Solar PV power generating systems are environmentally friendly and inexhaustible. They have proven to be a lucrative option for energy production throughout the European Union, the Americas, and Asia-Pacific. The numerous benefits of solar PV, such as effectiveness to sustainability, a decrease in ecological footprint, and low-cost power generation, are likely to drive the technology market in the following years. Rising demand for renewable energy due to increased power usage and lower renewable power generation costs will likely cause a market expansion in the coming years.
According to the United Nations, the world's population will be 7.8 billion in 2020, with around 1 billion people without electricity access. The world population is expected to reach 8.6 billion by 2030, increasing the energy demand even more. To meet the need for electricity and raise awareness about alternative energy sources, the electricity sector has shifted its focus to large-scale integration of renewable energy generation.
Renewable power generation has grown incredibly over the last decade, consistently exceeding assumptions, with significant yearly records and an increasing number of firms investing in their energy transitions. The shifting consumer desire for a sustainable built environment, ambitious government targets, and sufficient planning and policies have driven much progress in renewable energy.
The ASEAN Plan of Action for Energy Cooperation held in 2016 announced a target to achieve 23% power generation through renewable energy sources by 2025. Governments in the Asia Pacific are likely to promote the renewable energy sector by providing preferable tariffs and tax benefits. These factors are expected to drive the market for PV inverters during the forecast period.
The supply chain of PV inverter systems was majorly affected due to the shutdown of production facilities, especially in China, which was the epicenter of the pandemic, and one of the worst affected regions. The manufacturing of most devices in the energy and power sector experienced a considerable slowdown. Additionally, the local and international travel restrictions, quarantine requirements, and lockdowns further delayed shipments of manufactured parts that were in the process of delivery. Installers and system providers usually hold stock of equipment in inventory. However, manufacturers faced bottlenecks and shortages owing to limited production in countries severely affected by COVID-19.
COVID-19 resulted in a halt of new construction activities around the globe owing to the lockdown, reducing the demand for solar power system installation in residential and commercial applications since these systems are preferred in new construction for captive consumption of power and to reduce the carbon footprint of buildings. Further, demand from prospective residential and commercial customers is expected to be on the lower side owing to funds being diverted to combat the pandemic.
COVID-19 hampered the international market for PV inverters due to supply chain risks, causing delays for existing sites. Furthermore, demand for PV inverters from business and residential end-users has decreased due to constrained new construction activities and redirecting of available finances by residential and commercial end-users to survive during the COVID-19 outbreak.
Nonetheless, governments in some major nations, like the United States, Germany, and India, have taken measures to prolong the deadline for new and underdeveloped solar power plants to qualify for subsidies and tax credits. Due to the supportive measures adopted by the government, the influence of COVID-19 on the PV inverter industry is likely to be moderate, increasing demand for PV inverters shortly.
Asia-Pacific is expected to account for the largest market share in the regional market, accounting for USD 8,986 million at a CAGR of 8.02% by 2030. China is the major contributor to Asia-Pacific’s rapid growth in the PV inverter market. A growing number of solar installations in the region’s developing nations have also significantly contributed to the development of the Asia-Pacific solar PV inverter market.
North America accounts for the second-largest position in the regional market, with the US being the major revenue generator. North America is expected to reach USD 3,862 million at a CAGR of 5.25% by 2030. The US is among the early adopters of clean energy solutions in the world for power generation and others. This can be attributed to the increased importance of clean energy solutions as per the energy act introduced by the US government. Moreover, relevant policies and regulations have been established based on these acts to cater to different aspects of distinct sectors such as power generation.