Inverter Market

Increasing investments in the renewable energy sector and the growing automotive sector are driving the market growth

According to the International Energy Agency, investments in the energy sector are expected to reach USD 2.8 trillion in 2022, with a projected decrease to USD 2.4 trillion in 2023. Of this, over USD 1.7 trillion is earmarked for renewable power, nuclear energy, grids, storage, low-emission fuels, efficiency improvements, and end-use renewables and electrification. The power sector has particularly witnessed notable investment growth, driven primarily by renewables and grid infrastructure.

Clean energy investment surpassed USD 1.4 trillion by 2022, constituting nearly three-quarters of overall energy investment growth. In the five years following the signing of the Paris Agreement in 2015, the yearly average growth rate in clean energy investment was just over 2%. However, since 2020, this rate has increased to 12%, although it falls short of meeting international climate objectives. Notably, China led in clean energy investment in 2021 with USD 380 billion, followed by the European Union with USD 260 billion and the US with USD 215 billion.

The automotive industry is witnessing a notable increase in the adoption of electric and hybrid vehicles, leading to the demand for power inverters to convert DC power from batteries into AC power for driving motors. In the fiscal year 2022-23, the total export of automobiles reached 4,761,487 units, with two-wheelers accounting for approximately 77% of the total exports. From April 2022 to March 2023, passenger vehicle exports surged from 577,875 to 662,891 units, marking a positive growth of 14.7%. 

India contributes 40% of the total $31 billion global engineering and R&D expenditure, with 8% of the country's R&D spending allocated to the automotive sector. The increasing global demand for electric vehicles serves as a significant driver fueling the growth of the power inverter market. As a result, it is anticipated that throughout the projection period, demand for the Inverter Market will increase investments in the renewable energy sector and the growing automotive sector, driving the Inverter Market revenue.

The Global Inverter Market Industry is poised for remarkable growth, with projections indicating a market size of 19.6 USD Billion in 2024 and an anticipated increase to 89.0 USD Billion by 2035. This growth trajectory reflects a compound annual growth rate of 14.74% from 2025 to 2035. Such figures underscore the increasing reliance on inverters as essential components in renewable energy systems. The expansion of the market is likely to be driven by factors such as technological advancements, government incentives, and rising demand for energy-efficient solutions. These projections highlight the dynamic nature of the Global Inverter Market Industry and its potential for future development.

The Global Inverter Market Industry is experiencing a notable surge in demand due to the increasing adoption of renewable energy sources. As countries strive to meet their energy needs sustainably, solar and wind energy installations are on the rise. In 2024, the market is projected to reach 19.6 USD Billion, driven by the need for efficient energy conversion systems. Governments worldwide are implementing policies and incentives to promote renewable energy, further propelling the growth of inverters. This trend is expected to continue, as the Global Inverter Market Industry aligns with global sustainability goals and the transition towards cleaner energy solutions.

Government initiatives play a crucial role in shaping the Global Inverter Market Industry. Many countries are implementing favorable policies and financial incentives to encourage the adoption of renewable energy technologies, including inverters. These initiatives often include tax credits, rebates, and grants aimed at reducing the upfront costs associated with solar and wind energy systems. Such measures not only stimulate market growth but also enhance consumer awareness and acceptance of inverter technologies. As a result, the Global Inverter Market Industry is likely to witness accelerated growth, particularly as governments aim to meet their renewable energy targets and commitments.

There is a growing awareness of energy efficiency among consumers and businesses, which is positively impacting the Global Inverter Market Industry. As energy costs rise and environmental concerns become more pronounced, individuals and organizations are increasingly seeking solutions that enhance energy efficiency. Inverters play a pivotal role in optimizing energy consumption, particularly in residential and commercial applications. This heightened awareness is likely to drive demand for advanced inverter technologies, contributing to a projected compound annual growth rate of 14.74% from 2025 to 2035. The Global Inverter Market Industry is thus positioned to capitalize on this trend as energy efficiency becomes a priority.

Technological innovations are significantly influencing the Global Inverter Market Industry, enhancing the efficiency and functionality of inverters. Advanced inverter technologies, such as string inverters and microinverters, are becoming increasingly prevalent, offering improved performance and reliability. These advancements enable better energy management and integration with smart grid systems. As a result, the market is poised for substantial growth, with projections indicating a rise to 89.0 USD Billion by 2035. The continuous evolution of inverter technology is likely to attract investments and drive competition, thereby fostering a dynamic environment within the Global Inverter Market Industry.

The Global Inverter Market Industry is benefiting from the rising electrification in emerging markets. As these regions develop, the demand for reliable and efficient power solutions is escalating. Inverters are essential for integrating renewable energy sources into the grid, making them vital for countries aiming to expand their electricity access. The growth of the middle class in these markets further drives the demand for energy-efficient appliances, which often require advanced inverter technologies. This trend suggests a robust growth trajectory for the Global Inverter Market Industry, particularly as electrification efforts continue to gain momentum in developing economies.

By region, the study provides market insights into North America, Europe, Asia-Pacific, and Rest of the World. The anticipated expansion of the Inverter market in North America can be attributed to several key factors. As the utilization of renewable energy sources for electricity generation continues to rise, the North American power inverter market is witnessing significant expansion. In 2022, annual renewable energy generation in the United States exceeded that of coal for the first time in history. 

Projections indicate that by 2025, domestic solar energy generation will increase by 75%, while wind energy generation will see an 11% increase. By 2050, renewable energies are forecasted to account for over 42% of the country’s electricity generation, compared to the current 20%. Both government and private sector entities have escalated their investments in the construction of solar and wind power facilities in response to the urgent need to reduce carbon emissions and comply with stringent energy conservation regulations.

Notably, the United States installed 1,104 MW of distributed wind capacity between 2003 and 2022, with an additional 29.5 MW added across 13 states in 2022 alone. Furthermore, the growing public awareness of solar energy has led to increased investment in domestic solar power generation initiatives.

Further, the major countries studied in the market report are the US, Canada, Germany, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Figure 2: Inverter Market Share By Region 2023 (Usd Billion)

Source: Secondary Research, Primary Research, Market Research Future Database and Analyst Review

Europe Inverter Market accounts for the second-largest market share in Europe. The rising demand for inverters is attributed to intensified efforts to mitigate CO2 emissions and shift towards alternative energy sources. As per the latest ‘Trends and Projections’ report by the European Environment Agency, greenhouse gas emissions in the European Union experienced a 2% decline in 2022 compared to the previous year. Official data reveals a notable reduction of methane emissions by 36% in the EU in 2020 compared to 1990 levels. 

The most significant reductions in emissions were observed in the energy supply sector, encompassing energy industries and fugitive emissions, with a decline of 65%, followed by the waste sector, with a decrease of 37%, and the agriculture sector, with a reduction of 21%. Additionally, government initiatives supporting electric vehicle (EV) manufacturers and the availability of commercially viable technologies in the region have spurred increased demand for electric cars, consequently bolstering market growth. Further, the German Inverter Market held the largest market share, and the UK Inverter Market was the fastest-growing market in the European region

The Asia-Pacific Inverter Market is expected to grow at the fastest CAGR from 2024 to 2032. The Asia Pacific region stands as a prominent market for inverters, driven by the increasing adoption of renewable energy systems and the escalating electricity demand in emerging economies. The electricity generation target for the year 2023-24 has been set at 1750 Billion Units (BU), reflecting a growth of approximately 7.2% over the actual generation of 1624.158 BU recorded in the previous year (2022-23).

Notably, the generation during 2022-23 increased to 1624.158 BU from 1491.859 BU generated in 2021-22, marking a growth rate of about 8.87%. 

Furthermore, favorable government initiatives aimed at promoting renewable energy sources and facilitating the integration of solar power systems with inverters have further propelled the market in the region. According to the Indian Brand Equity Foundation (IBEF), the Union Budget 2022-23 allocated Rs. 19,500 crore (US$ 2.57 billion) for a Production Linked Incentive (PLI) scheme to enhance the manufacturing of high-efficiency solar modules. Additionally, in Budget 2023-24, a central sector support of US $1.02 billion (Rs. 8,300 crores) was announced for the Interstate Transmission System (ISTS) infrastructure to facilitate the generation of 13 GW of renewable energy from Ladakh.

Moreover, China’s Inverter Market held the largest market share, and the Indian Inverter Market was the fastest-growing market in the Asia-Pacific region.

Leading market players are investing heavily in research and development to expand their product lines, which will help the Inverter market, grow even more. Market participants are also undertaking a variety of strategic activities to expand their global footprint, with important market developments including new product launches, contractual agreements, mergers and acquisitions, higher investments, and collaboration with other organizations. To expand and survive in a more competitive and rising market climate, the Inverter industry must offer cost-effective items.

Manufacturing locally to minimize operational costs is one of the key business tactics used by manufacturers in the global Inverter industry to benefit clients and increase the market sector. In recent years, the Inverter industry has offered some of the most significant advantages to the renewable energy sector and industrial automation.

Major players in the Inverter Market, including Huawei Technologies Co., Ltd. (China), SUNGROW (China), SMA Solar Technology AG (Germany), Power Electronics S.L. (Spain), Fimer Group (Italy), SolarEdge (Israel), Fronius International GmbH (Austria), Altenergy Power System Inc., (US), Enphase Energy (US), DARFON (China) are attempting to increase market demand by investing in research and development operations.

Sungrow is a leading renewable energy company specializing in the manufacturing of power supply equipment for solar PV and wind power projects. Their product portfolio includes PV inverters, floating systems, storage systems, and related accessories. Additionally, Sungrow offers a range of services, including construction, development, and operation management services, as well as microgrid storage solutions, grid support storage solutions, and residential storage solutions. 

Their products are utilized in solar energy photovoltaic power stations, solar energy photovoltaic generation systems for buildings, and wind power generation plants. Headquartered in Hefei, Anhui, China, Sungrow focuses on providing innovative solutions for sustainable energy generation. In July 2023, Sungrow entered into a framework agreement with Sonnedix, an international renewable energy manufacturer, to supply inverter solutions for 750 MWp PV projects. As part of the agreement, Sungrow will deliver string inverters, central inverters, and medium-voltage stations to Sonnedix, while also providing professional services such as personnel training to support Sonnedix's expansion plans in Europe.

SMA Solar Technology AG (SMA) is a prominent player in the renewable energy equipment sector. The company specializes in the development, production, and distribution of photovoltaic inverters, choke coils, transformers, and monitoring and energy management systems for PV systems. Additionally, SMA offers intelligent energy management systems, digital services, and solar power plant operation and maintenance services. With a global presence spanning South America, Asia Pacific, North America, Europe, the Middle East, and Africa, SMA is committed to advancing sustainable energy solutions. Its research and development efforts are focused on creating comprehensive system solutions and innovative digital business models. 

SMA operates production facilities in Germany and China, along with an electromagnetic components center in Poland. Headquartered in Niestetal, Hessen, Germany, SMA remains at the forefront of innovation in the renewable energy industry. In April 2022, the company introduced a new line of four inverters with rated outputs of 12kW, 15kW, 20kW, and 25kW, designed for use in PV rooftop systems up to 135kW. These inverters ensure grid-compliant power control for the entire system, accommodating PV generators up to 150% larger than conventional systems. This product launch further strengthens SMA's diverse product portfolio.