According to a new analysis from IMS Research, inverter manufacturer Advanced Energy's acquisition of Germany-based REFUsol, which was announced this week, represents a strategic move for Advanced Energy to gain presence in core European markets.
The acquisition is also expected to further develop Advanced Energy's product offerings, as well as mitigate against the risk of small three-phase inverters eroding the company's position in commercial installations.
Advanced Energy has made huge progress in recent years, becoming one of the dominant suppliers in the rapidly growing North American market following its 2010 acquisition of PV Powered.
Having only entered the PV inverter business in late 2007, it has rapidly expanded its position to become the world's fourth largest supplier in 2012, even though its business has been largely limited to North America, IMS Research says. In contrast, REFUsol's business has been largely focused on Europe, where it has consistently held a top ten position in recent years.
In 2012, IHS (IMS Research's parent company) estimates that REFUsol was the sixth largest inverter supplier to the European market. The combination of the two companies' 2012 businesses would make them the third largest PV inverter supplier in the world with strong positions in Europe and the Americas.
However, despite ongoing consolidation in the PV inverter market, the supplier base remains relatively fragmented, and the combined global market share of the two companies, based on 2012 revenues, will be just over 5%.
Both Advanced Energy and REFUsol have been strongly focused on the commercial sectors of the PV markets in the their respective regions. The commercial market has historically been a very important segment in Europe and is forecast to account for an increasing share of the Americas market in the coming years, according to IMS.
While REFUsol was quick to develop three-phase string inverters – which revolutionized inverter architectures in commercial PV systems and took massive share away from central inverters – Advanced Energy has been slow to pick up on this trend, the research firm adds.
Prior to its REFUsol acquisition, Advanced Energy did not have any three-phase string inverters, even as these products made strong advances in the North American market, as they had done in Europe in the past two years. IHS predicts that annual global shipments of three-phase string inverters will double in the next four years.
Although the combination of the two companies certainly places Advanced Energy in a strong competitive position in Europe and Americas with a portfolio of products well-suited for growth, neither of the suppliers have yet made a significant impact in the Asian market.
Driven by dramatic growth in China and Japan – both notoriously difficult markets for international suppliers to penetrate – Asia is forecast to be the fastest growing region for PV in the next five years and will account for almost 40% of global demand for PV inverters in 2013.
IMS Research predicts that Advanced Energy will undoubtedly see upside from European markets as a result of this acquisition and an expanded product line in North America, but it remains to be seen how this acquisition will help it make advances in emerging markets.