Europe Solar Inverter Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Europe Solar Inverter Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Europe solar inverters market is expected to register a CAGR of 5% during the forecast period. With the COVID-19 outbreak in Q1 of 2020, the market growth declined due to the lockdown with delays in manufacturing new inverters, capacity addition outlook, and financial challenges for the major player's value chain. Factors such as supportive government initiatives and investment in electrification using solar energy are likely to support Europe's solar inverters market. However, lack of general awareness, infrastructure development costs, and recent subsidy cuts on solar panels by governments in the Europe region is expected to hinder the market growth during the study period.

Key Highlights

• Central Inverters have dominated the market in the past and are expected to grow during the forecast period.
• Inverter manufacturers strive for innovation and apadtion of the latest technologies powered by solar energy. This factor is expected to create immense opportunities for Europe's solar inverter market in the near future.
• Germany is expected to be the fastest and largest growing market during the forecast period, with the majority of the demand coming from Residential, and Utility-scale projects.

Key Market TrendsCentral Inverters Expected to Dominate the Market

• A central inverter is a large grid feeder. It is often used in solar photovoltaic systems with rated outputs over 100 kWp. Typically, floor or ground-mounted inverters convert DC power collected from a solar array into AC power for grid connection. These devices range in capacity from around 50kW to 1MW and can be used indoors or outdoors.
• Generally, a central inverter consists of one DC-AC conversion stage. Some inverters also have a DC-DC boost stage to increase their MPP (Maximum Power Point) voltage range. Low-frequency transformers are sometimes used to boost the AC voltage and provide isolation at the output. However, this reduces efficiency and increases the inverter's size, weight, and cost.
• A central inverter typically has a maximum input voltage of 1,000V. However, some newer central inverters already come with 1,500V input voltage. These inverters allow PV arrays based on a maximum voltage of 1,500V, requiring fewer BOS (balance of system) components.
• Central Inverters can be monolithic (using a single power train and multi-MPPT tracker) or modular (using multiple power trains). Modular inverters are more complex but can maintain reduced power output if one or more modules fail and can use either a multi-MPPT or a master-slave control approach. The multi-MPPT system uses a separate converter and MPPT for each floating sub-array, increasing the overall energy harvest under partial shading conditions. In the Master-Slave approach, the Controller module is always on. It commands the slave modules (the slaves) to switch on when more power is available from the array, which maximizes inverter efficiency in low-insolation environments.
• As central inverters are used for utility-scale applications, they should produce the same voltage and frequency as that of the electric grid where they are used. As there are a lot of different electric grid standards worldwide, manufacturers are allowed to customize these parameters to match the specific requirements in terms of the number of phases; most central inverters manufactured are three-phase inverters.
• In January 2022, Sungrow launched its new “1+X” central modular inverter with an output capacity of 1.1MW at the World Future Energy Summit in Abu Dhabi. This 1+X modular inverter can be combined into eight units to reach a power of 8.8MW and features a DC/ESS interface for the connection of energy storage systems (ESS).
• Moreover, in March 2021, Sungrow supplies its central inverters to EnBW’s 187MW solar park in Werneuchen, Brandenburg, Germany. The solar park will be the largest subsidy-free project in the country. The project “Weesow-Willmersdorf” has received 42 units of Sungrow’s SG3125HV central inverter solutions and 21 units of 7.2MVA medium voltage skids, including transformers and switch gears.
• Therefore, owing to the above points, central inverters segment is expected to dominate the market growth during the forecast period.

Germany Expected to Dominate the Market

• Germany is the largest solar photovoltaic market in Europe in terms of installed capacity which justifies it being one of the front runners in energy and climate security, globally. The country has witnessed significant developments in the solar PV market and is likely to continue to do so, due to a combination of self-consumption with attractive feed-in premiums especially for medium- to large-scale commercial systems ranging from 40 kW to 750 kW.
• The major driver for the country's solar inverters market has been the FiT scheme, which has made it lucrative for homeowners as well as small businesses to opt for solar power.
• The cumulative solar photovoltaic installed capacity in Germany has witnessed significant growth. The solar PV installed capacity is 58.7GW in 2021, and 53.8GW in 2020. There has been 9.1% year-on-year growth in 2021, compared to the previous year.
• Under the Renewable Energy Act of 2021, solar PV installations on rooftops of over 750 kilowatt-peak (kWp) to participate in tenders, while all systems between 300 and 750 kW are offered the choice of either participating in a tender or taking advantage of fixed feed-in tariffs and consume part of their electricity themselves. The latter will only receive feed-in payments for 50% of the electricity they generate.
• In May 2022, Germany's Federal Network Agency, the Bundesnetzagentur, concluded the third rooftop PV tender with an average price of EUR 0.0853/kWh. The agency reviewed 171 bids with a total capacity of 212 MW and selected 163 projects totaling 204 MW. The final prices ranged between EUR 0.07 /kWh and EUR 0.0891/kWh. The second rooftop PV tender was concluded in January 2022, and the agency reviewed 209 bids with a total capacity of 233 MW, of which 136 projects were selected, totaling 154MW. The final prices ranged between EUR 0.0570/kWh and EUR 0.0828/kWh. The final average price was EUR 0.0743.
• Additionally, in April 2022, Germany's Federal Network Agency announced that the agency had selected 201 proposals with a combined output of 1.084 GW under the solar auction, up from 510.34 MW in July 2021. The bids in the round ranged from EUR 0.040 to EUR 0.055 per kWh. The volume-weighted average price stood at EUR 0.0519 (USD 0.057) per kWh, up from EUR 0.050 per kWh in the previous round.
• Instead of a centralized generation of utility-scale thermal power, localized renewable generation is the only way to decarbonize the power generation sector. Distributed grid offers an attractive way to integrate increasing volumes of renewable energy into the energy mix.
• With the cost of solar PV modules and energy storage systems, such as lithium-ion batteries, reduced and the added benefit of reduced ancillary cost at the time of peak demand, the solar PV market is likely to increase during the forecast period, which, in turn, is expected to drive the solar inverters market in the country.

Competitive Landscape

The Europe Solar Inverter Market is highly fragmented. The key players in the market include FIMER SpA, Schneider Electric SE, Siemens AG, Mitsubishi Electric Corporation, and General Electric Company, among others.

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