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The global power inverter market size was valued USD 35.22 billion in 2021 and is projected to grow from USD 40.52 billion in 2022 to USD 117.26 billion by 2029, exhibiting a CAGR of 16.4% during the forecast period.
The global COVID-19 pandemic has been unprecedented and staggering, with power inverter experiencing higher-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global market exhibited a growth of 12.7% in 2020 as compared to 2019.
A power inverter converts Direct Current (DC) to Alternating Current (AC). The power inverter market growth is attributed to the growing solar industry. For instance, a car's battery uses direct current to electrical power components; many household electronics, on the other hand, use alternating current. The power inverter allows one to power these devices using electricity from the vehicle by converting it into usable electricity. The rising electricity demand, an increasing gap between the demand and supply of electricity, and many other factors are expected to increase the product demand.
Closure of Several Manufacturing Facilities Impacted the Market
The COVID-19 pandemic led to a decline in year-on-year growth, but the market didn’t witness negative growth. There were some renewable energy projects delayed, which impacted the market. In addition, companies in various regions have had to shut down their manufacturing facilities and services as partial or full lockdowns have been imposed to contain the pandemic. This closure of plants led to increased procurement costs of raw materials due to supply bottlenecks, ultimately leading to delays in order completion. The pandemic has therefore had a short-term impact on demand for inverters.
The outbreak of COVID-19 occurs when the country's execution of solar power projects is at its peak. India aims to achieve the 100 GW solar energy target by 2022. As of January 2020, India has about 35 GW of solar energy projects. India's PV sector is addressing the problems caused by the outbreak of the coronavirus and developing strategies to reach that goal. The global solar supply chain was affected as the crisis spread beyond China. In addition, India imports about 80% of solar cells and modules from China, along with other equipment such as inverters, prefabricated structures, and raw materials. Developers of solar projects in India were concerned about the initial slowdown in production in China and the subsequent delay in the project due to the lockdown in India.
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Increasing Technological Developments and Rising Disposable Incomes to Emerge as a Noticeable Trend
Rapid economic development and increasing disposable incomes of people worldwide have enabled them to spend more on products such as inverters that improve their lifestyles and provide convenience. In addition, with rapid urbanization and increasing electrification, most people rely on electronic devices and gadgets. This factor has created a significant need for uninterruptible power supplies, which has increased sales of inverters as an alternative backup solution in the event of outages. They are also silent and environment-friendly as they emit net CO2 emissions and eliminate the gasoline needed to run generators.
In addition, manufacturers invest in Research & Development (R&D) activities to introduce new technologies and improve their operational characteristics. In March 2022, Huawei introduced an intelligent string energy storage system with a Smart I-V Curve Diagnosis Tool, which performs comprehensive, real-time, and remote detection of PV systems at the string level. It generates automatic detection reports of underperforming PV arrays and helps utility-scale PV systems reduce O&M costs.
Growing Development of Solar Panels to Drive the Product Demand
The rapid development of the solar energy sector in terms of power generation and utilization has helped increase the number of solar systems for various applications worldwide. Solar power is the fastest-growing renewable energy, with 707.50 GW of solar capacity installed internationally. This impact and the installation of PV will drive the inverter market. According to the IEA, China, the U.S., Germany, Japan, and India are the major markets with the most significant number of new solar installations in 2020. In addition, the increasing number of PV installations worldwide creates potential growth opportunities for the solar inverter market growth.
The solar inverter market is currently in the growth stage, with increasing power demand and various global initiatives driving the implementation of renewable smart grids. At the country level, the major countries are the U.S., India, and China, collectively accounting for approximately 70% of global PV inverter installations. In 2021, India added a record 1.7 GW of rooftop solar capacity. Installations increased by 136% compared to 719 MW in 2020. In 2021, the commercial and residential segments accounted for 35% and 33% of installed rooftop solar capacity. Solar panels on industrial rooftops accounted for 26% and the remaining 6% came from the government segment.
Increasing Investment in Renewable Energy May Boost Market Growth
The importance of solar energy cannot be denied. Investing in PV systems leads to significant economic value, benefits, public health, and environment-friendliness. Furthermore, solar energy is becoming increasingly popular among home and business owners as people learn about its many benefits and installation costs decrease continuously. China, Japan, Germany, India, and the U.S. are actively investing in renewable energy to reduce carbon emissions. India has approved the launch of a Production-Linked Incentive (PLI) program for high-efficiency P.V. modules to improve India's manufacturing capacity of solar panels and increase exports – Atmanirbhar Bharat. The government has allocated USD 2.57 billion to the PLI program to facilitate producing high-efficiency solar panels.
According to the U.S. DOE, 173,000 terawatts of solar energy strike the earth continuously, more than 10,000 times the world's total energy use.
Germany aims to fulfill all its energy demand with supplies from renewable sources by 2035, compared to its previous target to abandon fossil fuels well before 2040. Furthermore, Europe's topmost economy has been under pressure from others.
High Installation and Maintenance Costs of Power Inverter Systems May Hamper Market Growth
The solar inverter cost is based on its brand and size. A string inverter can cost anywhere from USD 1,000 to over USD 2,000. Furthermore, if a battery inverter is used, the overall cost of the installation will generally increase by around USD 2,000 to USD 3,000.
Residential consumers in emerging nations do not want to spend large sums of money on maintaining equipment. This factor might slow down the adoption of power inverters. In addition, consumers are cautious about shifting from existing alternatives due to the price war between different technologies. This factor might hamper the market.
Governments globally are offering some incentives to facilitate the adoption of power inverter systems to support the evolution of the usage of the product. Countries such as India support in covering some product costs, which may help consumers. These factors are impacting the development of the market in developing countries over the next few years. Although technological advances help cut product prices to ideal levels.
The Government of India subsidizes the residential sector only. According to the Department of New and Renewable Energy, the central government pays 40% of the standard fitting rate as a subsidy for installing rooftop solar panels in the general states.
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Based on product, the market is classified into string inString Inverter Segment to Expand Rapidly Owing to its Adoption in a Wide Range of Residential and Commercial Sectorsverter, micro inverter, and central inverter, and others. The string inverter segment is one of the fastest-growing segments during the forecast period. This growth is attributed to the increasing adoption of renewable sources to supply electricity and the widespread adoption of string inverters across the residential and commercial sectors.
Central inverter is also one of the dominant segments, and this inverter is highly reliable, timely maintained, and protected during installation. They are integrated into large arrays installed in field installations, industrial plants, and buildings. Inverters take DC power from all PV panels and convert it to AC power, becoming a central point for power distribution. Additionally, some government policies introducing renewable power generation to reduce carbon emissions will add industrial value.
Micro inverters are module-level electronics and have become popular in commercial and industrial environments. These inverters have high reliability, increased efficiency, and performance through Maximum PowePoint Tracker (MPPT), easy installation, no space limitations, and low costs.
High Segment Dominates Due to Rising Adoption from the Utility Sector
The high segment is dominating the market due to the growing importance of the power generation, distribution, and transmission sectors. In addition, the increased size of PV power plants in significant commercial & industrial and utility installations is fueling the growth of the high output voltage inverter market during the forecast period.
Utility Segment Dominates Due to Increasing Investments in Renewable Energy by Various Regions Globally
Based on end-user, the market is categorized into residential, commercial, utility, automotive, and others.
The utility segment is one of the fastest-growing segments during the forecast period. According to the United Nations, the global demand for renewable energy is gradually increasing, especially in developing countries. Production with global installed capacity and all renewable energy technologies is also growing. In addition, various countries are setting renewable energy and energy efficiency goals and support policies. The increasing demand for renewable energy will impact the demand for power inverters in the global market.
The automotive segment is the fastest-growing segment during the forecast period. Furthermore, the adoption of electric vehicles is increasing significantly due to the implementation of emission regulations to limit emissions from conventional vehicles. In addition to electric vehicles, inverters are also used in traditional vehicles for onboard power supplies. These factors increased the demand for vehicle inverters, which should fuel the growth of the automotive segment.
Asia Pacific Power Inverter Market Size, 2021 (USD Billion)
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Asia Pacific dominates the global market. This dominance is attributed to key regional players in countries such as China, India, Japan, and others. In addition, Asia Pacific is one of the major players in the production of power inverters as well as one of the major regions in terms of demand as it has rising consumers of electric vehicles, solar energy, and others.
North America is also one of the significant regions in the market due to the presence of key players in the U.S. Additionally, the U.S. has some major inverter manufacturers and one of the world's best research and development infrastructures that helps them develop and manufacture inverters.
Europe is also one of the dominating regions due to the presence of an established consumer base such as the electric vehicle industry, solar, and others. Furthermore, Latin America and the Middle East & Africa are also expected to grow at a noteworthy rate. This growth is attributed to the rising demand from end-users such as utility, residential, and automotive.
Besides, the North American market is dominated by the U.S. The U.S. accounts for maximum share in the region. The presence of favorable regional policies and regulations, coupled with government initiatives to boost renewable energy generation in the U.S., drives the North American market. Further, initiatives taken by the government to enhance the use of clean energy technologies have driven the market in the country.
Furthermore, the usage of electric vehicles has increased in several regions/countries due to increasing fuel prices. Electric vehicles are a substitute for traditional vehicles powered by lithium-ion batteries. The rising number of electric vehicles in the region consequently boosts the product demand.
Furthermore, Germany dominates the Europe power inverter market share. Customers understand energy technology development’s importance while also recognizing its impact on the power and energy industries. Furthermore, due to rapidly increasing energy demand from various sectors, a positive outlook for clean energy deployment and an encouraging regulatory framework are key factors boosting regional expansion.
Germany's National Climate Protection Strategy is defined in the Climate Protection Plan 2050, which specifies long-term pathways to sector-specific emission reductions as part of the energy transition. Compared to the base year of 1990, the main goal is to reduce greenhouse gas (GHG) emissions by at least 40% by 2020, 55% by 2030, 70% by 2040, and 80-95% reduction. This strategy will increase the number of solar plants while power plants might increase the product demand.
The Asia Pacific market is studied across China, India, Japan, Australia, Southeast Asia, and the rest of Asia Pacific. The increasing investments in photovoltaic (PV) plants, the rise of solar panel installations in the commercial sector, and the shift in transportation toward electric vehicles in China, India, Australia, and Japan might boost the market in the region.
The Latin American market for inverters is studied in Brazil, Mexico, and the rest of Latin America. Mexico dominates in the Latin America power inverter market share due to ongoing urbanization and population, and energy demands have skyrocketed, requiring alternative energy sources to meet those demands. In addition, the demand for electric trucks in South America is increasing. Factors such as achieving energy efficiency by reducing emissions, the need to meet future energy needs, an expected increase in EV adoption for logistics and municipal applications, and investment by OEMs to start EV production in the region are driving the development of the market for inverters.
The Middle East & Africa market is studied across G.C.C., South Africa, and the rest of the Middle East & Africa. Due to various government policies to support the renewable energy sector, G.C.C. is expected to grow with the highest CAGR during the projected timeframe.
Huawei Technologies Co., Ltd. is Expected to Dominate with its Competitive Pricing and High-quality Products
The company has a broad range of power inverters used across all industries. In addition, another strength of Huawei is innovation in its technology. Since its inception, the company has focused strongly on research and innovation. It invests significant sums in research and development every year. More and many innovative technologies come from this brand. For instance, in June 2022, Huawei launched residential inverters and Energy Storage Systems (ESS) for households. This product launch has reinforced its product portfolio.
An Infographic Representation of Power Inverter Market
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The research report highlights leading regions worldwide to understand the user better. Furthermore, the report provides insights into the latest industry trends and analyzes technologies being deployed at a rapid pace globally. It further highlights some growth-stimulating factors and restraints, helping the reader gain in-depth knowledge about the industry.
Value (USD Billion)
By Product, Output Voltage, End-user, and Region
By Output Voltage
Fortune Business Insights says that the global market size was USD 35.22 billion in 2021 and is projected to reach USD 117.26 billion by 2029.
In 2021, Asia Pacific stood at USD 11.81 billion.
The market will grow at a CAGR of 16.4%, exhibiting substantial growth during the forecast period (2022-2029).
Huawei Technologies Co., Ltd and Sungrow are the key players operating in the market.
Asia Pacific dominated the market in terms of share in 2021.
The string inverter segment is anticipated to dominate this market during the forecast period.
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