Solar Inverter Market: Analysis By Type (Central, String and Micro), By Phase (Single Phase and Three Phase), By Connection Type (On Grid and Off Grid), By End User (Utilities, Residential and Commercial & Industrial), By Region Size & Forecast and Forecast up to 2029

A solar PV inverter is a power inverter that converts electricity from a photovoltaic (PV) solar panel in direct current (DC) to alternating current (AC) at utility frequency. This can be utilized for residential and business electrical grids, as well as a local off-grid electrical network like micro grids. Global solar inverter market in 2023 was valued at US$12.81 billion, and is expected to reach US$24.40 billion by 2029.

Solar inverters are most commonly used in residential and utilities applications, and nowadays are increasingly used in the commercial & industrial projects across the globe. Rapid development in the renewable energy sector and easy installation of solar inverters are the key factors that drive the growth of the market. Due to infrastructural development and growing number of construction and building projects, the demand for solar inverter is growing at a rapid pace. In addition, supportive government policies & incentives to promote solar energy adoption, increased awareness among consumers & businesses about energy efficiency, rising investments in solar energy projects, ongoing shift towards decentralized energy generation, and growing corporate adoption of solar power is expected to augment the growth of the global solar inverter market in the forecasted period. The market is expected to grow at a CAGR of 11.34% over the projected period of 2024-2029.

Market Segmentation Analysis:

By Type: The report provides the bifurcation of the global solar inverter market into three segments on the basis of type, namely, central, string and micro. String solar inverters is the largest segment of the global solar inverter market due to the rapidly growing residential solar market, global shift towards renewable energy sources, high market availability and low initial investment of string inverters, rise of smart grid technology, and ongoing advancements in string inverter technology, such as higher efficiency ratings, greater durability, and enhanced monitoring capabilities. Furthermore, string-type inverters are ideal for commercial and residential applications, including modest utility installations of less than 1 MW. String inverters are ideal for households seeking low-cost PV systems or for properties with simple roofs and constant renewable electricity throughout the day.

Central solar inverters is the fastest growing segment of global solar inverter market owing to rising adoption of solar PV systems, increasing number of Large-scale solar projects, longer lifespan and durability of central inverters, and rise in demand for central inverters from large industrial and utility applications across the globe. Moreover, rapid industrialization and construction of renewable power infrastructure in the developing economies such as China, India, Japan, and others are further expected to fuel the demand for central inverters.

By Phase: The report provides the bifurcation of the global solar inverter market into two segments on the basis of phase: single phase and three phase. Three-phase solar inverters is the largest and fastest growing segment of global solar inverter market owing to increased commercial and industrial solar installations, rising demand for energy independence, increased desire to reduce reliance on conventional power sources, greater availability of financing options and power purchase agreements (PPAs) for solar projects, and ongoing integration of three-phase inverters with energy storage solutions. Furthermore, the shift from 1,000-volt to 1,500-volt solar arrays resulted in larger solar power plants in large commercial, industrial, and utility installations, fueling the growth of the three-phase solar inverter market throughout the projection period. In commercial and industrial solar installations, three-phase solar inverters are often employed.

By Connection Type: The report provides the bifurcation of the global solar inverter market into two segments on the basis of connection type: on grid and off grid. On grid solar inverters is the largest segment of global solar inverter market as a result of rapid urban and suburban expansion, increasing public and corporate focus on reducing carbon footprints, high efficiency and reliability with existing grid infrastructure, low maintenance costs, growing availability and decreasing costs of solar panels, and ongoing advancements of smart grid technologies. The major gains of the on-grid solar inverter are energy conversion, ensuring system safety, grid assistance, tracking power production, and many more. Furthermore, the increase in the segment is related to an increase in investment for direct provision of electricity rather than battery storage. Off grid solar inverters is the fastest growing segment of global solar inverter market owing to reducing dependency on fossil fuels, increased need for energy independence and security, rising efforts towards rural and remote electrification, increasing use of off-grid solar systems for backup power, declining costs of solar component, and increasing demand for remote power solutions for applications such as agricultural operations, telecommunications, and emergency services.

By End User: The report provides the bifurcation of the global solar inverter market into three segments on the basis of end user: utilities, residential and commercial & industrial. Utility is the largest segment of global solar inverter market. The segment has seen an increase because investment in utility-scale solar power plants, solar parks, and other solar structures has increased. Furthermore, the rise in construction projects such as decentralized solar power plants, rural electrification projects, solar power plants on water bodies and rooftops, and others is propelling the global solar inverter market for the utilities segment. Residential is the fastest growing segment owing to increasing electricity rates, rising investment in solar technology for home value appreciation, growing availability of residential solar products, rising concerns regarding grid reliability and power outages, and increased presence of favorable government incentives, tax credits, and rebates for residential solar installations.

By Region: The report provides insight into the global solar inverter market based on regions namely, North America, Europe, Asia Pacific, and rest of the world. Asia Pacific is the largest and fastest growing region of global solar inverter market. Expansion of the renewable energy sector, increased investment in upgrading aging power infrastructure, and industrialization in the region are expected to fuel market growth in the coming years. The solar inverter market in Asia Pacific is witnessing significant developments in the renewable energy sector due to increased initiatives towards climate change and net zero targets, which has supported the demand for inverters across countries of the region.

The integration of energy storage systems with solar inverters is anticipated to gain momentum in North America. Energy storage enables the efficient management and utilization of solar power, allowing users to store excess energy generated during the day for later use during peak demand or grid outages. This trend promotes self-consumption and grid independence, further enhancing the value and functionality of solar inverters. Also, installations in new construction activities and renovations mainly support the growth of the solar inverter market in North America. Many North American states have set aggressive renewable energy targets, intending to increase the amount of clean energy in their energy mix. These goals generate demand for solar power systems, which include solar inverters, which are critical components of solar energy generation.

Market Dynamics:

Growth Drivers: The global solar inverter market has been rapidly growing over the past few years, due to factors such as growing replacement demand for solar inverters, mounting home improvement, rapid urbanization, increasing power failures, rising number of solar installations attributed to government-led incentives and schemes, etc. Urban areas are experiencing a surge in population and infrastructure development, resulting in an increased energy demand. Solar energy, being a clean and renewable source, is being widely adopted as a sustainable solution to meet this growing energy requirement. High population density and intense economic activity characterize urban regions. As a result, there will be an increased demand for electricity to power residential, commercial, and industrial facilities. Also, homeowners are becoming more knowledgeable about the benefits of solar inverters, which has resulted in an increase in home remodeling projects including solar power systems.

Challenges: However, the global solar inverter market growth would be negatively impacted by various challenges such as safety risks associated with high DC voltages, high cost of solar inverters, etc. Solar inverters can be expensive, especially for bigger installations. This high initial cost may discourage potential consumers from adopting solar energy systems, particularly residential and small-scale commercial clients with limited budgets. For many individuals and organizations, the initial expenditure necessary for solar inverters might be a barrier to entry.

Trends: The global solar inverter market is projected to grow at a fast pace during the forecasted period, due to increasing demand for smart solar inverters, inflation reduction act (IRA), expansion of companies in ESS market, sustainability, positive shift towards decentralized power generation, etc. Energy Storage Systems (ESS) are quickly becoming a significant growth driver in the solar inverter business. The integration of energy storage technology with solar power systems, which allows for the storing of excess energy created during periods of sunlight for later consumption, is referred to as ESS. Energy storage systems need to be connected to inverters to integrate with the grid system.

This makes inverter companies a natural integrator of an ESS system. In addition, as a majority of ESS are integrated with solar and wind projects, solar inverter companies can leverage their existing customer networks and distribution channels to market their own ESS products. Also, sustainability is a major motivator for the global shift toward renewable energy sources. Solar energy, as a clean and abundant renewable energy source, plays an important part in this shift. Solar inverters are crucial components of solar power systems because they transform the direct current produced by solar panels into usable alternating current.

Competitive Landscape:

The global solar inverter market is consolidated, with multiple significant competitors, including well-established solar inverter companies as well as small and medium-sized businesses. The key players of the market are:

• Schneider Electric SE
• SolarEdge Technologies, Inc.
• Delta Electronics, Inc.
• Huawei Investment & Holding Co. Ltd.
• GoodWe
• Sineng Electric Co., Ltd.
• Sungrow Power Supply Co., Ltd.
• SMA Solar Technology AG
• FIMER S.p.A.
• Growatt
• Yaskawa Solectria Solar
• Ginlong (Solis) Technologies
• Power Electronics
• Hitachi Hi-Rel Power Electronics Private Limited

Also, the global residential solar inverter market, and global solar inverter (ex. residential) turned out to be a highly concentrated market, with few players accounting for the majority of the global market share.