Frost: Inverter Market Jumps to 3B by 2014

July 9, 2008 // Published as a news service by IHS

According to Frost & Sullivan, the future looks extremely promising for market participants, even as they come in direct confrontation with manufacturers of conventional energy systems.

Analysts said a combination of technological innovations and proactive energy policies will take this industry through various challenges to emerge successful in the long term.

Recent analysis from Frost & Sullivan of the European inverter market for renewable energy systems found earned revenues of €654.4 million in 2007, with estimates to reach €3,105 million in 2014.

"A booming market in Spain is rewriting market dynamics for renewable energy-based inverters," said Frost & Sullivan research analyst Chandni Raj.

"Moreover, new incentives for green electricity in Portugal and Greece are set to accelerate the pace of growth in the future. Across Europe, renewable energy-based inverters registered growth of 36.7% in 2007 as compared to 2006."

The adoption of highly attractive financial incentives for renewable energy alternatives in Spain, Portugal and Greece, based on the German model, has spurred the growth of such energy sources. Analysts said these markets are experiencing soaring sales and spiraling growth, and are potential hotspots for renewable energy inverters.

Lower energy efficiency and difficulty in obtaining planning permits are the key challenges facing the European inverter market for renewable energy systems. Clean energies are still incapable of substituting oil and gas. Analysts said this is a major hurdle preventing any significant shift toward green energy.

Obtaining regulatory consents for alternative energy regulation is equally problematic. These issues, which discourage and delay installations, are affecting revenue generation, analysts said.

"Despite all their advantages, renewable energy systems are no match for oil and gas in terms of energy efficiency and energy density," said Raj. "As long as oil and gas remain superior to clean energies in this regard, the full potential of the renewable energy market and its inverter markets will remain untapped. Moreover, administrative hurdles and 'red-tapism' are discouraging potential investors."

The key to market success will be to boost the energy efficiency of renewable energy systems and related inverters through intense R&D and technological innovation. Analysts said this will need to be a collaborative effort by clean energy players and inverter manufacturers. Increasing the appeal of green energy through widespread media coverage will also promote market expansion.

Source: Frost & Sullivan.