Worldwide market shipments of solar photovoltaic (PV) inverters declined 5% on year in the second quarter - the first such decrease since the third quarter of 2011 - as demand fell in key Europe countries, according to IMS Research.
PV inverter shipments in the second quarter of 2013 amounted to 8.3GW, down 5% from 8.7GW during the same period in 2012.
The main culprit for the decrease in PV inverter shipments worldwide was the sharp slowdown in the Europe market. Shipments in the Europe, Middle East and Africa (EMEA) region during the first half of 2013 fell more than 40% compared to the first half of 2012. The EMEA region accounted for only 6GW worth of shipments in the first half of 2013, down from 10GW during the same period in 2012, said IMS Research.
"The pace of contraction for inverter shipments in critical Europe countries such as Germany and Italy has been faster than expected, with some of these markets seeing their demand decline by more than 70% in 2013," said Cormac Gilligan, senior PV market analyst at IHS. "Some inverter suppliers have been very reliant on these historically large markets. Because of this, inverter suppliers are seeking new markets and have expanded their presence internationally in high-growth countries, including the US, China, Japan and India."
Golden Sun heats up China's inverter market
Despite the annual decrease, shipments grew on a sequential basis, rising by 24% in the second quarter compared to the first quarter. The large growth in on-quarter shipments was largely accounted for by China, where inverter shipments increased by 174% in the second quarter of 2013 to reach almost 2GW. The surge was powered by a rush to complete projects aided by China's Golden Sun program.
"Although China's inverter shipments nearly tripled during the second quarter of 2013, the country's inverter market is still dominated by domestic suppliers," Gilligan added. "China remains a challenging market for western suppliers to penetrate despite its size. Average inverter prices have decreased by 14% in the second quarter of 2013 to reach as low as US$0.07 per watt, which means that inverter suppliers really need a local presence in order to have competitive pricing in this market."
Inverter revenues on the wane
Average global inverter prices continued to decline, dropping by 10% in the second quarter of 2013 compared to the first quarter. This decline was the result of inverter shipments shifting to lower-cost markets in Asia and continued price erosion in mature solar markets. Revenue decreased by 18% on year in the second quarter of 2013 to US$1.6 billion.
In Europe inverter revenue fell by more than 50% in the second quarter of 2013, with markets such as Germany and Italy suffering revenue declines of more than 60%.
Second-half rally
Inverter shipments will increase in the second half of the 2013 to reach more than 34.5 GW for the full year, IMS Research predicts.
However, the majority of inverter demand is forecast to come from the Americas and Asia, which will continue to put further pressure on inverter suppliers that do not have a strong presence in these markets.
