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Solar Inverter Industry undergoes Consolidation with big bang Acquisitions

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Consolidation in the Solar Inverter Industry

The Solar Industry is becoming much more fragmented with the rise of the Japanese and Chinese markets. Top solar inverter Solar Invertercompanies used to be European, as almost 80% of the global solar demand used to come from Europe. However, that is changing with Japan and China set to become the two largest markets in 2013. Note these countries are protectionist in nature and their domestic companies enjoy both explicit and implicit advantages over foreign companies.

SMA Solar which is the world’s largest inverter company has seen its market share erode, as it could not get a foothold in the Chinese market (will be about 30% of the global market in 2013). SMA has been facing declining profits due to the sharp fall in solar inverter prices and increasing competition. The company was forced to buy a Chinese solar inverter company Zeversolar to defend its solar inverter market share.

ABB the Swiss automation giant bought Power-One for a big premium as it looked to fight with General Electric (GE) and Schneider in the growing $7 billion solar inverter industry. ABB has never been a big renewable energy player and this acquisition catapults into the 2nd position in the global solar inverter market with a ~10% market share. ABB’s huge scale and strength should help Power-One get access to more markets. The increasing global nature of the solar market is forcing companies to acquire others in order to access more countries and increase their product line.

ABB buys Power-One for $1 billion

ABB management confirmed that the boards of both companies had agreed to the acquisition of Power-One by ABB at $6.35 per share in cash, a deal which includes Power-One’s net cash of $266 million. Subject to shareholder and regulatory approvals, the transaction is expected to close in the second half of 2013. This is a great acquisition for the electrical and automation giant ABB in my view as Power-One had a ~12% market share of the global solar inverter market. The solar inverter industry has not been hurt as much as the solar panel industry. Though the profits have gone down substantially, most solar inverter companies like SMA Solar and Solectria are expected to survive this brutal downturn. Schneider had bought the Canadian solar inverter player Xantrex a few years ago. I thought the price paid by ABB for Power-One was quite cheap, despite the substantial premium to the current PWER stock price. ABB’s competitors like GE and Schneider have a much bigger presence in the growing solar inverter market. ABB had not been able to grow its solar inverter business and did not rank among the top solar inverter suppliers.

Advanced Energy Industries (AEIS) was forced to buy German Refusol to gain access to the European market where it was weak. It will also help AEIS target the commercial and rooftop markets, as it mainly made inverters for the utility segment. Note AEIS and Enpahse Energy (ENPH) have gained market share in 2012 as the American solar market has doubled. However, these companies cannot ignore the Asian market which will provide most of the growth in the future. I expect that more acquisitions will be seen in the solar inverter industry as small players have vital technology and sales networks.


A top executive from Advanced Energy Industries today admitted the company would have risked relegation to the second tier of inverter companies without its recent acquisition of Refusol, a leading European inverter manufacturer. “We had customers that were looking at us as potentially a second tier supplier because we weren’t able to deal with them on a global basis. In a globalising industry like solar where EPCs are looking at markets in South Africa and India, you have to be able to deal with that customer wherever they go. The acquisition was a way of accelerating our progress.”

Last month AEI announced its $76.6m acquisition of Refusol, one of Europe’s top three inverter companies that had seen growth of around 150% over the past three years. Two weeks later, ABB acquired Power-One and SMA acquired a majority stake in Zeversolar.Tredger said AEI had now positioned itself as one of the top three inverter companies globally alongside ABB & SMA as the sector appears to undergo consolidation.


Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

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