SMA Solar: Dominant Force in the PV Inverter Market

By Eric Wesoff

While Suntech (STP), Kyocera (KYO), Sharp (SHCAY.PK), Samsung, First Solar (FSLR), SunPower (SPWRA), and the others jockey for leadership position in the solar panel market, SMA Solar (SMTGF.PK) has quietly become the dominant force in the $2 billion dollar PV inverter market.

Inverters are the heart of a solar installation. Here's a quick review:

The inverter is the connection between the solar array and the electric grid. DC power produced by photovoltaic solar panels must be converted to AC power in order to be harnessed and matched to the electrical grid, whether at the residential, commercial, or utility level. DC-AC inverters perform this function. The inverter:

· Converts AC power to DC power

· Controls the PV system

· Reduces potential voltage interruptions

· Provides some level of performance monitoring

SMA's Monster Market Share

SMA Solar Technology is the leading pure-play PV inverter vendor with deep technological acumen, a wide-ranging product line, and a strong global sales-channel. SMA has a global market share of greater than 35%, is ramping up production and will continue to win market share due to a strong patent position, aggressive R&D (5% of sales goes to R&D) and industry-leading inverter efficiencies of up to 98%. They build inverter systems for grid-tied as well as off-grid systems.

According to charts in a recent SMA report (and if my 3 months of German lessons are any help) - SMA's 38% market share gives them more market share than the combined shares of the next four vendors (!). Those four vendors are Ingeteam, Fronius, Kaco, and Siemens (SI). It also looks like most of those Tier 2 players lost market share to SMA in 2008. And the "other" vendors, all 169 of them, are left to split up the remaining 35% of the market.

There is no player in the panel market with anything close to that dominance.

According to this chart from the same June general meeting at SMA - their 2008 annual sales were $954M, more than double the previous year.

The Biggest Inverter Factory

Just recently SMA inaugurated its new 18,000 square meter solar inverter factory, which takes its annual production capacity to 4 GW. SMA claims that the new factory has the lowest possible energy requirements and includes its' own 1.1MW solar installation (to capitalize on the Alaska-equivalent German sun).

The CEO of SMA, Günther Cramer, is right to gloat that:

"The inverters being the heart of every photovoltaic system already significantly contribute to an emission-free energy supply. With our CO2-neutral inverter production we even go one step further. Today we can show that an advanced production on industrial level can be done with a minimal environmental footprint. As the worldwide leading producer of solar inverters we now intend to initiate a trend towards CO2-neutral factories."

Any aspirant in the centralized inverter market is going to have to go through SMA.

Comments

[dr_cosmo:]

Inverters convert DC power into AC power, big difference. Only controls the PV system by use of MPPT, the Sun, or lack of it dictates the performance of the system. Also, market share dynamics will be changing with more micro inverter technology hitting the scene.

Jul 07 10:19 AM

[Windsun33:]

" Converts AC power to DC power
* No, it converts DC to AC.

· Controls the PV system
* No it does not control the PV system. It controls the AC power going into the system from the inverter.

· Reduces potential voltage interruptions
* No it does not. In fact grid tie inverters are designed to shut off on power interuptions.

· Provides some level of performance monitoring"
* OK, 1 out of 4 ain't bad I guess.

Jul 07 10:36 AM

[lefty37:]

Big Whoopee! DC to AC inverters/converters have been around for decades. Talk to any electrician that has done more than just wire houses.

Jul 07 02:08 PM

[Windsun33:]

Grid tie inverters have not been around for decades.


On Jul 07 02:08 PM lefty37 wrote:

> Big Whoopee! DC to AC inverters/converters have been around for decades.
> Talk to any electrician that has done more than just wire houses.

Jul 07 04:32 PM

[Steve Pluvia:]

Looks like WindSun already nailed you on most of your glaring errors; one point re micro inverters, they only make sense when their cost/watt is lo. That means microinverters for hi watt panels work, lo watt panels make no sense or cents.

On Jul 07 10:19 AM dr_cosmo wrote:

Also, market share dynamics will be changing
> with more micro inverter technology hitting the scene.

Jul 13 12:28 PM

[Eric Wesoff:]

Windsun, Mr. Pluvia,
I throw myself upon your mercy for the careless mistakes made in this piece. Of course I know that inverters convert from DC-AC.
Eric

Aug 03 08:03 PM