighted from the information provided, is likely to be very favorable for the global inverter market. Inverter manufacturers see an opportunity in growing demand from renewable energy, grid modernization, and energy storage, while focusing on industrial strategy. Policy momentum and economics also champion clean energy and thus the technologies that enable it, like inverters, as increasing hefts of good investment.

According to the International Energy Agency, investments in the energy sector in the year 2023 will be at approximately USD 2.8 trillion, reaching the high rate of USD 2.4 trillion, in excess of USD 1.7 trillion going into renewable power, nuclear, grids, storage, low-emission fuels, efficiency improvement, and end-use renewables and electrification. Within the power sector, investments have seen most recent growth, especially in renewables and grids. Until recently, clean energy investment had been slow to accelerate; it surpassed USD 1.4 trillion in 2022, making up nearly three-quarters of overall energy investment growth. At the country level, China was the leader in investment in clean energy in 2022, with USD 184 billion invested, followed by the European Union at USD 154 billion and the US with USD 97 billion.

Currently, solar and wind are two major renewable sources of energy that have to solve the mismatch between demand and supply. Solar energy, being highly vulnerable to external factors, has its associated problems of inadequate supply of energy removed once solar inverter market are in operation. These allow end users to generate maximum electricity and release it to the grids when required. Inverters overcome the issues of mismatch between supply and demand and intermittent problems associated with renewable energy resources. They exhibit a long life in operation, offer optimal power generation, and provide scalability, flexibility, and safety of power devices. Solar inverters, therefore, have wide applications in renewable solar PV energy applications.

Restraints: Hazards associated with elevated DC voltages

In traditional Photovoltaic systems, PV Inverter Market, wires, and associated equipment are all powered up with high DC voltages. Such a high voltage class presents a risk to installers, maintenance personnel, and even firefighters. Because solar inverters and their associated PV arrays include high DC voltages, isolation of electric DC devices from the arrays is more difficult with DC isolation switches. High voltage results as PV modules are series connected, which is dangerous even for installers who would install the system. High DC voltages are an important factor to the functionality of inverters; however, huge safety hazards arise with the same and therefore act as one of the major growth restraining factors for the market. These involve personnel risks in the form of electric shock and arc flash, equipment damage by way of voltage surges and insulation breakdown, to even regulatory hurdles in terms of strict safety compliances. Consequentially, the cost of inverter development increases, installation and maintenance become costlier, access to markets becomes restricted, and public concerns about the technology dampen consumer adoptions. However, the uninterruptedly pursued work relating to technological development, updating of regulations, and improving safety training stands to provide promising solutions that minimize risks and open ways towards a safer and more robust inverter market share.

During a short-circuit current situation, there is a possibility of electric arcs, which may therefore result in fires and hence endangering people around a Photovoltaic system. These DC arcs are rather difficult to extinguish and pose a danger for the firefighters. The fire that results from this can destroy DC cables in PV arrays, making inverters shut down automatically with the manual isolation of DC cables and other parts. Thus, such factors could restrict the growth of the 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.

Developments in automotive technology also mean that the electronic systems in vehicles are increasingly in demand owing to the latest trends of connected, autonomous, and electric vehicles. The global electric vehicle market has seen tremendous growth on account of rising environmental regulations. Growth in this market has directly influenced related markets. The usage preference by consumers regarding electric vehicles will drive up the demand for vehicle inverters. Ambitious targets for electric vehicles mandated by various governments, supported by favorable policies, result in cost reductions, increasing vehicle ranges, and the development of better charging infrastructures-thus increasing demand for electric vehicles across the world. All these trends are foreseen to present good opportunities for the vehicle inverter providers in the near 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 urge to become green power generators rather than depending on grid electricity has increased the demand for Solar PV inverter market systems globally. Since the inverter market prices of solar modules continue to fall, the main cost of installation rests on the inverter. This puts a downward pressure on inverter manufacturers since they are being pushed to advance the prices of their products. This, in turn, has placed pressure on inverter companies to reduce their prices due to the overall declining prices of solar systems in residential, commercial, and utility sectors. In this sense, solar module manufacturers have a higher pressure to reduce the prices of their products compared with solar inverter market share manufacturers. This trend is difficult to which the solar inverter manufacturers can get adapted and cut prices accordingly. These reductions are largely due to the emergences of low-cost equipment, and the squeezing of profit margins-the signs that mark an imminent fall in the prices of inverters within a short time into the 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

The solar inverter segment is the largest market in the inverter business, owing to the increasing usage of solar energy all over the world. Through 2023, the US has installed more than 200 GW of solar capacity to power more than 36 million homes, according to the Solar Energy Industries Association. Solar inverters will continue to play an important role in residential and commercial installations for converting DC, which is photovoltaically generated, into usable AC. The main driving factors for the growth of this market include government subsidies, falling prices of solar panels, and a growing consciousness towards the environment. With the global increase in momentum toward clean energy solutions, the market for solar inverters remains instrumental in supplying the growing demand for efficient integration of solar power.

Automotive, by end user, to hold the second-largest market share during the forecast period

In inverter market, the automotive segment is gaining momentum, much faster, especially when the globe is taking a tremendous shift toward electric vehicles. Inverters form one of the crucial components in electric vehicles to convert DC power from the battery into AC for the electric motor. Pushed by this very fact, higher-power and more efficient inverters will see a surge in demand in the near future, with the automotive world fast accelerating its electric mobility. For instance, according to IEA in 2024, electric car sales in the United States are projected to rise by 20% compared to the previous year, translating to almost half a million more sales, relative to 2023. Such sales figures is expected to also augment the inverter market.

North America is expected to account for the second-largest market during the forecast period.

North American consumers and businesses are driving the inverter market into rapid growth due to sustainability concerns. The technological innovations and regulatory support act as pivotal points in this dynamic evolution and the regionally expanding landscape for clean energy solutions. These key factors make North America the second-fastest-growing market for inverters. The region is also going green, driven by the renewable projects in especially solar and wind energy initiated by the government through very attractive policies and tax incentives. Hence, the United States is the major country in terms of adopting clean energy solutions that comprise inverters at solar installations. Other demands come from increased utilization of smart grid technologies and electrification in industries. Growth in the adoption of EVs increases the demand for inverters in charging infrastructure. This propels the demand for an inverter during charging in infrastructure in growth.

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.

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Scope of the Report

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 reached an agreement with Sonnedix, an international manufacturer of renewable energies, providing inverter solutions to 750 MWp PV projects. According to this agreement, SUNGROW will supply string inverters, central inverters, and medium-voltage stations to SONNEDIX. SUNGROW will further support expansion by Sonnedix in Europe with professional services such as personnel training.
• In May 2023, Fimer Group built a new plant near Modena. It installed a new 860.52 kWp photovoltaic plant equipped with FIMER inverters. The plant will produce about 1,100 MWh/year of renewable energy, saving 210 TOE/year in fossil fuel consumption.

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