The Chinese photovoltaic (PV) solar inverter market grew by more than 100 percent in 2013, providing a huge boost to the country's domestic supplier base, according to the latest report from IHS Technology.
The 10 largest suppliers in China 2013 were all domestic companies, and all benefited from explosive growth as the market expanded to nearly $800 million, up from $400 million in 2012. China's PV inverter market is forecast to generate robust growth over the coming years and reach 18 gigawatts (GW) of annual shipments in 2018, up from 11 GW in 2013.
Much of this growth will be driven by the increasing momentum of the distributed PV business. China's push toward distributed PV has been to slow to get started, and IHS believes that actual installations fell significantly short of the 8 GW target that was set for 2013. Nonetheless, this increasingly important segment will be a key driver for growth.
Furthermore, this shift toward smaller rooftop systems will spur the adoption of lower-power inverters.
Inverters play an essential role in PV installations, converting the direct current (DC) electricity produced by solar panels into alternating current (AC) useful in power grids.
These findings can be found in the report, "PV Inverter China Market Report - 2014," from the Power & Energy service of IHS.
For the second year in a row, no international suppliers appeared among the IHS ranking of the 10 largest PV inverter suppliers to China.
However, domestic suppliers also faced problems of their own. Although China represents a huge opportunity for its own suppliers in terms of volume, low pricing caused by fiercely competitive local companies, highly complex business conditions and lengthy credit terms have either prevented them from succeeding in gaining a sizable share of the market, or forced them to concentrate on other regions.
For the fourth consecutive year, Sungrow was the largest supplier to the Chinese market, accounting for more than 30 percent of industry revenue in 2013. The remaining top 5 suppliers were TBEA Sunoasis, Emerson Network Power, Chint and KStar, all of which held a market share of more than 4 percent.
Whilst growing rapidly in 2013, China's PV inverter supplier base showed some signs of fragmentation, and the number of suppliers with a market share of greater than 2 percent increased from 10 in 2012, to 13 in 2013.
Distributed PV drives long-term growth and shift toward smaller inverters
China has also begun to show increasing support for smaller distributed PV systems within the last year.
"After several years of dramatic growth for huge ground-mount utility-scale projects in remote areas of the country, China has begun to place increased emphasis on the development of distributed rooftop solar in areas with high demand for electricity," said Frank Xie, senior PV market analyst at IHS. "However, the development of this market has fallen below expectations due to a lack of clear policy and funding, and also from a shortage of experience in installing rooftop systems."
IHS predicts that 4 GW of distributed PV systems will be completed in 2014, despite China's target for the year amounting to double that number.