Evolving Market

By Ashay Abbhi

The solar power segment has witnessed significant growth in the past few years, owing to a rapid fall in tariffs, strong off-taker interest, the government’s push for installations and tendering, and a growing investor appetite. By March 2019, the cumulative installed solar power capacity had reached 26,384 MW for the ground-mounted segment and 1,796 MW for the rooftop solar segment. As of July 2019, the ground-mounted segment had added 1,546 MW, while the rooftop segment had grown by 344 MW, to bring the total capacity to 27,930 MW. Solar inverters form an important part of the solar power system, and solar capacity expansion has led to a significant growth in solar inverter market.

Market dynamics

According to BRIDGE TO INDIA, around 4,800 MW of projects were commissioned during 2018-19. In terms of market share, ABB was at the top spot, followed by Sungrow and TBEA. TMEIC and Huawei were at fourth and fifth places, respectively. It was a downfall for Huawei, which was the second-largest inverter supplier in the previous year.

ABB, which retained its top spot, dominated this year’s inverter installations with a market share of 22.8 per cent. In July 2019, the company reportedly signed an agreement with Italy-based FIMER to sell its solar inverter business to focus on its core portfolio in emerging markets. ABB’s exit from the Indian market will end its reign in the solar inverter market, unless FIMER can retain the former’s market share.

Sungrow’s market share stood at around 17 per cent, while that of TBEA was at 13.9 per cent. Huawei took home around 11 per cent of the market, followed by Hitachi at 8 per cent and Delta at a distant 2.83 per cent. Other notable inverter players include Schneider and GE at about 2.5 per cent each.

The situation is somewhat different in the rooftop solar segment, as per BRIDGE TO INDIA. The total rooftop solar capacity installed during the year stood at 1,836 MW. Delta accounted for the largest share in this segment, with around 19 per cent. It was followed by Solis at 11.11 per cent and ABB at 10.35 per cent. Other players in the top 10 included Sungrow (10.02 per cent), Goodwe (8.88 per cent), SMA (8.71 per cent), Growatt (8.17 per cent) and K-Star (4.96 per cent). Huawei’s share stood at 3.32 per cent, while KACO was at 1.03 per cent. Although Delta has retained its ranking from the previous year, Solis and ABB have been the biggest gainers, moving up to second and third positions from fifth and seventh, respectively. SMA slipped in its ranking, from second to sixth, while Growatt dropped from the third spot to the seventh position.

Technology trends

The solar inverter segment has evolved technologically, from being dominated by central inverters to having an increasing share of string inverters. While central inverters are connected to all arrays in a solar power module, string inverters are connected to each array of modules. The per unit cost of central inverters is lower vis-à-vis string inverters, however, the overall installation cost is lower for string inverters. Despite a large number of interconnections due to its modularity, string inverters have lower maintenance cost. The design of string inverters helps in isolating the affected array in case of an event, thereby reducing financial and technical losses as compared with central inverters.

According to GTM Research, the popularity of string inverters for utility-scale solar power plants has been on the rise. While the share of central inverters was nearly double that of string inverters in 2016, it fell sharply to a near equal share. During 2018-19, the share of string inverters increased to 53.4 per cent, from 50.6 per cent during 2017-18. It is expected that by 2022, the share of string inverters will reach 60.5 per cent.

Hybrid inverters with integrated energy storage technology are also gaining traction in the market. Direct current from the panels charges the batteries in this case and the power is then converted to alternate current by inverters. Hybrid inverters can help reduce the variability of solar power, thereby allowing greater grid stability while feeding the excess power into the grid.

Key market trends

The solar inverter segment follows the global solar power market trends closely. In countries with high irradiance such as India, solar power has already achieved grid parity and the rest of the world is expected to achieve that over the next two years. This encourages the adoption of solar power as a mainstream energy source, pushing forward the capacity installations in the utility-scale and rooftop solar segments. As countries realise that solar power has the potential to surpass fossil-fuel based power as the cheapest source of electricity, inverter sales are expected to soar.

The initial growth in the solar power market across the world, including India, was based on government subsidies and financial assistance. This provided the much-needed momentum to the segment, which is now able to sustain itself sans financial incentives in most countries. The solar power segment has now become market driven, which has translated into market forces determining equipment and power prices. With rising installations and greater demand, inverter prices have been falling and are expected to drop further.

The share of bifacial modules is expected to grow considerably in the next few years. Jinko Solar expects the technology to account for 40 per cent of all module installations by 2025 as compared to 3 per cent in 2018. As the module technology evolves, the need for the evolution of inverters to support the change in generation will arise. String inverters with multi-maximum power point tracking are best suited for bifacial modules. Therefore, the market for these is likely to expand in the coming years.

With ABB exiting the Indian solar inverter market, FIMER is likely to retain its manufacturing facilities in the country, entering the market with a strong head start. Meanwhile, in 2018, Sungrow opened a 1 GW capacity solar inverter manufacturing unit in Bengaluru, with plans to expand it to 3 GW. Meanwhile, as per reports, Huawei’s solar inverter arm has exited the US business. It has ceased all sales and laid off the workforce in the country. This could mean a shift in the company’s strategy towards India as a sales destination as well as a manufacturing hub.

Future outlook

Considering the target of 100 GW solar power installed capacity by 2022, the market for solar inverters is expected to improve further. Within the inverter market, technology trends point towards growth in the share of string inverters for utility-scale as well as rooftop solar power projects. The new hybrid inverter technology may have a long way to go before becoming mainstream, especially since its present design allows only for smaller capacities.

ABB’s exit has provided other players an opportunity to compete for a large market share. However, FIMER would be expected to put up a strong fight to retain ABB’s share in the Indian market. The inverter market is fairly consolidated and highly dominated by global manufacturers in India, and the absence of Indian manufacturers in the top five inverter manufacturers cannot be ignored. Therefore, there is a strong need to equip domestic manufacturers with the expertise to compete with international, mainly Chinese, inverter providers.

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