Frost: Solar Effect Boosts European Inverters Market
March 12, 2008 // Published as a news service by IHS
Europe's renewable energy boom has opened up an unprecedented market for solar energy-based inverters, according to Frost & Sullivan.
As an indispensable component of photovoltaic (PV) power systems, inverters typically convert direct current (DC) generated via PV modules from sunlight to alternating current (AC) for grid-connected systems, and are often used on boats, caravans and in remote areas.
The inverters for solar energy systems hold 99.4% of the renewable energy markets, analysts said, and their revenues are expected to increase at a compound annual growth rate (CAGR) of 24.9% from 2007 to 2014.
"PV inverters offer many advantages: first of all, ease in implementation in the urban environment for high consumption generation of electricity even in dim sunlight," said Frost & Sullivan research analyst Chandni Raj.
"They also have limited impact on surroundings. These are two key factors that are encouraging the market. Moreover, they offer better control over power consumption and lower electricity bills."
Germany takes the lion's share of sales in Europe, analysts said. It is a major producer and consumer of PV inverters and maintains a clear lead.
"The German trump card is not an excess of sunshine over other regions," said Raj. "It is the farsighted vision and support of the German government, precisely the Renewable Energy Sources Act of 2000, according to which Germany has to generate an extra 9,500 GW [gigawatt] from renewable sources by 2010."
Raj said to encourage people, the government offered four times the market price for power generated from renewable energy for 20 years, thereby making it easier and faster to pay back investments. "The act that prioritized renewable energy relates to its purchase and compensation. Its amendment in 2004 boosted the industry. The feed-in tariffs (FITs) and incentives worked like a magic wand, accelerating renewable energy growth," Raj said.
Germany is followed by Spain, in terms of PV inverter hotspots. "Spain has made amazing strides in the renewable energy-based inverters industry in a short span of time owing to the generous government subsidies," said Raj.
Analysts said Germany and Spain are driving the European market for PV inverters and boast some of the top-rung players in the industry. Italy, U.K., Austria, Switzerland, Denmark and the Netherlands have small, albeit growing markets. Greece and Portugal are also evolving to be highly-promising markets.
"Some countries are growing fast. Some others are showing interesting signs of expansion. The European market as a whole now sees soaring sales and spiraling growth," said Raj.
With a large number of players, innovations and new entrants, the market for PV inverters in Europe is exceedingly competitive. As a result, analysts said it is expected that inverter prices will come down and products with innovative features and greater efficiency will flood the marketplace.
Source: Frost & Sullivan.