Increasing Investments in Renewable Energy Sector to Create Lucrative Opportunities for Solar Inverters Market during 2022–2028
According to our latest market study, titled “Solar Inverters Market Forecast to 2028 – COVID-19 Impact and Global Analysis – by Type, System Type, and End User,” the market is projected to reach US$ 16,327.06 million by 2028 from US$ 9,806.67 million in 2022. It is expected to grow at a CAGR of 8.9% from 2022 to 2028.
Investment in solar energy has improved significantly along with economic growth. However, there are significant country-by-country variations. According to the International Energy Agency (IEA), global energy demand increased by 4.6% in 2021, offsetting the 4% contraction in 2020. The anticipated investment growth in 2021 was a mixture of a cyclical response to economic recovery and a structural shift in capital flows toward cleaner technologies. After staying flat in 2020, global power sector investment increased by around 5% in 2021 to more than US$ 820 billion, according to the IEA estimates. The Renewables energy sector dominates investment in new power generation. In 2021, it was estimated to account for 70% of the total of US$ 530 billion spent on all new generation capacity. Investment in the renewable energy sector has increased due to well-established supply chains and the presence of lenders and financiers who understand that these sectors are seeking sustainable projects.
Further, investment in the renewable energy sector in India surged more than 125% year-on-year (Y-o-Y) to touch a record US$ 14.5 billion in the financial year 2021-22 (FY22), a report released by the Institute for Energy Economics and Financial Analysis (IEEFA) in June 2022. Conglomerates such as Reliance Industries (RIL) and the Adani group have ambitious plans to ramp up their renewable energy capacity.
Thus, the increasing investment in the renewable energy sector helps create opportunities for market players because, with the rapid development of the renewable energy sector, the solar inverters market will also grow over the next few years.
Based on type, the solar inverters market is segmented into central, string, and micro. The central segment led the market with the largest share in 2021. Based on system type, the market is bifurcated into on-grid and off-grid. The on-grid segment led the market with a larger share in 2021. Based on end user, the market is segmented into residential, commercial, and utility. The utility segment led the market with the largest share in 2021. By geography, the solar inverters market is segmented into North America, Europe, Asia Pacific (APAC), Middle East & Africa (MEA), and South America (SAM). The APAC segment led the solar inverters market with the largest share in 2021.
Solar inverters are essential devices in a photovoltaic (PV) system, which convert direct current (DC) power flowing from solar panels to alternating current (AC) power. Besides the conversion, solar inverters track voltage, allow grid connecting communication, and shut down during emergencies.
Solar inverters are used in residential and utility applications and are increasingly used in commercial and industrial projects worldwide. Further, solar PV inverters are available with distinct characteristics and features and consider different factors affecting solar system production. Critical factors include roof orientation, shading, roof inclination, tilting panels, and summer vs. winter production resulting in the required output.
Impact of COVID-19 Pandemic on Europe Solar Inverters Market
In 2020, a halt in the construction of new housing projects in urban areas hampered Europe's real estate industry growth. This has inflated real estate prices and unfair competition among licensed accommodation providers. Furthermore, in 2020, France and Spain experienced a decline in housing permits. Therefore, the solar inverters market had experienced a slowdown in 2020. During the COVID-19 pandemic in 2020, multiple supply chain disruptions occurred across various industries. The solar inverters market was adversely affected due to the discontinuation of operations of several industries, including process and discrete industries.
According to the World Manufacturing Production Statistics by the United Nations Industrial Development Organization (UNIDO), for the second quarter (April–June) of 2020, the manufacturing outcome of Europe decreased by 19.3%, making it the worst-affected industrialized region. Most manufacturing companies temporarily closed their factories or minimized production operations, which resulted in global trade loss. These factors hindered the solar inverters market in Europe in 2020.
However, in 2021, the outlook for residential construction remained positive. The UK experienced a surge in demand for housing due to the cut in stamp duty on new homes, which led to a rapid rise in new orders. Thus, there will be a positive impact of the COVID-19 pandemic on the solar inverters market in Europe during the forecast period.
ABB Ltd; Delta Electronics, Inc.; Enertechups; GOODWE; Power Electronics S.L.; Powerone Micro Systems Pvt.Ltd; Sineng Electric; SMA Solar Technology AG; Solaredge Technologies Inc.; and Hitachi Hi-Rel Power Electronics Pvt Ltd. are a few essential market players operating in the global solar inverters market. Several other market players have also been analyzed to understand the solar inverters market.
Solar Inverters Market — by Geography, 2021 and 2028 (%)
Solar Inverters Market Size, Share, Trends & Forecast till 2028
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