IMS Research says that 2013 will be another challenging year for photovoltaic inverter manufacturers, with flat revenue growth globally and a major shift away from traditional markets leading to a reshaping of the supplier base according to the company's latest report.
The top 10 inverter manufacturers are likely to suffer because of falling inverter prices and because new markets such as Japan, China, India and the U.S. will prove difficult to penetrate and may not compensate for decreases in their core markets, Germany and Italy.
Recent announcements of profit warnings and Chapter 11 filings by leading suppliers SMA and Satcon, respectively, highlight the challenging conditions being experienced by all PV inverter manufacturers at present – and this may not improve until 2014, IMS Research says.
According to the recently released quarterly update to World Market for PV Inverters report, IMS Research forecasts double-digit growth of PV installations, with 35 GW of installations predicted in 2013. However, inverter revenues will remain flat, as prices are forecast to decline in a highly competitive market as manufacturers attempt to break into new geographic markets and gain market share.
A major geographic shift in demand – coupled with continued, intense price pressure – will present a major challenge for the leading PV inverter suppliers in 2013. Although the U.S. and some key Asian countries will more than make up for the shortfall left by the decreasing markets of Italy and Germany, these markets may not be easily accessible to many of the leading inverter suppliers, and penetrating the markets will be challenging.
Some of the key challenges that inverter manufacturers will continue to face in 2013 will be certification standards, lower cost basis and local manufacturing requirements, as well as intense competition from local suppliers. Because some of the Asian countries have a much lower price point, one of the biggest hurdles for inverter manufacturers in 2013 is that they will not be able to subsidize their Asia operations by their profitable European business, according to IMS Research.
As feed-in tariff cuts have occurred in mature PV inverter markets such as Germany and Italy, manufacturers are increasingly looking to the growth markets of the U.S. and Asia.
‘Manufacturers that can successfully penetrate these growing PV markets and will stand to reap the benefits in the future as the market develops, but this won't be easy,’ says Cormac Gilligan, PV market analyst at IMS Research. ‘Longer-term horizons and sound strategic decisions will be needed in the future years as PV inverter market becomes more fragmented due to the diverse geographical spread as more PV markets develop, including South Africa and South America.’
For those manufacturers that withstand the challenges of 2013 and successfully penetrate these emerging markets, the future years are forecast to return to double-digit growth as the PV market reaches greater maturity.
However, the key inverter markets will no longer be centered in Europe, but spread over a greater number of continents. IMS Research forecasts that Europe accounted 54% of global shipments in 2012, but this number will fall significantly to 40% by 2014. As a result, the top 10 manufacturers in 2014 are expected to be quite different from those seen today, with many more Chinese and Japanese companies.
