Inverter Market Research Report Information By Type (Solar inverter, Vehicle inverter, and Others), By Output Power Rating (Below 10 kW, 10-50 kW, 51-100 kW, and Above 100 kW), By End User (Residential, Photovoltaic (PV) Plants, Automotive, and Others), By Connection Type (Standalone, and Grid-tied), By Output Voltage (100-300 V, 301-500 V, and Above 500 V), By Sales Channel (Direct and Indirect) And By Region (North America, Europe, Asia-Pacific, And Rest of The World) –Market Forecast Till 2032

Global Inverter Market Overview

Inverter Market Size was valued at USD 16.9 Billion in 2023. The Inverter Market industry is projected to grow from USD 19.6 Billion in 2024 to USD 56.56 Billion by 2032, exhibiting a compound annual growth rate (CAGR) of 16.30% during the forecast period (2024 - 2032). The increasing investments in renewable energy projects, rising demand for residential solar systems, and the need for advanced power backup solutions in the commercial sector are expected to be significant market drivers for the Inverter Market.

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Inverter Market Trends

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  Increasing investments in the renewable energy sector and the growing automotive sector are driving the market growth

  
  

Market CAGR for inverters is being driven by the increasing investments in the renewable energy sector and the growing automotive sector. Developed and emerging economies such as the US, Japan, India, and China are overhauling their energy policies to prioritize a significant portion of their energy generation from renewable sources like wind and solar. Government financial support aimed at promoting clean energy and its associated returns has spurred increasing investments in the global renewable energy sector. Renewable sources have now become the preferred choice for expanding, upgrading, and modernizing power systems worldwide. 

According to the International Energy Agency, investments in the energy sector are expected to reach USD 2.8 trillion in 2022, with a projected decrease to USD 2.4 trillion in 2023. Of this, over USD 1.7 trillion is earmarked for renewable power, nuclear energy, grids, storage, low-emission fuels, efficiency improvements, and end-use renewables and electrification. The power sector has particularly witnessed notable investment growth, driven primarily by renewables and grid infrastructure.

Clean energy investment surpassed USD 1.4 trillion by 2022, constituting nearly three-quarters of overall energy investment growth. In the five years following the signing of the Paris Agreement in 2015, the yearly average growth rate in clean energy investment was just over 2%. However, since 2020, this rate has increased to 12%, although it falls short of meeting international climate objectives. Notably, China led in clean energy investment in 2021 with USD 380 billion, followed by the European Union with USD 260 billion and the US with USD 215 billion.

The automotive industry is witnessing a notable increase in the adoption of electric and hybrid vehicles, leading to the demand for power inverters to convert DC power from batteries into AC power for driving motors. In the fiscal year 2022-23, the total export of automobiles reached 4,761,487 units, with two-wheelers accounting for approximately 77% of the total exports. From April 2022 to March 2023, passenger vehicle exports surged from 577,875 to 662,891 units, marking a positive growth of 14.7%. 

India contributes 40% of the total $31 billion global engineering and R&D expenditure, with 8% of the country's R&D spending allocated to the automotive sector. The increasing global demand for electric vehicles serves as a significant driver fueling the growth of the power inverter market. As a result, it is anticipated that throughout the projection period, demand for the Inverter Market will increase investments in the renewable energy sector and the growing automotive sector, driving the Inverter Market revenue.

Inverter Market Segment Insights

Inverter Market Output Power Rating Insights

The Inverter Market segmentation, based on Output Power Rating, includes Below 10 kW, 10-50 kW, 51-100 kW, and Above 100 kW. The 51-100 kW segment dominated the market, accounting for 58% of market revenue. A global shift towards renewable energy sources, fueled by environmental concerns and energy security considerations, is propelling the adoption of solar power systems. In line with this transition, businesses are turning to solar energy to diminish reliance on fossil fuels and address climate change, thereby bolstering the demand for inverters in the 51-100 kW range.

Figure 1: Inverter Market, by Output Power Rating, 2023 & 2032 (USD Billion)

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Inverter Market End User Insights

The Inverter Market segmentation, based on End User, includes Residential, Photovoltaic (PV) Plants, Automotive, and Others. The Residential segment dominated the market, accounting for 58% of market revenue. To encourage the adoption of solar energy among homeowners, various government incentives, including tax credits, rebates, and net metering programs, are available. In India, a solar subsidy program has been implemented to promote solar usage in residential settings. 

This program aims to alleviate the financial burden associated with installing solar panels by offering financial aid to consumers. Under this initiative, solar energy systems with a capacity of up to 2 kW are eligible for a subsidy of up to ₹30,000 per kW. Additionally, consumers can avail themselves of a subsidy of ₹78,000 for systems with a capacity of 3 kW. With these subsidies, residential consumers can potentially save up to 60% of their installation costs. Such incentives play a crucial role in making solar power more accessible and affordable for homeowners, thereby driving up the demand for inverters.

Inverter Market Type Insights

The Inverter Market segmentation, based on Type, includes Solar inverter, Vehicle inverter, and Others. The Solar inverter segment dominated the market, accounting for 60% of market revenue. The growing necessity for grid modernization and the shift towards decentralized energy systems are key drivers of the demand for solar inverters. Solar installations, especially residential and commercial rooftop systems, empower consumers to generate their electricity and potentially sell surplus power back to the grid. Advanced inverters equipped with grid-support features facilitate the seamless integration of distributed solar resources, thereby improving grid stability and reliability.

Inverter Market Output Voltage Insights

The Inverter Market segmentation, based on Output Voltage, includes 100-300 V, 301-500 V, and Above 500 V. The Above 500 V segment dominated the market, accounting for 60% of market revenue. Systems operating at higher voltages offer the advantage of greater power output from solar installations. This feature is especially beneficial for utility-scale projects seeking to optimize energy generation and capitalize on economies of scale. High-voltage inverters facilitate the connection of additional solar panels in series, thereby elevating the overall system voltage and power capacity. As solar developers pursue projects with increased capacities to address escalating energy needs, the demand for high-voltage inverters capable of managing higher power levels experiences a corresponding increase.

Inverter Market Connection Type Insights

The Inverter Market segmentation, based on Connection Type, includes Standalone and Grid-tied. The Grid-tied segment dominated the market, accounting for 60% of market revenue. Ensuring grid stability and reliability, grid-tied inverters play a vital role by effectively synchronizing solar energy with the utility grid's voltage and frequency. With utilities aiming to incorporate higher proportions of renewable energy into their grids, grid-tied inverters become essential for managing fluctuations in solar power output and upholding grid stability.

Inverter Market Sales Channel Insights

The Inverter Market segmentation, based on Sales Channel, includes Direct and Indirect. The Direct segment dominated the market, accounting for 60% of market revenue. By bypassing traditional distribution channels, direct sale channels have the potential to provide cost efficiencies for customers. Manufacturers might extend competitive pricing, promotional offers, or discounts through their direct sales channels, enabling customers to procure premium-quality inverters at reduced prices compared to intermediary purchases.

Inverter Market Regional Insights

By region, the study provides market insights into North America, Europe, Asia-Pacific, and Rest of the World. The anticipated expansion of the Inverter market in North America can be attributed to several key factors. As the utilization of renewable energy sources for electricity generation continues to rise, the North American power inverter market is witnessing significant expansion. In 2022, annual renewable energy generation in the United States exceeded that of coal for the first time in history. 

Projections indicate that by 2025, domestic solar energy generation will increase by 75%, while wind energy generation will see an 11% increase. By 2050, renewable energies are forecasted to account for over 42% of the country’s electricity generation, compared to the current 20%. Both government and private sector entities have escalated their investments in the construction of solar and wind power facilities in response to the urgent need to reduce carbon emissions and comply with stringent energy conservation regulations. Notably, the United States installed 1,104 MW of distributed wind capacity between 2003 and 2022, with an additional 29.5 MW added across 13 states in 2022 alone. Furthermore, the growing public awareness of solar energy has led to increased investment in domestic solar power generation initiatives.

Further, the major countries studied in the market report are the US, Canada, Germany, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Figure 2: Inverter Market Share By Region 2023 (Usd Billion)

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Europe Inverter Market accounts for the second-largest market share in Europe. The rising demand for inverters is attributed to intensified efforts to mitigate CO2 emissions and shift towards alternative energy sources. As per the latest ‘Trends and Projections’ report by the European Environment Agency, greenhouse gas emissions in the European Union experienced a 2% decline in 2022 compared to the previous year. Official data reveals a notable reduction of methane emissions by 36% in the EU in 2020 compared to 1990 levels. 

The most significant reductions in emissions were observed in the energy supply sector, encompassing energy industries and fugitive emissions, with a decline of 65%, followed by the waste sector, with a decrease of 37%, and the agriculture sector, with a reduction of 21%. Additionally, government initiatives supporting electric vehicle (EV) manufacturers and the availability of commercially viable technologies in the region have spurred increased demand for electric cars, consequently bolstering market growth. Further, the German Inverter Market held the largest market share, and the UK Inverter Market was the fastest-growing market in the European region

The Asia-Pacific Inverter Market is expected to grow at the fastest CAGR from 2024 to 2032. The Asia Pacific region stands as a prominent market for inverters, driven by the increasing adoption of renewable energy systems and the escalating electricity demand in emerging economies. The electricity generation target for the year 2023-24 has been set at 1750 Billion Units (BU), reflecting a growth of approximately 7.2% over the actual generation of 1624.158 BU recorded in the previous year (2022-23). Notably, the generation during 2022-23 increased to 1624.158 BU from 1491.859 BU generated in 2021-22, marking a growth rate of about 8.87%. 

Furthermore, favorable government initiatives aimed at promoting renewable energy sources and facilitating the integration of solar power systems with inverters have further propelled the market in the region. According to the Indian Brand Equity Foundation (IBEF), the Union Budget 2022-23 allocated Rs. 19,500 crore (US$ 2.57 billion) for a Production Linked Incentive (PLI) scheme to enhance the manufacturing of high-efficiency solar modules. Additionally, in Budget 2023-24, a central sector support of US $1.02 billion (Rs. 8,300 crores) was announced for the Interstate Transmission System (ISTS) infrastructure to facilitate the generation of 13 GW of renewable energy from Ladakh. Moreover, China’s Inverter Market held the largest market share, and the Indian Inverter Market was the fastest-growing market in the Asia-Pacific region.

Inverter Key Market Players & Competitive Insights

Leading market players are investing heavily in research and development to expand their product lines, which will help the Inverter market, grow even more. Market participants are also undertaking a variety of strategic activities to expand their global footprint, with important market developments including new product launches, contractual agreements, mergers and acquisitions, higher investments, and collaboration with other organizations. To expand and survive in a more competitive and rising market climate, the Inverter industry must offer cost-effective items.

Manufacturing locally to minimize operational costs is one of the key business tactics used by manufacturers in the global Inverter industry to benefit clients and increase the market sector. In recent years, the Inverter industry has offered some of the most significant advantages to the renewable energy sector and industrial automation. Major players in the Inverter Market, including Huawei Technologies Co., Ltd. (China), SUNGROW (China), SMA Solar Technology AG (Germany), Power Electronics S.L. (Spain), Fimer Group (Italy), SolarEdge (Israel), Fronius International GmbH (Austria), Altenergy Power System Inc., (US), Enphase Energy (US), DARFON (China) are attempting to increase market demand by investing in research and development operations.

Sungrow is a leading renewable energy company specializing in the manufacturing of power supply equipment for solar PV and wind power projects. Their product portfolio includes PV inverters, floating systems, storage systems, and related accessories. Additionally, Sungrow offers a range of services, including construction, development, and operation management services, as well as microgrid storage solutions, grid support storage solutions, and residential storage solutions. 

Their products are utilized in solar energy photovoltaic power stations, solar energy photovoltaic generation systems for buildings, and wind power generation plants. Headquartered in Hefei, Anhui, China, Sungrow focuses on providing innovative solutions for sustainable energy generation. In July 2023, Sungrow entered into a framework agreement with Sonnedix, an international renewable energy manufacturer, to supply inverter solutions for 750 MWp PV projects. As part of the agreement, Sungrow will deliver string inverters, central inverters, and medium-voltage stations to Sonnedix, while also providing professional services such as personnel training to support Sonnedix's expansion plans in Europe.

SMA Solar Technology AG (SMA) is a prominent player in the renewable energy equipment sector. The company specializes in the development, production, and distribution of photovoltaic inverters, choke coils, transformers, and monitoring and energy management systems for PV systems. Additionally, SMA offers intelligent energy management systems, digital services, and solar power plant operation and maintenance services. With a global presence spanning South America, Asia Pacific, North America, Europe, the Middle East, and Africa, SMA is committed to advancing sustainable energy solutions. Its research and development efforts are focused on creating comprehensive system solutions and innovative digital business models. 

SMA operates production facilities in Germany and China, along with an electromagnetic components center in Poland. Headquartered in Niestetal, Hessen, Germany, SMA remains at the forefront of innovation in the renewable energy industry. In April 2022, the company introduced a new line of four inverters with rated outputs of 12kW, 15kW, 20kW, and 25kW, designed for use in PV rooftop systems up to 135kW. These inverters ensure grid-compliant power control for the entire system, accommodating PV generators up to 150% larger than conventional systems. This product launch further strengthens SMA's diverse product portfolio.

Key companies in the Inverter Market include

• Huawei Technologies Co., Ltd. (China)


• SUNGROW (China)


• SMA Solar Technology AG (Germany)


• Power Electronics S.L. (Spain)


• Fimer Group (Italy)


• SolarEdge (Israel)


• Fronius International GmbH (Austria)


• Altenergy Power System Inc., (US)


• Enphase Energy (US)


• DARFON (China)

Inverter Industry Developments

November 2023:Enphase Energy started the shipment of IQ8P Microinverters, boasting a peak output AC power of 480 W, to Mexico to support the latest high-powered solar modules. Additionally, the company initiated commercial production of IQ8 Microinverters in North America, Europe, and Romania.

October 2023:At REI 2023, SUNGROW demonstrated its complete range of renewable energy solutions and unveiled new products in India. With India's energy transformation at a critical juncture, SUNGROW's innovative products and solutions are poised to enhance the country's energy infrastructure and promote the adoption of efficient, safe, and clean energy sources.

Inverter Market Segmentation

Inverter Market Output Power Rating Outlook

• Below 10 kW


• 10-50 kW


• 51-100 kW


• Above 100 kW

Inverter Market End User Outlook

• Residential


• Photovoltaic (PV) Plants


• Automotive


• Others

Inverter Market Type Outlook

• Solar inverter


• Vehicle inverter


• Others

Inverter Market Output Voltage Outlook

• 100-300 V


• 301-500 V


• Above 500 V

Inverter Market Connection Type Outlook

• Standalone


• Grid-tied

Inverter Market Sales Channel Outlook

• Direct


• Indirect

Inverter Market Regional Outlook

• North America
  
  
  
  • US
  
  
  • Canada
  
  
  
  


• Europe
  
  
  
  • Germany
  
  
  • France
  
  
  • UK
  
  
  • Italy
  
  
  • Spain
  
  
  • Rest of Europe
  
  
  
  


• Asia-Pacific
  
  
  
  • China
  
  
  • Japan
  
  
  • India
  
  
  • Australia
  
  
  • South Korea
  
  
  • Rest of Asia-Pacific
  
  
  
  


• Rest of the World
  
  
  
  • Middle East
  
  
  • Africa
  
  
  • Latin America