In terms of demand, global photovoltaic installed capacity demand has increased, and the inverter market has benefited from an increase.
First, the strong demand for overseas photovoltaics superimposes the approaching era of China's parity, and global new photovoltaic installations continue to increase. With the increasingly prominent economic advantages of photovoltaic power generation, overseas market demand has exploded. We expect that from 2020 to 2022, the global PV new installed capacity will reach 120GW, 160GW and 180GW respectively.
China's photovoltaic parity era is approaching, and the future installed capacity will maintain steady growth. It is estimated that in 2020, China's newly installed photovoltaic capacity is expected to reach 40GW; in the coming years, the new installed capacity will remain above 50GW, and the total new installed capacity of China's photovoltaic capacity is expected to reach 300GW in 2021-2025.
Second, the demand for “addition + replacement” will promote the expansion of the inverter market. The global market size is expected to reach 50.5 billion yuan in 2025. The continuous growth of global photovoltaic installations has led to an increase in the demand for new inverters. At the same time, the average service life of inverters is 10-15 years, which brings certain replacement demand. The new demand for photovoltaic inverters is calculated according to the 1.2:1 over-match ratio of photovoltaic inverters. At the same time, assuming that the newly installed photovoltaic capacity 10 years ago is the replacement demand for that year, Hay Think estimates the global photovoltaic inverter shipments in 2020-2022 It is expected to reach 160GW, 222GW, and 243GW respectively, and the market size is expected to reach 32.6 billion yuan, 40.5 billion yuan, and 43.3 billion yuan respectively. In 2025, the global inverter market space is expected to reach 50.5 billion yuan.
On the supply side, the industry concentration remains high, and Chinese companies are focusing on overseas markets; the drop in raw material prices and the factors of corporate scaled production are superimposed, pushing production costs down, and industry profitability is expected to further improve.
First, the concentration of the photovoltaic inverter industry remains high. In 2013, the CR10 of the global photovoltaic inverter industry was only 55%. The main reason was that traditional manufacturers such as Siemens had withdrawn from the photovoltaic inverter market, new entrants emerged in large numbers, the industry was updated and the competition became fierce. After the previous industry reshuffle, the advantages of leading enterprises gradually became apparent and the industry concentration continued to increase. In 2016, industry CR10 increased to 78%; since then, industry concentration has remained high. From 2017 to 2019, CR10 reached 77%, 75%, and 76%, respectively, maintaining a relatively high level for a long time.
Second, Chinese companies have deployed overseas business one after another, and market share in market segments is outstanding. Benefiting from the continuous growth of newly installed capacity, overseas inverter demand continues to increase. Chinese inverter manufacturers have quickly entered the local photovoltaic terminal market by building overseas production bases. In 2018, Sungrow Power and Shangneng Electric successively announced the official commissioning of their 3GW capacity photovoltaic inverter production base in India, helping the two companies quickly gain market share in India. Chinese companies are actively expanding overseas business and are leading the way in the market share of each market segment. In market segments other than the United States, Huawei's inverter shipments rank first; in India and Asia-Pacific market segments, Chinese companies occupy 7-8 seats in the TOP10, respectively.
Third, the production costs are falling, and the profitability of the industry is expected to continue to pick up. Raw materials account for more than 90% of inverter production costs, of which electronic components account for 80%. Electronic component materials other than IGBTs have basically been domestically produced, and procurement costs have been gradually reduced. The expansion of the production scale of enterprises has led to a further drop in unit power costs. The superposition of two major factors drives down the cost of inverter production. In 2019, the demand for new downstream photovoltaic installations rebounded, and the overall gross profit margin of the inverter industry also bottomed out, reaching 33.58%. It is expected that as the global demand for photovoltaic installations increases in the future, and the advantage of lower production costs is added, the overall profitability of the photovoltaic inverter industry is expected to continue to rise.
In terms of technology, various types of inverter technology have come to the fore. The integration of optical storage and intelligentization are the two major technological trends of the future industry.
First, the 1500V era has begun, and the supporting layout of centralized inverters has been accelerated. The 1500V system has significant advantages in large-scale centralized power station projects. It is expected that the market share will benefit from the centralized power station and continue to grow. In the next two years, it is expected to exceed the 1000V system, reaching more than 60%. Beginning in 2015, a number of domestic manufacturers such as Huawei, Sungrow, Sunneng Electric, and Kehua Hengsheng have successively launched 1500V photovoltaic inverter products; overseas companies such as SMA, GE, and PE have also increased their 1500V inverter products.
Second, the stand-alone power of string inverters has gradually increased, and market applications have continued to penetrate. With the increase in the scale of distributed power stations and the increase in power module technology, the power of string-type single units has gradually increased. While ensuring the advantages of multiple MPPTs, high-power string inverters gradually move their overall power closer to centralized inverters, promoting their application space in centralized power stations.
Third, integration of optical storage and intelligence is the overall trend of the industry in the future. The integrated solar-storage inverter is adapted to the solar-storage system, effectively improving the utilization rate of power generation. During the peak period of power consumption during the day, the photovoltaic modules connect the DC power generated by the inverter to the AC power and merge it into the power grid; during the low power consumption period at night, the power grid will charge the energy storage battery through the inverter charge and discharge controller. ; During periods of insufficient sunlight or peak power consumption at night, the energy storage battery converts the electrical energy into AC power through the inverter again for the load to use.