PV inverter market down in 2011 but growth still possible, for some at least…
The market is down, but should improve depending on stabilizing module prices. The overall market future looks bright for the next five years, however.
As positive as I am about the outlook for the PV market, it certainly looks like 2011 will be a difficult year for inverter suppliers. Market revenues are set to fall by more than 10% this year, not because of low installation growth, but actually as a direct result of 2010’s bumper year. Simply put: too many inverters were sold last year than were needed and this is what will cause the market to fall this year. Firstly because the inventory needs to be burned down before fresh demand can emerge, and secondly because the high inventory and easy availability has put great pressure on prices to fall.
Our latest forecast showing PV inverter shipments at 22 GW and revenues of almost $6 billion in 2011 is of course totally dependent on our installation forecast. Currently we’re predicting a much better H2 for 2011, but this is dependent on module prices stabilizing – most customers aren’t going to be pushing ahead with projects when module prices are falling off a cliff. We’re optimistic this will lead to a strong Q3 and an even better Q4 – it could even be that demand spikes so suddenly that suppliers are caught out and a supply bottleneck happens again. Unlikely, but still very possible.
It’s certainly not all doom and gloom for inverter suppliers. A flat or slightly down market this year needs to be put in context – the market more than doubled last year. When revenues grew by close to 140% in 2010, it’s tough to follow this with further growth this year and many will be grateful for a “period of calm” and a chance to reassess rather than just build and ship as much product as is physically possible. Furthermore, not all segments of the market will fall and significant growth opportunities still exist. For example, whilst revenues in EMEA will be down in 2011 (largely because of the pulled forward demand in 2010), inverter revenues in Americas will nearly double and will grow more than 30% in Asia. Similarly, the inventory issue is mainly hitting suppliers of smaller string inverters, in contrast demand for larger 3-phase products will remain robust in 2011, with revenues growing by around 20%.
And wanting to finish off this blog entry on another high note, although the PV inverter market will dip this year, our latest report on the market shows that revenues will grow to nearly $10 billion by 2015 giving suppliers plenty to look forward to over the next 5 years!