China’s inverter has risen strongly in the international market

As one of the core components of the photovoltaic system, the photovoltaic inverter not only has the DC/AC conversion function, but also has the function of maximizing the performance of the solar cell and the system fault protection function, which directly affects the power generation efficiency of the solar photovoltaic system.

In 2003, Sungrow Power, led by Cao Renxian, the head of the college, launched China’s first 10kW grid-connected photovoltaic inverter with independent intellectual property rights. But until 2009, there were very few inverter enterprises in production in China, and a large number of equipment depended on imports. A large number of overseas brands such as Emerson, SMA, Siemens, Schneider and ABB were highly respected.

In the past decade, China’s inverter industry has achieved a rise. In 2010, the top 10 photovoltaic inverters in the world were dominated by European and American brands. However, by 2021, according to the ranking data of inverter market share, Chinese inverter enterprises have ranked among the top in the world.

In June 2022, IHS Markit, a global authoritative research institution, published the 2021 global PV inverter market ranking list. In this list, the ranking of Chinese PV inverter enterprises has undergone more changes.

Since 2015, Sungrow Power and Huawei have been the top two in the global PV inverter shipments. Together, they account for more than 40% of the global inverter market. The German enterprise SMA, which has been regarded as a benchmark for China’s PV inverter enterprises in history, further declined in the ranking of the global inverter market in 2021, from third to fifth. And Jinlang Technology, the seventh Chinese photovoltaic inverter company in 2020, surpassed the old inverter company and was promoted to the top three “rising star” in the world.

China’s photovoltaic inverter enterprises have finally become the top three in the world, forming a new generation of “tripod” pattern. In addition, inverter manufacturers represented by Jinlang, Guriwat and Goodway have accelerated their speed of going to sea and are widely used in Europe, the United States, Latin America and other markets; Overseas manufacturers such as SMA, PE and SolerEdge still adhere to regional markets such as Europe, the United States and Brazil, but the market share has declined significantly.

Rapid rise

Before 2012, due to the outbreak of the photovoltaic market in Europe and the United States and other countries and the continuous increase of the installed capacity, the photovoltaic inverter market has been dominated by European enterprises. At that time, the German inverter enterprise SMA accounted for 22% of the global inverter market share. During this period, China’s early established photovoltaic enterprises took advantage of the trend and began to emerge on the international stage. After 2011, the photovoltaic market in Europe began to shift, and the markets in Australia and North America broke out. Domestic inverter enterprises also followed up quickly. It is reported that in 2012, Chinese inverter enterprises accounted for more than 50% of the market share in Australia with the advantage of high cost performance.

Since 2013, the Chinese government has issued a benchmark electricity price policy, and domestic projects have been launched in succession. China’s photovoltaic market has entered the fast lane of development, and gradually replaced Europe as the largest market for photovoltaic installation in the world. In this context, the supply of centralized inverters is in short supply, and the market share was once close to 90%. At the moment, Huawei has decided to enter the market with a series inverter, which can be regarded as a “double inversion” of the Red Sea market and mainstream products.

Huawei’s entry into the field of photovoltaic inverters, on the one hand, is focused on the broad development prospects of the photovoltaic industry. At the same time, the inverter manufacturing has similarities with Huawei’s “old bank” communication equipment business and power management business. It can quickly copy the advantages of migration technology and supply chain, import existing suppliers, greatly reduce the cost of inverter research and development and procurement, and quickly form advantages.

In 2015, Huawei ranked first in the global PV inverter market, and Sungrow Power also surpassed SMA for the first time. So far, China’s photovoltaic inverter has finally won the world’s top two positions and completed a “inverter” play.

From 2015 to 2018, domestic PV inverter manufacturers continued to rise, and rapidly occupied the market with price advantages. The market share of overseas old-brand inverter manufacturers continued to be impacted. In the field of small power, SolarEdge, Enphase and other high-end inverter manufacturers can still occupy a certain market share by virtue of their brand and channel advantages, while in the market of large photovoltaic power stations with fierce price competition, the market share of old European and Japanese inverter manufacturers such as SMA, ABB, Schneider, TMEIC, Omron and so on is declining.

After 2018, some overseas inverter manufacturers began to withdraw from the PV inverter business. For large electrical giants, photovoltaic inverters account for a relatively small proportion in their business. ABB, Schneider and other inverter manufacturers have also successively withdrawn from the inverter business.

Chinese inverter manufacturers began to speed up the layout of overseas markets. On July 27, 2018, Sungrow Power put into use an inverter manufacturing base with a capacity of up to 3GW in India. Then, on August 27, it set up a local comprehensive service center in the United States to strengthen overseas standby inventory and after-sales service capabilities. At the same time, Huawei, Shangneng, Guriwat, Jinlang, Goodway and other manufacturers have further stepped up to consolidate and expand their overseas layout. At the same time, brands such as Sanjing Electric, Shouhang New Energy and Mosuo Power began to seek new opportunities overseas.

In view of the overseas market pattern, the brand enterprises and customers in the current market have basically reached a certain balance in supply and demand, and the international market pattern has also basically solidified. However, some emerging markets are still in the direction of active development and can seek certain breakthroughs. The continuous development of overseas emerging markets will bring new impetus to Chinese inverter enterprises.

Since 2016, Chinese inverter manufacturers have occupied the leading position in the world photovoltaic inverter market. The dual factors of technological innovation and large-scale application have driven the rapid decline in the cost of all links of the PV industry chain, and the cost of the PV system has dropped by more than 90% in 10 years. As the core equipment of PV system, the cost of PV inverter per watt has gradually decreased in the past 10 years, from more than 1 yuan/W in the early stage to about 0.1~0.2 yuan/W in 2021, and to about 1/10 of that 10 years ago.

Accelerate segmentation

In the early stage of photovoltaic development, inverter manufacturers focused on equipment cost reduction, maximum power tracking optimization, and more efficient energy conversion. With the continuous development of technology and the upgrading of system application, the inverter has integrated more functions, such as component PID protection and repair, integration with tracking support, cleaning system and other peripheral equipment, to improve the performance of the entire photovoltaic power station and ensure the maximization of power generation income.

In the past decade, the application scenarios of inverters have been increasing, and they need to face various complex geographical environments and extreme weather, such as desert high temperature, offshore high humidity and high salt fog. On the one hand, the inverter needs to meet its own heat dissipation needs, on the other hand, it needs to improve its protection level to cope with the harsh environment, which undoubtedly puts forward higher requirements for the inverter structure design and material technology.

Under the background of high requirements for power generation quality and efficiency from developers, the photovoltaic inverter industry is developing towards higher reliability, conversion efficiency and low cost.

The fierce market competition has brought about continuous technological upgrading. In 2010 or so, the main circuit topology of PV inverter was two-level circuit, with conversion efficiency of about 97%. Today, the maximum efficiency of inverters of mainstream manufacturers in the world has generally exceeded 99%, and the next target is 99.5%. In the second half of 2020, photovoltaic modules have launched high-power modules based on 182mm and 210mm silicon chip sizes. In less than half a year, a number of enterprises such as Huawei, Sungrow Power, TBEA, Kehua Digital Energy, Hewang, Guriwat, and Jinlang Technology have followed up quickly and successively launched high-power series inverters that match them.

According to the data of China Photovoltaic Industry Association, at present, the domestic PV inverter market is still dominated by string inverter and centralized inverter, while other micro and distributed inverters account for a relatively small proportion. With the rapid growth of the distributed photovoltaic market and the increase of the proportion of string inverters in centralized photovoltaic power stations, the overall proportion of string inverters has increased year by year, exceeding 60% in 2020, while the proportion of centralized inverters is less than 30%. In the future, with the extensive application of series inverters in large ground power stations, their market share will further increase.

From the perspective of the inverter market structure, the layout of various manufacturers shows that solar power supply and SMA products are complete, and there are both centralized inverter and series inverter businesses. Power Electronics and Shangneng Electric mainly use centralized inverters. Huawei, SolarEdge, Jinlang Technology and Goodway are all based on string inverters, of which Huawei products are mainly large string inverters for large ground power stations and industrial and commercial photovoltaic systems, while the latter three are mainly for the household market. Emphase, Hemai and Yuneng Technology mainly use micro inverters.

In the global market, series and centralized inverters are the main types. In China, the market share of centralized inverter and series inverter is stable at more than 90%.

In the future, the development of inverters will be diversified. On the one hand, the application types of photovoltaic power stations are diversified, and various applications such as desert, sea, distributed roof, and BIPV are increasing, with different requirements for inverters. On the other hand, the rapid development of power electronics, components and other new technologies, as well as the integration with AI, big data, Internet and other technologies, also drive the continuous progress of the inverter industry. The inverter is developing towards higher efficiency, higher power level, higher DC voltage, more intelligent, safer, stronger environmental adaptability, and more friendly operation and maintenance.

In addition, with the large-scale application of renewable energy in the world, the PV penetration rate is increasing, and the inverter needs to have stronger grid support capacity to meet the requirements of stable operation and rapid dispatching response of weak current grid. Optical storage integration, optical storage and charging integration, photovoltaic hydrogen production and other innovative and integrated applications will also gradually become an important way, and the inverter will usher in greater development space.