PV inverter after-sales service market to double by 2017

Despite PV inverter hardware profit margins being squeezed, the after-sales service market is forecast to more than double by 2017 to reach $1.7 billion, providing suppliers with a valuable additional profit source.


IMS Research (acquired by IHS, Inc.)The market for photovoltaic (PV) inverter service plans and extended warranties is forecast to grow by 110% between 2012 and 2017, according to a recent report entitled PV Inverter Service Plans and Extended Warranties from IMS Research, now part of IHS Inc. Despite PV inverter hardware profit margins being squeezed, the after-sales service market is forecast to more than double by 2017 to reach $1.7 billion, providing suppliers with a valuable additional profit source. 

The analysis revealed that one of the key drivers of this growth will be demand for utility-scale installations which is forecast to be one of the fastest growing segments over the next five years. These systems will typically use large three-phase inverters which will often be purchased with an annual service plan to ensure optimal operation. In 2012, 26% of high power three-phase inverters were sold with a service plan attached, and this is forecast to increase to 34% by 2017. In many cases, banks and finance providers will specify that inverter service plans are required as a condition of the loan in order to ensure that PV installations operate efficiently and that inverter downtime is minimized.

IMS Research (acquired by IHS, Inc.)

Although the PV inverter after-sales service market will present revenue growth opportunities, a variety of challenges exist for suppliers, including coping with the PV market becoming more geographically fragmented.

“Along with local legislation stipulating varying minimum warranty lengths in different countries, suppliers will have to establish service offices in new emerging markets in order to provide customers with the adequate response times and minimum levels of after-sales service,” explained Cormac Gilligan, PV analyst at IHS. “Industrial inverter manufacturers that are not solely focused on PV may initially be best placed to offer after-sales service in new PV markets, as they often have existing operations established in these regions to serve other industries, whereas pure-play PV inverter manufacturer may have to use third party service partners until they can establish a local service center in these new emerging markets.”

In order for inverter suppliers to promote their after-sales service and distinguish themselves from the competition, they are developing different approaches and strategies for marketing and providing service plans and extended warranties. As inverter suppliers are under increasing pressure to decrease their inverter hardware prices and as new competing technologies such as microinverters with longer standard warranty lengths are shipped in greater numbers, some inverter suppliers are offering longer standard warranties at no extra charge and some central inverter manufacturers are offering to provide full PV plant operations and maintenance.

No comments
The Engineers' Choice Awards highlight some of the best new control, instrumentation and automation products as chosen by...
The System Integrator Giants program lists the top 100 system integrators among companies listed in CFE Media's Global System Integrator Database.
The Engineering Leaders Under 40 program identifies and gives recognition to young engineers who...
This eGuide illustrates solutions, applications and benefits of machine vision systems.
Learn how to increase device reliability in harsh environments and decrease unplanned system downtime.
This eGuide contains a series of articles and videos that considers theoretical and practical; immediate needs and a look into the future.
Choosing controllers: PLCs, PACs, IPCs, DCS? What's best for your application?; Wireless trends; Design, integration; Manufacturing Day; Product Exclusive
Variable speed drives: Smooth, efficient, electrically quite motion control; Process control upgrades; Mobile intelligence; Product finalists: Vote now; Product Exclusives
Machine design tips: Pneumatic or electric; Software upgrades; Ethernet advantages; Additive manufacturing; Engineering Leaders; Product exclusives: PLC, HMI, IO
This article collection contains the 5 most referenced articles on improving the use of PID.
Learn how Industry 4.0 adds supply chain efficiency, optimizes pricing, improves quality, and more.

Find and connect with the most suitable service provider for your unique application. Start searching the Global System Integrator Database Now!

Cyber security cost-efficient for industrial control systems; Extracting full value from operational data; Managing cyber security risks
Drilling for Big Data: Managing the flow of information; Big data drilldown series: Challenge and opportunity; OT to IT: Creating a circle of improvement; Industry loses best workers, again
Pipeline vulnerabilities? Securing hydrocarbon transit; Predictive analytics hit the mainstream; Dirty pipelines decrease flow, production—pig your line; Ensuring pipeline physical and cyber security