Top Photovoltaic inverter companies are set to face challenging times in 2013 as global solar energy demand shifts from the West to the East. Most of the top solar inverter manufacturers are from Europe (SMA Solar, Fronius, Kaco) and USA (Power One, AEIS) unlike solar panel companies which are mostly Chinese. While solar panel prices have gone down by 80% in the last few years, solar inverter prices have declined at a much slower pace. However that is changing with solar inverter prices set to decline by 20% in 2012. The newer larger markets of Japan and China are very tough for the Western companies to crack given their preference for local inverter companies. China is set to be the largest market in 2013 and the top 10 companies have almost no chance of gaining a meaningful marketshare.
SMA Solar caused a major stock crash, after its forecast of a possible loss in 2013 as its revenues and margins have declined sharply in the last couple of years. USA Solar inverter maker Satcon is already bankrupt and others face tough times. The emerging markets is where the growth is, but the distribution costs are much higher and prices are much lower. Note 2013 is going to be another big year for solar energy with solar sales to reach between 35-40 GW (up from around 30 GW this year). However despite the strong growth almost every solar company is losing money as the massive overcapacity keeps the bargaining power in the hands of solar buyers compared to the sellers. The Chinese support of zombie companies is preventing a return to normalcy leading to a painful, protracted downturn.
It is notoriously difficult for a foreign company to make a mark in China where local companies have a huge advantage through cost and implicit support. So SMA Solar is set to lose out in the biggest solar inverter market. Also SMA Solar Inverters suffer from the problem of higher costs compared to the Asian solar inverter players. Now the biggest PV inverter player SMA too has been forced to downsize as it can no longer maintain the boom time growth and profits. The whole solar industry has seen a strong decline in stock prices and SMA Solar led to a sharp decline in all listed US as well as European solar stocks.
IMS Research (recently acquired by IHS Inc. (NYSE: IHS)) forecasts 2013 to be another challenging year for photovoltaic (PV) inverter manufacturers, with flat revenue growth globally and a major shift away from traditional markets leading to a reshaping of the supplier base according to the company’s latest report from. The top ten inverter manufacturers are likely to suffer because of falling inverter prices and because new markets such as Japan, China, India and the U.S. will prove difficult to penetrate and may not compensate for decreases in their core markets, Germany and Italy. Recent announcements of profit warnings, and Chapter 11 filings by leading suppliers SMA and Satcon highlight the challenging conditions being experienced by all PV inverter manufacturers at present and this may not improve until 2014.
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