Trade Resources Industry Views PV Inverter Service Plans and Extended Warranties Is Forecast to Grow by 110%

PV Inverter Service Plans and Extended Warranties Is Forecast to Grow by 110%

The market for photovoltaic (PV) inverter service plans and extended warranties is forecast to grow by 110% between 2012-2017, according to IHS. Despite PV inverter hardware profit margins being squeezed, the after-sales service market is forecast to more than double by 2017 to reach US$1.7 billion, providing suppliers with a valuable additional profit source.

The analysis revealed that one of the key drivers of this growth will be demand for utility-scale installations which is forecast to be one of the fastest growing segments over the next five years. These systems will typically use large three-phase inverters which will often be purchased with an annual service plan to ensure optimal operation. In 2012, 26% of high power three-phase inverters were sold with a service plan attached, and this is forecast to increase to 34% by 2017. In many cases, banks and finance providers will specify that inverter service plans are required as a condition of the loan in order to ensure that solar installations operate efficiently and that inverter downtime is minimized.

Although the PV inverter after-sales service market will present revenue growth opportunities, a variety of challenges exist for suppliers, including coping with the solar market becoming more geographically fragmented.

"Along with local legislation stipulating varying minimum warranty lengths in different countries, suppliers will have to establish service offices in new emerging markets in order to provide customers with the adequate response times and minimum levels of after-sales service," explained Cormac Gilligan, PV analyst at IHS. "Industrial inverter manufacturers that are not solely focused on solar may initially be best placed to offer after-sales service in new solar markets, as they often have existing operations established in these regions to serve other industries, whereas pure-play PV inverter manufacturer may have to use third party service partners until they can establish a local service center in these new emerging markets."

In order for inverter suppliers to promote their after-sales service and distinguish themselves from the competition, they are developing different approaches and strategies for marketing and providing service plans and extended warranties. As inverter suppliers are under increasing pressure to decrease their inverter hardware prices and as new competing technologies such as microinverters with longer standard warranty lengths are shipped in greater numbers, some inverter suppliers are offering longer standard warranties at no extra charge and some central inverter manufacturers are offering to provide full solar PV power plant operations and maintenance.

Source: http://www.digitimes.com/news/a20130222PR200.html
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PV Inverter After-Sales Service Market to Double by 2017, Says IHS