German solar market drives European demand for smart inverters

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31 July 2013, Nuclear, Solar, Wind

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Europe is emerging from the solar boom of 2010-12 into a market faced with rapidly falling panel prices, overcapacity, and supplier consolidation. Governments are also trying to counterbalance falling prices by reducing support for solar installations. Due to these developments, Datamonitor forecasts that during the next seven years to 2020, growth in installations will moderate by several gigawatts across the core European markets (Germany, Italy, Spain, France, and the UK) compared to previous years.

The growing penetration of solar generation is already having an impact on network operators. Part of the solution to moderating the impact of solar panels on the grid lies behind the panels themselves, in the power inverter.

Inverter units that contain some smart features such as reactive power control already make up the majority of the inverter market, driven by Germany's 2011 Low and Medium Voltage Directives requiring inverters to carry some basic smart features to aid with grid integration. As Germany is by far the world's largest market, almost all inverter suppliers incorporated these functions into their units so that the market was not shut off for them, greatly increasing the proportion of inverters carrying at least basic smart functions.

Datamonitor estimates that as early as 2010 around 20% of inverters carried these functions, increasing to over 50% by the end of 2012. Over the forecast period, Datamonitor assumes that the proportion of inverters carrying basic smart functions will further increase as the core markets follow Germany's lead and address grid connection issues. "European Solar Integration Issues" provides a forecast of solar installation rates to 2020, and Datamonitor expects that of these installations 90% by megawatts shipped will have smart inverter functions by the end of the forecast period.

Datamonitor also predicts an increase in the penetration of battery storage in the inverter market (directly incorporated into the inverter design), assuming inverters containing storage technology decrease in cost and improve in reliability and efficiency to gain widespread acceptance. Current solutions based on lithium ion batteries remain too expensive costs need to be reduced considerably if the forecast increase is to be achieved.


www.datamonitorenergy.com / asken@datamonitor.com / @DatamonitorEN

Source: MarketLine

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