The Shuffle Continues

Industry & Suppliers Photo: Kaco Photo:

SMA and ABB were the only non-movers in the latest ranking of global inverter suppliers, with SolarEdge the big risers and Advanced Energy’s exit from the industry creating an opportunity for other players to grow.

ally, and 24% in 2012. By the end of 2014 The shuffle continues that figure was 14% – still nearly double that of nearest rival ABB, but tangible evidence that its stranglehold was loos- Ranking inverter suppliers: Germany’s SMA looks to have put the troubles of 2014 ening in the face of Asian pressure. behind it this year, benefiting from Advanced Energy’s exit from the inverter market But according to the latest first half revenue data from IHS, SMA has engineered to increase its share of global revenue, while SolarEdge is the big riser so far in 2015. an upturn in its fortunes, securing 18% of global inverter revenues over the first six months of the year – an increase on the In May, data published by IHS painted tained their current share in each coun- 11% share it had secured at the same point a decidedly bleak picture for German try this year, it is possible that we would in 2014, and 4% more than the 14% mar- inverter specialist SMA. The analysts’ see a new global market leader,” said IHS ket share it attained over the entire course PV Inverter Market Tracker showed that senior analyst, solar supply chain, Cor- of last year. This is the first time SMA has the global PV inverter market shrank mac Gilligan, at the time. “In fact, for the increased its share of global revenue for 4% in 2014, with global revenue falling first time on record SMA could be dis- nearly five years – the undeniable fruits of to $6.6 billion. placed as the leading PV inverter sup- a root-and-branch restructuring process Intense price pressure drove this plier, if not in terms of revenue then quite that saw more than 1,600 jobs go over the downward trend and served to play into possibly in terms of MW shipments.” course of last year, a suite of new prod- the hands of the leading Chinese inverter Fast forward to fall and the threat of uct launches and the rather serendipitous suppliers – namely Sungrow and Huawei Sungrow usurping SMA as the world exit of U.S. company Advanced Energy – both of which made large gains in terms leader in terms of MW shipments from the inverter industry, which served of MW shipments. However, as the aver- remains, but in terms of both revenue and to create a revenue vacuum quickly filled age price of inverters in China remained overall market share the German giant by many of Europe’s more fleet-footed more than 50% below global averages has actually improved upon last year, and suppliers. ($0.07/W compared to $0.16/W), SMA is on course to perform far better in 2015 and ABB were able to cling on to their than it did in 2014. Wider trends of 2015 positions at the top of the revenue table. These are not the days of complete Ger- The impressive recovery of SMA this “Due to global demand shifting man domination, however. In 2010 SMA year has been newsworthy, but even that towards Asian markets, if suppliers main- cornered 40% of inverter revenue glob- is perhaps not the headline story. The

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expansion of module level power electronics (MLPE) continues apace, and two of the leading proponents in this space – Israeli power optimizer specialist SolarEdge and U.S. microinverter man- Photo: Enphase Energy Photo: ufacturer Enphase Energy – have both enjoyed a strong year so far in 2015. “The MLPE sector is still heavily dependent on the U.S. market, in particular the residential and small commercial segments in which they account for a large proportion of the market,” Gilli- gan told pv magazine. “There has been a lot of partnering with module suppliers in this space, and this is an area that we expect to continue to go from strength to strength.” Further trends covered by pv magazine throughout the year include a growing prevalence for three-phase string Enphase Energy’s microinverters have enjoyed impressive growth in the markets of Australia, New inverters at large scale, as well as a grow- Zealand, France and the U.K. as attitudes shift favorably towards the technology. ing preference for 1,500 V components across the solar supply chain. added, however, that IHS does not foresee liked, or where their projects are very “The emergence and continuous pro- a central inverter capacity issue just yet in stop-start,” warned Gilligan. “There will motion of string inverters in large-scale any of the major markets. eventually be more fallout post-2016 with installations, driven by Huawei in China At the Solar Power International (SPI) the ITC in the U.S. Market contraction in in particular (where the company is exhibition held in September, the grow- certain key markets will prove challeng- using its 30 kW – 40 kW inverters in util- ing trend for 1,500 V inverters proved ing for some companies.” ity-scale solar farms) will continue into a hot topic. IHS believes that further next year,” believes Gilligan. In the U.S. test installations at 1,500 V are likely SMA: A second wind market, central inverters are still the pre- to become more widely apparent in the The bigger they come, the harder they ferred option for most utility-scale instal- fourth quarter (Q4) of 2015, particularly fall. But size and strength also bring sta- lations, but – the IHS analyst adds – “this among suppliers such as SMA, ABB, bility, a longer reach and the ability to is beginning to change. If there is ever a TMEIC, Power Electronics and General see the wider picture. SMA was certainly shortage of central inverters due to lead Electric (GE). “We see the 1,500 V market on the ropes this time last year. Revenue times, then certain U.S. EPCs may well be taking off in the second half of 2016 in the share had fallen to 11% of the market, tempted to use string inverters in some U.S., where the main central inverter sup- having narrowed every year since 2010. markets across North America.” Gilligan pliers will have a product ready to shift,” At the height of summer 2014 the com- said Gilligan. “We know that some Chi- Top 10 inverter suppliers (global revenue share) nese suppliers have done something sim- ilar already in China, using 1,500 V in AT A GLANCE 1. SMA Solar Technology – large central inverters.” fi The tilt eastwards is a wider trend of t SMA engineers its rst increase in global revenue 2. ABB – 2010 the solar industry, and one that has been share since as the German inverter supplier reaps the benefits of a proactive restructuring 3. SolarEdge +8 evident in the inverter landscape. How- and marketing strategy. ever, with inverter prices still much lower 4. Omron –1 t Asian pressure has continued to grow, but lower

Graphic: pv magazine/Harald Schütt magazine/Harald pv Graphic: in many of the major Asian markets bar prices in China mean the revenues of the leading 5. Enphase Energy +1 Japan, suppliers that have greater mar- Chinese suppliers remain below those from the ket share in the U.S., Europe and some West. 6. Tabuchi –2 of the other emerging markets in Latin t The growing trend for MLPE technologies has served SolarEdge and Enphase Energy extremely 7. Schneider Electric +1 America and elsewhere are still able to well, with both companies growing their global compete in terms of global revenue. How- 8. Huawei +2 share. ever, the looming Investment Tax Credit t Japan’s leading inverter suppliers have enjoyed 9. TMEIC –4 (ITC) phase-down on the horizon at the a steady, if unspectacular year, with some begin- end of 2016 is likely to force many lead- ning the long process of expanding into foreign 10. Sungrow +3

Source: IHS Source: ing inverter suppliers to seek a more markets. t Wider trends include a continued preference for Rankings based on sales revenue for first half of 2015, represented as the geographically diverse revenue stream. company’s market share of the total global sales revenue – in US$ – of the “Price pressure is going to continue to string inverters at large scale and the emergence inverter (including microinverter) industry. of 1,500 volt inverters. Ranking changes compared to 2014 (based on sale revenue). strain some of the suppliers who have not achieved the volumes they would have

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pany cut its sales forecast and announced Gilligan says the company has “limited 4 GW in size. “The major advantage of that 600 staff would be losing their jobs. market share.” having a supplier like ABB in the Indian By January this year that figure had “The Chinese market is extremely large market is that the company has many ser- risen to 1,600 employees, of which around and highly competitive, particularly this vice engineers, a large after-sales team 1,300 jobs were to go in Germany – SMA’s year, because of the intense price pres- and plenty of subsidiaries so as regions domestic market. Pressure from Asian sure among the top five suppliers there,” take off ABB can supply products and suppliers had exacerbated an already said Gilligan. “SMA will instead apply its services quickly,” said Gilligan. “At util- dire situation in Europe and served to slash SMA’s global lead severely. “To return to profitability in this environ-

ment, we want to make adjustments to Photo: SolarEdge SMA’s structures in line with the lower sales level,” said SMA CEO Pierre-Pas- cal Urbon. Not only did SMA do just that, but it also successfully rolled out a suite of new products at the same time that one of its stiffest challengers in the U.S. market – Advanced Energy – blinked first and exited the inverter business. This freed up a raft of new opportunities and, just before pv magazine went to press, SMA revised its sales forecast for the year upwards by around $60 million. “SMA has had a very good year so far,” said Gilligan. “The major driver has been the North American market at utility- scale, where the company has certainly benefited from the exit of Advanced Energy, but also the fact that the company has introduced a lot of new product there – including the 1,500 V inverter and The SolarEdge HD-Wave inverter is an example of the company’s proactive approach in 2015. its new 2.5 MW central inverter –really helped SMA consolidate and grow its energy to those markets where they have ity-scale, having this comprehensive level position.” greater brand awareness and penetra- of service is crucial when entering new In the residential sector SMA has tion.” One such region will be southeast markets.” released its new Sunny Boy inverter, and Asia, where the solar markets of Thai- ABB has so far been able to increase its at commercial scale its 60 kW inverter – land, Malaysia and the Philippines hold share of global revenue to 9%, up slightly via the acquisition of Danfoss – has also a lot of promise, as does Australia, and from 8% at the end of 2014 and a fur- proven popular, as has the new 2.5 MW SMA remains one of the most successful ther increase on the 7% market share it central inverter. “This new portfolio has inverter suppliers in the Japanese mar- enjoyed midway through 2014, according assisted SMA’s turnaround. The company ket – a market notoriously dominated by to the latest IHS data. “ABB is still doing has become more competitive with not so domestic suppliers. very well, and is benefiting from the cur- many high overheads,” added Gilligan. And then there is India. “In India, rent environment where there is increas- SMA’s long-term activity in the U.S. which is a fragmented market that varies ing price pressure,” adds Gilligan. market has ensured good relationships by state, SMA is competing against com- Viewed throughout the industry as one with major domestic suppliers such as panies such as ABB and Schneider Elec- of the more bankable suppliers, ABB has First Solar and SunPower, which has tric – big multinational suppliers that the edge when competing for the larger cemented its growth across the large- pose a challenge even to an inverter sup- projects because many EPCs are even scale market and helped secure an 18% plier of SMA’s size,” opined Gilligan. more cautious given what happened with share of global revenues for the first half Advanced Energy. “Security of supply of the year. Despite cutting staffing num- ABB: Steady as she goes when completing tight project deadlines bers, SMA has been able to steer its new, The expansion of the Indian solar market is a growing concern, and plays into the streamlined operations successfully – which is on course to surpass 1.5 GW hands of companies like ABB,” Gilligan into high growth areas in the Americas, of new installations this year – has been said. With plenty of expertise following Southeast Asia and Australia, identifying great news for Swiss-headquartered the integration of Power-One, ABB’s abil- emerging markets as Europe continues to power electronics company ABB. Its ity to aid grid maintenance, grid expan- contract. One established and growing inverter division has 50% market share sion and intelligent solutions will ensure market where SMA is still struggling to in India, supplying more than 2 GW of it remains a key player in the evolving gain a foothold, however, is China, where inverter capacity to a market that is some inverter landscape.

58 11 / 2015 | www.pv-magazine.com The new PIKO – ﬂexibility can be even more ﬂexible

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Enphase Energy: micro steps Rising one place in the ranking to fifth, U.S. microinverter supplier Enphase Photo: Omron Photo: Energy has augmented its product offering over the past few months with its highly touted AC Battery and its Home Energy Management system, which comprises monitoring software for the home. These moves have helped the company to achieve impressive growth in 2015. First quarter data published by Enphase showed the company increased its microinverter shipments to 162 MW, a year-on- year increase of 74%, which helped revenues surge by 50% over that time frame. In the first half of 2014 the company had 3.5% of the global market revenues in the inverter sector, and Enphase has improved on that already this year. Omron remains a dominant inverter player in its lucrative domestic market of Japan, but may have to “Enphase has had a phenomenal year step up the intensity of its internationalization plans if it hopes to remain a top five global supplier. in growing its shipments, particularly in Australia, New Zealand, and some of SolarEdge: The rise continues set the company in good stead to enjoy a the stronger European markets such as Last year Israel’s SolarEdge was a new similarly fruitful 2016. France, the U.K. and the Netherlands,” entrant into the top 10, securing 2.7% of said Gilligan. The company is eager to global revenue over the first half of 2014 Omron: A slight fall not be constrained by a single market or with its power optimizers. The company From third place in 2014 to fourth place region, and has taken positive steps to ended 2014 as the 10th largest in terms of midway through this year, Omron has position itself as a provider of intelligent global revenue share, but has surged up enjoyed another steady year, consoli- inverter and monitoring solutions in a the table in 2015, standing third at the dating its position in its home market of number of key markets. end of the first half of the year with an Japan rather than seeking to overreach or impressive 8% of the market. expand into foreign markets. Tabuchi: Falling but diversifying The company’s strength lies in pro- “Omron has been one of the slower sup- Japan’s Tabuchi has fallen two places active marketing, an ability to diversify pliers to internationalize,” said Gilligan. in the top 10 to sixth position. Having geographically, and a product offering “The residential market in Japan is lucra- secured 5% of the global inverter reve- that is both relatively low cost – partic- tive and booming, and Omron has more nue in 2014, the company is now below ularly when compared to many microin- than enough market share there to stay both Enphase Energy and SolarEdge – verter solutions – and high quality. focused on that and remain profitable.” more a victim of the latter two compa- “SolarEdge is active in a lot of markets, The dangers of overreliance on one sin- nies’ impressive growth than anything but it is in the U.S. that the company has gle market remain acute, however, and else. In isolation, Tabuchi is doing a lot been really successful in 2015,” said Gilli- the signs may be on the wall that Omron of things right, including announcing a gan. SolarEdge has partnered with many might have to begin considering expan- recent partnership with U.S. MLPE sup- of the leading solar lease suppliers in the sion sooner rather than later if it wishes to plier Ampt and also developing a storage U.S. residential segment. “Its power opti- remain a top five player globally. In 2014 offering to ensure it is not overly reliant mizers have also tapped into the technical the company had 7% of global revenues, on one product type or particular market. requirements of the U.S. market, includ- but has now been usurped by SolarEdge, “Outside of Japan, Tabuchi is looking at ing having rapid shutdown as a built-in with Enphase Energy hot on its heels for other ways to build brand awareness and feature, which has been rather persuasive that fourth spot. find new avenues to market entry, so for in attracting new prospective customers “IHS would highlight what has hap- the U.S., a storage solution is an attractive to opt for their MLPE solution.” pened in booming markets before, such proposition – as is the partnership with In September the company launched as Germany, Spain and Italy,” cautioned Ampt,” said Gilligan. The appetite for its new HD-Wave technology that it Gilligan. “Exposure to one market can be MLPE solutions is growing all the time claims can perform as well as a typical risky, and with that in mind each of Tabu- in the U.S., so a local U.S. power opti- single-phase inverter but weighs just chi, TMEIC and Yaskawa have expanded mizer provider such as Ampt will assist 9.5 kg and uses 16 times fewer magnetic abroad. For Omron, Europe remains a Tabuchi’s growth strategy in the market. and 2.5 times less cooling components small market and there has not yet been Another avenue into the U.S. will be than a typical inverter. This innovation, much of a push into middle priced mar- in the three-phase string inverter mar- allied to its $125 million initial public kets such as the U.S.” ket, which is projected to be a high- offering (IPO) earlier this year, should growth, long-term segment over the

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next few years, and is also a market where nue share, claiming 5% of the market. Best of the rest the now-absent Advanced Energy was The first six months of 2015 have seen The decision by Advanced Energy to strong. “There may be some opportunity the company slip down to ninth place exit the inverter business in 2015 was the there for Tabuchi,” adds Gilligan. as MLPE providers have increased their starkest indication that a two-tier indus- prominence globally, edging out some of try is emerging. Many of the smaller sup- Schneider Electric: Solid ground the more traditional inverter companies. pliers are either folding or being repur- The more the inverter pack shuffles, the Despite this fall, TMEIC has still been chased to become niche players – serving more entrenched and part of the furni- doing the simple things right. The com- local regions and leaving globalization ture Schneider Electric becomes. In sixth pany posted a 48% year-on-year order to those suppliers that are firmly estab- place in 2014, the French multinational increase earlier this year as its manufac- lished at the top table. “This is the route was the seventh-largest inverter supplier turing hubs in India, the U.S. and China SolarMax has taken,” Gilligan said of the in terms of global revenue share at the bore fruit, augmenting its Japanese facil- Swiss-headquartered inverter supplier midway point of this year, rising from ity. “This is a reasonably straightfor- that went into liquidation at the end of eighth position at the same stage last ward strategy from TMEIC – activity 2014. “Their technology has good brand year thanks to a few big-ticket projects, and investment in the four large global awareness in Switzerland and Germany, including the 300 MW Cestas installa- markets,” said Gilligan. “Having a man- for example, so it makes sense to focus on tion in France. “Schneider Electric ben- ufacturing presence in the regions will those markets alone.” efits from having a global presence and set them in good stead to increase their The European downturn has contin- having an existing brand in plenty of market share.” ued to bedevil suppliers, and was piv- markets,” said Gilligan. “The company In Japan, TMEIC’s central invert- otal in Advanced Energy’s retreat – with has achieved a significant presence in ers have long been something of a cash fewer opportunities in Europe, many India, which will further boost its reve- cow, and the recent acquisition of AEG’s companies targeted the U.S., thus heap- nue. Its main strength remains its abil- business in India has allowed ramp-up ing on further competition in an already ity to be one of the first movers into new in that growing market. There have also crowded space. Somebody had to make markets, providing an integrated inverter been notable successes in the U.S., while way, and that was Advanced Energy. solution that plenty of customers appear China – despite the intense competition “The vacuum their exit left was filled to prefer.” – remains a keen focus for the company. immediately,” Gilligan said. For Kaco, “TMEIC benefits from its bankability,” the demise of European markets forced Huawei: Nimble expansion Gilligan added. “Having a strong balance it to look overseas, and the company has Rising one place from ninth to eighth at sheet and being a major industrial sup- enjoyed progress in South Korea and the midway point of 2015, Chinese tele- plier is beneficial when securing major other southeast Asian markets, while communications company Huawei has large-scale contracts.” Fronius has had success in the U.S. hav- managed to expand upon its globaliza- ing partnered with leading solar lease tion efforts this year after 2014’s exploits. Sungrow: Back in the top 10 companies. S Ian Clover “As an inverter supplier, Huawei benefits Sungrow’s fortunes highlight the bene- Advertisement from the significant brand awareness it fits and the drawbacks of enjoying single enjoys in other parts of its business,” said market dominance. A leader in the Chi- Gilligan. nese market, Sungrow may finish 2015 as ONE Despite its size, Huawei has been nim- the world’s largest inverter supplier in AMBI ble in ensuring it has an early toehold in terms of MW shipped. However, it placed emerging solar markets, building upon 10th in the IHS global revenue ranking FOR A a modest – but growing – presence in precisely because of its reliance on Chi- Europe. The U.S. market remains diffi- nese revenues – which are much lower SECURE FIT cult, however, due to a low-level of brand than in many other countries due to the The AmbiVolt solar mounting systems, like exposure there and a reluctance among low inverter costs across the country. AmbiOne for trapezoidal metal roofs have solar leasing companies to use their sin- Sungrow is keenly aware of this, and been developed in close collaboration gle and three-phase inverters – a reluc- spent much of 2014 expanding into new with installers – to make sure they’re not tance currently shared by leading U.S. territories in southeast Asia and even only safe, but also allow for fast installa- Th tion and high ﬂexibility on the roof. EPCs. the U.S. “ e company is making a huge Nevertheless, Huawei forms one half effort to expand globally, but it does take Make your of China’s ‘Big Two’ with Sungrow, and time to build brand awareness in these installers happy! has eaten into the latter’s dominance of new markets,” notes Gilligan. Finan- the domestic Chinese market – so much cial data from 2014 bear this out. Last so that the company has enjoyed larger year Sungrow shipped 3.8 GW of invert- global revenues than Sungrow so far in ers globally, of which 430 MW were for [email protected] 2015. non-domestic markets. Nevertheless, this +49 (0)89/14 349 073 430 MW accounted for 20% of the com- TMEIC: A smaller share pany’s total revenue last year – a caution- At the end of 2014 Japan’s TMEIC stood ary tale of the need for Chinese suppliers www.ambivolt.com in fourth place in terms of global reve- particularly to pursue global expansion.

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