Huawei becomes 2nd largest solar inverter supplier

Like solar panels, Chinese manufacturers have crashed the pricing of solar inverters too through large increases in capacity and reduction in process and raw material costs. Solar inverter prices decreased by almost 20% in China last year, as fierce competition for market share drove down solar inverter prices. As per Digitimes, many of the smaller players have left the field unable to compete in prices with the big boys.

Huawei has been the outstanding story becoming the 2^nd largest supplier in the Chinese market after Sungrow. Huawei utilizing its experience and scale in electronics and telecom manufacturing entered the ranks of the world’s top 10 inverter suppliers. It has invested heavily into the solar inverter business through marketing and sales campaigns. Sungrow which is a pure play solar inverter focused company is facing a tough time in keeping its No.1 tag.

All this has been bad news for the dominant European companies which have seen their revenues and margins get decimated by the Chinese entry into the business. Solar inverter prices have declined steeply in the last few years falling by about 60%. SMA Solar which used to be the No.1 company with enviable margins and a couple of billion revenues, has seen continuous declines. I don’t think it will be possible for SMA Solar to retain its position. The company does not have any big strength in technology or marketing to be able to compete with the Chinese who can live with very low margins and are extremely aggressive.

IHS

The overall global PV inverter market shrank more than 4 percent in 2014 to reach $6.6 billion, as intense price competition continued and demand shifted further toward lower-priced markets. Market leader SMA continued to lose share in 2014, and the company’s market share is now half of what it was in 2012 and 25 percentage points lower than in 2009. Despite remaining the largest supplier globally, SMA has lost market share for five consecutive years.

Rank			Change
2013	2014	Company Name	13-14
1	1	SMA Solar Technology	-3.2%
2	2	ABB	-0.8%
3	3	Omron	+0.9%
4	4	TMEIC	+1.0%
7	5	Tabuchi	+1.2%

“Due to global demand shifting toward Asian markets, if suppliers maintained their current market share in each country this year, it is possible that we would see a new global market leader,” said Cormac Gilligan, senior analyst, solar supply chain, IHS. “In fact, for the first time on record, SMA could be displaced as the leading PV inverter supplier, if not in terms of revenue, then quite possibly in terms of MW shipments.”

Because of the seismic demand shift toward Asia, Chinese suppliers experienced a big gain in megawatt (MW) shipment market share; however, those gains did not translate into increases in global revenue share. Average prices in China averaged $0.07 per watt (W) in 2014 compared to $0.16/W globally, which has slowed Chinese vendors’ revenue share gains.