2010 shows the strengths and the weaknesses of the PV inverter industry

The PV industry, which is still maturing, is still going through wild fluctuations with supply and demand and with an unsteady global market that is showing signs of slowdown for the PV market in 2011 after a strong 2010.

02/16/2011


IMS Research's analysis of the PV inverter market during 2010 allowed a unique perspective of an industry that although characterised by record shipments and revenues, also displayed some fundamental weaknesses of an industry that is still maturing and learning.

As an industry which relies so intrinsically on the sun, it is safe to assume that seasonal variations in demand will be present. Specifically for PV inverter suppliers, generally the first quarter of the year is the quietest as the core markets in Europe remain restricted by the winter snow. However the first quarter of 2010 was very different and IMS Research’s quarterly PV inverter tracker showed that inverter shipments in the first quarter of 2010 were almost 200% up on the same period in 2009. In contrast, suppliers are reporting that so far in 2011 the seasonal lull of Q1 has well and truly returned, showing just how remarkable the beginning of 2010 was.

The surge in demand at the start of 2010, driven by impending cuts to incentives in several of the major European markets created a race amongst PV inverter suppliers to secure components and expand production capacities. Many suppliers were not able to source a steady supply and a shortage of inverters hit the PV industry. Some suppliers were more affected than others and major shifts in market share occurred. SMA Solar Technology lost market share throughout 2010, whilst other such as Power-One were able to ramp up production and make major share gains.

2010’s turbulent summer was characterised by inverter suppliers struggling to meet demand while aggressively expanding production capacity and customers placing the same order with several different suppliers amidst a panic to complete installations before major incentive cuts. Lead times remained painfully long for customers through the first half of the year with “at least 25 weeks” a common response to enquiries for delivery times. Inverter production hit 8 GW in the third quarter of the year, causing the inverter shortage to ease and the true scale of the double ordering to emerge. By the fourth quarter the inverter shortage had quickly transformed into a vast oversupply of inverters with inventory building throughout the supply chain.

A slowdown in the German market in November and December and a complete stoppage of the French market compounded the problems with Italy remaining one of the few buoyant markets in Europe. Although 2010 was an outstanding year for PV inverter suppliers, the huge demand exposed an industry that was ill-prepared for the surge, with component supply problems and capacity limitations. The industry now faces a very bleak first quarter in 2011 as excess inventory fulfils much of the early demand and suppliers now need to deal with the consequences of them over-supplying the market last year.

One market that has largely by-passed the oversupply problem experience in Europe is the US. Two of the largest suppliers, Advanced Energy and Satcon, enjoyed a very successful 2010 and their outlook continues to be positive with massive growth predicted for the North American market in 2011. These suppliers were less exposed to the German market and so have not been so afflicted by the huge inventory problems being experienced in Europe.

The key question facing the industry now is when the excess inventory in the European market will be depleted. With only the Italian market providing major demand so far in 2011 this point seems to be a little way off. The answer is largely dependent again on Germany and if demand will begin to surge again with the pending cuts to the feed in tariff scheduled for July.



No comments
The Top Plant program honors outstanding manufacturing facilities in North America. View the 2013 Top Plant.
The Product of the Year program recognizes products newly released in the manufacturing industries.
The Engineering Leaders Under 40 program identifies and gives recognition to young engineers who...
The true cost of lubrication: Three keys to consider when evaluating oils; Plant Engineering Lubrication Guide; 11 ways to protect bearing assets; Is lubrication part of your KPIs?
Contract maintenance: 5 ways to keep things humming while keeping an eye on costs; Pneumatic systems; Energy monitoring; The sixth 'S' is safety
Transport your data: Supply chain information critical to operational excellence; High-voltage faults; Portable cooling; Safety automation isn't automatic
Case Study Database

Case Study Database

Get more exposure for your case study by uploading it to the Plant Engineering case study database, where end-users can identify relevant solutions and explore what the experts are doing to effectively implement a variety of technology and productivity related projects.

These case studies provide examples of how knowledgeable solution providers have used technology, processes and people to create effective and successful implementations in real-world situations. Case studies can be completed by filling out a simple online form where you can outline the project title, abstract, and full story in 1500 words or less; upload photos, videos and a logo.

Click here to visit the Case Study Database and upload your case study.

Maintaining low data center PUE; Using eco mode in UPS systems; Commissioning electrical and power systems; Exploring dc power distribution alternatives
Synchronizing industrial Ethernet networks; Selecting protocol conversion gateways; Integrating HMIs with PLCs and PACs
Why manufacturers need to see energy in a different light: Current approaches to energy management yield quick savings, but leave plant managers searching for ways of improving on those early gains.

Annual Salary Survey

Participate in the 2013 Salary Survey

In a year when manufacturing continued to lead the economic rebound, it makes sense that plant manager bonuses rebounded. Plant Engineering’s annual Salary Survey shows both wages and bonuses rose in 2012 after a retreat the year before.

Average salary across all job titles for plant floor management rose 3.5% to $95,446, and bonus compensation jumped to $15,162, a 4.2% increase from the 2010 level and double the 2011 total, which showed a sharp drop in bonus.

2012 Salary Survey Analysis

2012 Salary Survey Results

Maintenance and reliability tips and best practices from the maintenance and reliability coaches at Allied Reliability Group.
The One Voice for Manufacturing blog reports on federal public policy issues impacting the manufacturing sector. One Voice is a joint effort by the National Tooling and Machining...
The Society for Maintenance and Reliability Professionals an organization devoted...
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
Maintenance is not optional in manufacturing. It’s a profit center, driving productivity and uptime while reducing overall repair costs.
The Lachance on CMMS blog is about current maintenance topics. Blogger Paul Lachance is president and chief technology officer for Smartware Group.