Solar Inverter Market Report

The growth of solar inverters is also driven by the rising focus of various countries, such as the United States, the United Kingdom, India, and France, which offer various types of incentives like tax credits and subsidies to promote investments in solar infrastructure. For instance, the UK has developed an initiative to excel at the sale of solar, named the Smart Export Guarantee (SEG), where large energy suppliers pay homeowners for renewable energy they send back to the National Grid. Furthermore, India provides subsidies up to 90% for various solar systems, while the US allocated $15.6 billion for renewable energy subsidies in 2022. These incentives play a key role in making solar installations an economically feasible solution for consumers and businesses.

The demand for solar inverters is also increasing with the rising use and installation of residential solar. Rising energy costs drive demand for residential solar as homeowners seek savings and sustainable energy solutions. Energy independence and environmental concerns also contribute to growing interest in residential solar. Increasing growth is being analyzed for residential solar in countries such as the United States, the United Kingdom, France, etc. For instance, in the United States, approximately 7 GW of residential solar was installed in 2023, registering the 5th consecutive record year for the segment. Thus, the rising demand for residential solar is expected to boost the demand for the solar inverter market.

The major problem faced by the solar inverter market is the improper installation of solar inverters. Improper installation of solar inverters can lead to serious electrical isolation faults, posing safety risks like fires or shocks. Inverters must effectively separate incoming DC from solar panels and AC for the home or grid. For instance, in September 2023, a man at Hong Kong Science Park died due to electrocution while connecting solar panels; similarly, in June 2023, a group of workers were electrocuted during solar panel installation, thus proving improper installation, a major threat. Electrical isolation is crucial to prevent system faults from affecting grid safety or users. When faults occur, unintended current paths can bypass protective measures, leaving the system vulnerable to more electrical failures and impacting the overall performance and efficiency of the solar power system.

Furthermore, solar inverters commonly face challenges with overheating due to poor ventilation and placement in high ambient temperatures. Excessive heat can impact efficiency and longevity by stressing critical internal components like capacitors and transistors. These components are crucial for converting DC to AC power, and their degradation can lead to reduced efficiency, increased noise, and premature failure. Capacitors are especially sensitive to heat, losing their ability to store and regulate energy effectively, causing voltage irregularities that can affect performance and pose risks to connected devices.

To enable seamless energy storage, optimize self-consumption, and enhance grid stability, catering to both residential and commercial users AEG unveils hybrid inverters for high-voltage PV systems. In July 2024, Germany's AEG launched new three-phase hybrid inverters for applications in high-voltage rooftop PV systems. There were five versions of the new products, with power outputs ranging from 6 kW to 15 kW and the maximum output current ranging from 8.7 A to 21.7 A. The devices measured 460 mm x 496 mm x 221 mm, weighed 23 kg, and offered 3 maximum power point tracking (MPPT) channels. MPPT voltage ranged from 120 V to 850 V, while the maximum input current for MPPT was 16 A. The inverter efficiency was 98.2%, and the maximum input voltage for all devices was 1,000 V. Its European efficiency rating was 97.5%, and the MPPT efficiency was 99.5%. The new product also featured natural convection cooling and IP66-rated protection.

The launch of new solar inverters can significantly expand the solar inverter market in several ways, such as innovation and technology, diverse applications, etc. For instance, in May 2023, Solis, a global leading manufacturer of solar and energy storage solutions, announced the launch of their latest product, the S6 Advanced Power Hybrid Inverter. With an emphasis on generator connectivity and multiple input methods, the S6 offered automatic UPS switching and up to 10 seconds of 200% surge power backup overload capability. One of the unique features of the S6 is its support for both 1-phase and 3-phase flexible connections with a maximum of 48 kW in parallel. Additionally, the S6 could handle up to 190A max charge/discharge current and came equipped with six customizable charge/discharge time settings. The inverter is compatible with both lead-acid and lithium batteries, offering multiple battery protection features. Thus, a successful solar inverter product launch can energize the market by attracting new customers, encouraging innovation, and fostering competition, ultimately contributing to the growth of the solar energy sector.

The demand for solar inverters is expected to rise in Asia Pacific countries such as India and China due to the rising production of EV cars and the leading agricultural market. China is considered a lucrative market due to the rising sale of EV cars. As per the data of the U.S. International Trade Commission, the EV exports of China from 2018 to 2023 experienced a growth of 1016%, and nearly 1.6 million electric vehicles were exported in 2023, which was named the largest volume of any exporter. Furthermore, the average unit value of Chinese EV exports increased from US$ 2,000 to US$23,100. Also, India can be considered a lucrative market due to the rising sales of agricultural markets. As per the data of the Indian Brand Equity Foundation, the agricultural sector is expected to reach US$ 24 billion by 2025, and India holds 2nd rank among top food-producing countries. Thus, the rising agricultural sector and solar panel exports in the Asia-Pacific region boost the demand for the solar panel market.

North America, especially the United States, can be considered a lucrative market due to the rise in solar manufacturing. As per the data of the International Solar Alliance, solar manufacturing is on the rise due to the expansion and setting up of new factories, resulting in 155 GW of new production capacity across the solar supply chain. This includes 85 GW of solar module capacity, 43 GW of solar cells, 20 GW of silicon ingots and wafers, and 7 GW of inverters. Additionally, 65 GWh of power storage production capacity has been announced. The U.S. solar industry aims to reach 50 GW of domestic solar manufacturing capacity by 2030.