GTM Research expects the market for microinverters and DC optimizers to exceed 5 gigawatts by 2017, up from 1.1 gigawatts in 2013. According to the report, 2014 marks a transition year as the MLPE category ends its first chapter.
Microinverters and DC optimizers (collectively known as module-level power electronics, or MLPE) comprise one of the newest and fastest-growing sectors in the solar industry. As we reported last year, Navigant Research expects revenue from the sector to grow from $308 million in 2013 to more than $1.9 billion in 2020.
In a new report, The Microinverter and DC Optimizer Landscape 2014: The Evolution from Market Niche to Market Success, GTM Research forecasts global microinverter and DC optimizer shipments to surpass 5 gigawatts by 2017, up from 1.1 gigawatts in 2013.
According to the report, 2014 marks a transition year as the MLPE category ends its first chapter. Dozens of startups entered the market with promises of increasing energy yield, improving system reliability, and providing granular monitoring. The end of 2013 found many of these companies going dormant or bankrupt, with some undergoing significant restructuring. Three leaders in the area emerged; Enphase Energy, SolarEdge Technologies led the way, with Tigo Energy a distant third. These three companies accounted for 88% of capacity shipped in 2013.
According to GTM Research, in the new chapter of MLPE, the incumbent firms are trying to evolve beyond their initial base demand so they can stay ahead of a new group of well-funded competitors. The product value propositions are shifting to an entirely new set of more nuanced – and more valuable – areas, including installer operational throughput, design flexibility, and cost reduction in labor and electrical balance of systems.
“The companies of four years ago would not recognize the companies of today,” said report author Paul Grana. “It isn’t just that costs have come down dramatically – though that is true. But more importantly, the companies of today sell a broader and much more compelling value proposition. And that is why the sector has grown from a small niche to shipping more than a gigawatt per year.”
Another change the report calls out is that fully integrated AC modules and smart modules are finally entering the market. These products, GTM Research says, represent a dramatic strategic shift, with major module manufacturers becoming players in the MLPE sector. Those who succeed at selling these value-added products will be the winners in the MLPE category over the next five years.
According to MJ Shiao, Director of Solar Research at GTM Research, “As the global industry focuses on balance of system costs, microinverters and DC optimizers represent a large, relatively untapped opportunity for installers and investors to reduce overall PV system and operational costs. We see shipments increasing fivefold and revenues from MLPE sales more than doubling by 2017 as markets like the U.S., UK, Germany, and Australia continue to embrace and expand use of microinverters and DC optimizers.”