Photovoltaic Inverter Market Share, Industry Analysis [2032]

Report Description

Photovoltaic Inverter Market Outlook 2032

The global photovoltaic inverter market size was USD 14.27 Billion in 2023 and is projected to reach USD 48.8 Billion by 2032, expanding at a CAGR of 14.2% during 2024–2032. The market growth is attributed to the increasing adoption of solar energy and supportive government policies.

Rising demand for renewable energy sources across various applications is propelling the market. The photovoltaic inverter market is witnessing a rising trend toward the integration of advanced technologies such as maximum power point tracking (MPPT) and digital monitoring, enhancing the overall efficiency and performance of solar power systems.

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Growing environmental concerns and the need for sustainable energy solutions is a significant factor in fueling the market. Increasing awareness about the benefits of solar energy as well as government incentives and favorable policies are boosting the demand for photovoltaic inverters. Regulatory bodies are playing a crucial role in shaping the market through initiatives aimed at promoting the integration of solar power and grid connectivity requirements. For instance,

• In June 2021, the European Union's Renewable Energy Directive (RED II), sets binding renewable energy targets for the EU for 2030. The directive includes provisions for promoting the use of renewable energy sources, including solar power, and encourages the deployment of advanced technologies such as smart grids and energy storage to support the integration of renewable energy into the grid.

Increasing investments in research and development activities are driving innovation in photovoltaic inverters. Manufacturers are focusing on improving the durability, reliability, and performance of inverters to meet the evolving requirements of the solar industry. Additionally, the emergence of smart grid technologies and the integration of energy storage systems present new opportunities for the market.

Impact of Artificial Intelligence (AI) in the Photovoltaic Inverter Market

Artificial Intelligence (AI) is revolutionizing the photovoltaic inverter market by optimizing energy production, predictive maintenance, and fault detection. AI algorithms analyze vast amounts of data from solar installations to enhance the efficiency and performance of photovoltaic inverters. This technology has enabled real-time monitoring and control, improved energy yield, and reduced operational costs for solar power systems.

AI-driven predictive maintenance capabilities are helping in identifying potential issues in photovoltaic inverters, thereby minimizing downtime and enhancing system reliability. The integration of AI in photovoltaic inverters in the solar industry offers advanced solutions for maximizing energy output and ensuring the seamless operation of solar power plants.

• In February 2021, Schneider Electric collaborated with SolarEdge Technologies, Inc. This collaboration aimed to bring together expertise of Schneider Electric in energy management and leadership of SolarEdge in PV inverters & power optimizers to offer enhanced residential solar solutions.

Photovoltaic Inverter Market Dynamics

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Major Drivers

Increasing demand for renewable energy sources is expected to drive the market during the forecast period. Rising awareness of environmental sustainability and the need for clean energy solutions spur the adoption of photovoltaic inverters across residential, commercial, and utility-scale applications. Additionally, government incentives and favorable policies aimed at promoting solar energy deployment are boosting the demand for photovoltaic inverters.

Advancements in technology such as maximum power point tracking and digital monitoring are fueling the market. The integration of these advanced technologies is expected to enhance the overall efficiency and performance of solar power systems in the coming years, leading to the increased adoption of photovoltaic inverters. For instance,

• In February 2023, Silicon Ranch revealed plans to expand the energy generation capacity of its solar power plant. First Solar was set to provide 1.5 GW of advanced American thin-film solar modules as part of this initiative, supplementing its existing agreements, which entail the installation of a cumulative 4 GW of solar PV panels by 2027.

Existing Restraints

Regulatory uncertainty and evolving standards are likely to limit the market. The dynamic nature of regulations related to grid connectivity, quality standards, and safety requirements poses challenges for the market players, leading to uncertainties in product development and compliance.

Fluctuations in raw material prices and supply chain disruptions are expected to hamper the market during the forecast period. The dependence on critical components such as semiconductors, power electronics, and rare earth materials makes the market vulnerable to supply chain risks and price volatility.

Emerging Opportunities

High demand for energy storage solutions is projected to create lucrative opportunities in the market in the coming years. The integration of energy storage systems with photovoltaic inverters enables enhanced grid stability, load management, and increased self-consumption of solar energy. This growing inclination toward hybrid solar-plus-storage installations creates new avenues for the market players to offer integrated solutions.

Rising innovation in photovoltaic inverters is a significant factor in creating new opportunities for the market. Market players are increasingly focusing on developing next-generation inverters with improved efficiency, reliability, and smart grid compatibility. The emphasis on innovation and advanced features such as grid-forming capabilities and seamless integration are increasing the demand for this product in the market.

Scope of the Photovoltaic Inverter Market Report

The market report includes an assessment of the market trends, segments, and regional markets. Overview and dynamics are included in the report.

Regional Outlook

In terms of region, the global photovoltaic inverter market is classified as Asia Pacific, North America, Latin America, Europe, and the Middle East & Africa. North America held a large share of the photovoltaic inverter market in 2023, due to the widespread adoption of solar energy solutions, favorable government initiatives & incentives, and a growing focus on renewable energy sources to reduce carbon emissions & enhance energy security. Additionally, the presence of established industry players, technological innovation, and the solar industry are propelling the market in the region. For instance,

• In August 2022, the US government introduced the Inflation Reduction Act, allocating USD 369 Billion to bolster the renewable energy sector. Subsequently, numerous companies have commenced the construction of new solar photovoltaic (PV) plants and have initiated capacity expansions for their existing facilities.

Asia Pacific is expected to hold a major share of the market during the forecast period, owing to the rapid expansion of solar power installations, ambitious renewable energy targets, substantial investments in solar infrastructure, and the increasing demand for electricity in the region. Furthermore, government support for solar energy development, advancements in photovoltaic technology, and the implementation of large-scale solar projects are anticipated to boost the regional market. For instance,

• In September 2023, WattPower Systems Pvt. Ltd. unveiled a groundbreaking solar inverter manufacturing facility in India. This state-of-the-art factory boasts an annual production capacity of 10 GW.

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Photovoltaic Inverter Market Segment Insights

Type Segment Analysis

Based on type, the photovoltaic inverter market is segregated into string inverters, central inverters, microinverters, and power optimizers. The central inverters segment holds a major share of the market, attributed to the extensive deployment of utility-scale solar power projects. Central inverters are preferred types of inverters, due to their capability to handle high power capacities and cost-effectiveness for large-scale installations.

The power optimizers are projected to hold a dominant share of the market in the coming years, owing to the increasing emphasis on maximizing energy output and mitigating shading in photovoltaic systems. Furthermore, the growing trend toward module-level power electronics and the integration of power optimizers in residential and commercial solar installations are expected to drive the segment in the coming years.

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Power Rating Segment Analysis

On the basis of power rating, the global market is segregated into below 10 kW, 10 kW - 100 kW, and above 100 kW. The 10 kW - 100 kW segment held a large market share in 2023, attributed to the widespread deployment of commercial and small utility-scale solar installations falling within this power range. The 10 kW - 100 kW segment benefitted from its versatility, catering to a wide range of applications while offering a balance between efficiency and scalability.

The above 100 kW power rating segment is projected to hold a dominant share of the market in the forecast period, due to the increasing trend toward large-scale utility and industrial solar installations, where high power capacities are required to meet the growing energy demands. Furthermore, advancements in utility-scale solar projects, technological innovations in high-capacity inverters, and the emphasis on grid stability and energy security are expected to drive the segment. For instance,

• In 2022, the International Energy Agency (IEA) reported that the solar PV energy generated in the US reached around 1,300 terawatt-hours, marking a 26% increase from the previous year.

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Application Segment Analysis

Based on application, the photovoltaic inverter market is segmented into residential, commercial, and utility. The residential segment registered a high revenue in 2023, owing to the increasing adoption of rooftop solar installations in residential properties, driven by the growing awareness of renewable energy and the desire for energy independence among homeowners. Additionally, supportive government policies, financial incentives, and the declining cost of solar photovoltaic systems are expected to boost the segment during the forecast period.

The utility application segment is projected to hold a dominant share of the market in the coming years, due to the rapid expansion of large-scale solar power plants and utility-scale photovoltaic installations, driven by the need for clean and sustainable energy sources to meet the rising electricity demand. Furthermore, the focus on decarbonization, grid modernization, and the implementation of ambitious renewable energy targets by utility companies and governments are expected to drive the segment in the coming years.