- Language: English
- 310 Pages
- Published: October 2012
- Region: Global
Global Inverter Market for Renewable Energy Systems
- Published: July 2012
- Region: Global, Africa, Asia, Europe, Latin America, Middle East, North America, Canada, Mexico, United States
- 169 Pages
- Frost & Sullivan
This research service analyzes the market for inverters employed in renewable energy systems by examining solar, wind, and fuel cell technology. Inverters are part of the balance of system in renewable energy set ups. Therefore, demand is driven by overall installations of renewable energy systems. This service analyzes manufacturer market shares, estimating the market's growth potential. To assess this market, the analysis includes market challenges, drivers, and restraints while considering technological and pricing trends. Regional breakdowns are also provided. The base year is 2010; forecasts continue through 2017
This study focuses on inverters employed in renewable energy systems, such as solar, wind, and fuel cell systems. An inverter is an electrical device that converts direct current (DC) from photovoltaic (PV) cells and panels, wind turbines, and fuel cells to alternating current (AC) for domestic, commercial, industrial, or utility applications.
Because inverters are a part of the balance of system (BOS) in the renewable energy setup, the installation of renewable energy systems drives inverter demand. Renewable energy systems tend to offer a 20 to 25 year lifecycle, whereas an inverter's lifecycle ranges from 10 to 25 years. Therefore, replacing broken inverters also constitutes a smaller part of inverter demand.
The renewable inverter market has been growing at a tremendous pace during the past few years. Having slowed in 2009, the market recovered well in the first half of 2010. In fact, there was a shortage of inverters during this time because of both a surge in demand, heightened by double orders, and a delay in the delivery of components.
Over production, which occurred because of numbers anticipated from the double orders, characterized the second half of 2010.
One of the most important factors that currently boosts demand for renewable energy systems and, hence, inverters, is an increasing acknowledgement of carbon dioxide (CO2) emissions. Governments across the world are becoming more aware of the need to reduce their carbon footprints, and, as a result, are passing incentive programs to aid in this reduction. As the price of renewable energy system installationsdeclines, the total cost of generation per kilowatt (kW) of such arrays is also declining. However, the cost of producing a kW through renewable energy is still higher than when utilities produce it. In conjunction with the general cost of production, the high initial investment required for deployment of renewable energy technologies tends to limit demand for inverters. Therefore, the market for inverters is extremely dependent on government incentives, which offset cost limitations. The main market challenge in the mid term will be reducing dependence on government stimuli.
Market Engineering Methodology
Frost & Sullivan's market research methodology provides essential research to our clients that will help them capitalize on market opportunities and gain a competitive advantage in the marketplace. Our team of analysts uses primary research as the main tool and combines it with secondary resources to create
“bottom-up” market sizes and forecasts. Through this approach, each final measurement represents the product of all those figures from a micro to macro level.
For the purpose of this study, Frost & Sullivan conducted telephone interviews with prime movers, manufacturers, wholesalers, and service companies. The interviews targeted chief executive officers, chief technical officers, business directors, marketing directors, and strategy leaders from various companies and institutions across the tiers of the market for prime movers.
Frost & Sullivan conducted an extensive review of all existing information. Some of the sources used are:
Through primary interviews, Frost & Sullivan identified factors—market drivers and market restraints—that are expected to drive and inhibit the market in terms of revenue and analyzed them for the short term (one to two years), medium term (three to four years), and long term (five to six years). Forecasts are estimated by assigning weights to the drivers and restraints according to the time frame. This analysis directly affects market forecasts, development of market strategies, and investment timing by industry participants. Finally, the forecasts are matched to the leading economic indicators and drivers for the industry.
The global renewable inverter market is segmented into five global regions:
North America, which includes the United States and Canada; Latin America, which includes Mexico and South America; Europe; Asia-Pacific (APAC), which includes China, India, Japan, South Korea, and Australia; and Rest of World (ROW), which consists of Africa and the Middle East.
-This research service analyzes the global market for inverters employed in solar, wind, and fuel cell systems.
-The base year for this study is 2010, and the forecast period is 2011 to 2017.
-In this research service, revenue forecasts are based on the sales of inverters for use in the residential, commercial, industrial, and utility applications for solar and wind generation. In the case of fuel cell systems, inverter sales include only those destined for stationary applications.
-Price is defined as the price per kW of capacity of the inverter.
Changes in Incentive Programs Hinder Investor Confidence
Unexpected changes in incentive programs will impact the confidence of customers. It is likely that an unstable, unexpectedly changing program will lead to inefficient projections and an inefficient allocation of resources.
Higher Unit Cost, Longer Return Period, and High Upfront Cost of Producing Renewable Energy Compared to Other Conventional Energy Sources
The initial cost for a renewable energy installation is high, resulting in a high cost per kW produced by the array. Also, the return on investment takes a long period of time. The high cost of producing renewable energy compared to producing conventional energy sources is a major restraint to inverter demand.
Government Incentives and Tax Benefits
Currently, government incentives are the main drivers behind the demand for renewable energy installations, particularly for those that are grid connected. These incentives may involve financingor subsidizing part of the upfront cost of the system or rewarding those who feed their energy into the grid bymaking utilities buy the generated energy at a preferential price.
Increasing Awareness About Clean Energy and Reducing CO2 Emissions
As the population becomes more environmentally conscious, demand for wind, solar, and fuel cell systems will likely rise, increasing demand for renewable inverters.
Market Drivers and Restraints
Total Inverter Market for Renewable Energy Systems: Top Market Drivers and Restraints, Global, 2011-2017
Top Drivers and Restraints
Following a steep surge in solar inverter revenue in 2010, which was due to a shortage of electronic components and a demand surge in Germany, the solar inverter market should grow steadily.
Sustained by government incentives, the wind inverter market continued to grow amid the 2009 crisis and was boosted in 2010 by the impending cut in European feed-in-tariffs.
From 2007 to 2009, government incentives, mainly in Europe, provided a steady framework for the solar inverter market to develop and even helped mitigate the effects of the worldwide
This market should continue growing at a lower rate than the 2010 peak. From 2010 to 2017, the compound annual growth rate, which should slow down as the wind market enters a mature stage. This market should register high growth rates in developing regions, primarily in isolated areas with limited access to the power grid.
Fuel cells are a promising technology capable of providing stationary applications with green solutions that do not depend on weather factors like wind and solar power do. However, the market is at an introductory stage, and it is small relative to solar and wind power. This small base of comparison partly explains the high growth rate expected for the fuel cell inverter market.
Restrictions, such as the need for investment in research and development, the need to develop a hydrogen fuel supply, and the fact that this technology is relatively new and of unproven reliability, are likely to limit the market in the short term. SHOW LESS READ MORE >
Global Inverter Market for Renewable Energy Systems
Global Inverter Market for Solar Energy Systems
Global Inverter Market for Wind Energy Systems
Global Inverter Market for Fuel Cell Energy Systems
Conclusions and Recommendations
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