Solar micro inverters are devices that convert direct current (DC) electricity generated by solar panels into alternating current (AC) electricity that can be used by homes and businesses or fed into the electrical grid. Major advantages of solar micro inverters include monitoring individual panel performance, eliminating panel mismatches, and limiting fire hazards. With growing concerns over climate change and rising electricity costs, the demand for solar energy systems is increasing significantly across residential and commercial sectors.
The Global Solar Micro Inverter Market Size is estimated to be valued at US$ 372.42 Bn in 2023 and is expected to exhibit a CAGR of 13% over the forecast period 2024 to 2031, as highlighted in a new report published by Coherent Market Insights.
Market Opportunity:
Increasing adoption of solar micro inverters in residential applications offers lucrative growth opportunities. Key factors driving the adoption of micro inverters in residential solar installations include improved power generation, ease of system monitoring, and simplified installation process. By transforming DC electricity from each individual solar panel, micro inverters ensure that any shaded or faulty solar panel does not impact the overall performance of the system. This translates to higher energy yields for homeowners. With most solar installers now preferring micro inverters over traditional string inverters for residential rooftop projects due to their decentralized architecture and other advantages, the demand from the residential sector is expected to surge substantially in the coming years. Leveraging this growing preference for micro inverter based systems especially in developed markets of North America and Europe provides immense opportunities for manufacturers in the market.
Porter's Analysis
Threat of new entrants: New entrants will face high barriers to entry as the micro inverter market is highly consolidated with major players dominating the market. High research and development costs also deter new companies from entering the market.
Bargaining power of buyers: Buyers have moderate bargaining power due to the availability of substitutes like AC modules and string inverters. However, solar micro inverters offer better energy harvesting and module level monitoring which attract more buyers.
Bargaining power of suppliers: Key components like IGBTs, capacitors, and transistors used in micro inverters have few suppliers globally with differentiated products resulting in more bargaining power.
Threat of new substitutes: Products like AC modules and string inverters pose potential threat, but micro inverters provide higher yield, enhanced safety, and module level monitoring giving them an edge over substitutions.
Competitive rivalry: The market is highly competitive with major global players differentiating their products on the basis of technology, reliability, and customer support.
SWOT Analysis
Strengths: Higher energy yields, enhanced safety, independent module monitoring and shutdown, ease of installation
Weaknesses: Higher upfront costs than string inverters, limited repairability, requirement of one inverter per module
Opportunities: Growing solar PV installations especially in residential sector, initiatives toward distributed solar generation, advancements in power electronics
Threats: Price declines and commoditization of inverters, preference for AC modules in commercial PV plants, reliance on few component suppliers
Key Takeaways
The global solar micro inverter market is expected to witness high growth over the forecast period driven by initiatives to promote distributed solar generation along with a gradual decline in component prices. The residential sector is expected to dominate market demand over the coming years given micro inverters better suit residential rooftop installations.
Regional analysis shows that Asia Pacific dominated the global solar micro inverter market in 2020 led by countries like China, Japan, and India. Strong government support for solar power along with a large consumer base has cemented Asia Pacific's position as the dominant regional market. North America is another major regional market benefiting from renewable energy mandates and supportive net metering policies driving the deployment of residential solar systems.
Key players operating in the solar micro inverter market are Enphase Energy, SolarEdge Technologies, SunPower Corporation, Delta Energy Systems, Samil Power, ABB, and Siemens. Enphase Energy and SolarEdge Technologies together command over three-fourths of the global market share due to their technological supremacy and robust distribution networks particularly in the US and European markets.
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