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hen the power supply industry first started about sixty five years ago, it was dominated by the companies from the United States. Then that participation was extended to companies in Europe and the Japan. With the advent of high volume applications, mainly desktop and laptop computers, Taiwanese companies such as Delta Electronics and Lite On Technology became dominant participants. Emerson Electric, a US company is still the largest power conversion company in the world.With the emergence of the solar power industry and the ensuing growth of solar inverters this business order is changing. This is mainly due to the initial market development in Germany, a relatively cloudy European country, instead developing in the United States or in sunny Asia. The solar market has developed rapidly in recent years to total estimated revenues of about $5.5 billion in 2010. With Germany taking the lead in the solar market, SMA Solar Technology, a Germany-based company, has emerged as the industry leader. In 2010, SMA Solar is expected to exceed $2 billion in sales, garnering about 40% share of the total market. No other company comes close to SMA Solar, but Power-One (a US-based company) is gaining market share. Its recent growth in solar inverter products cannot be overlooked. Within a few years, Power-One has taken 2nd place in the competitive hierarchy in the solar inverter market with 2010 growth rate of about 649% (a nine month comparison between 2010 and 2009). Its share of the solar inverter products market has crossed 10% Though Power-One is a US-based company, its renewable energy business including inverter design, manufacturing and markets are centered in Europe. From an inverter business perspective Power-One can be viewed as a European company. Many other major companies, such as Kaco new Energy and Fronius are also European - German and Austrian, respectively. So unlike the traditional power supply industry where markets and participants are dominated by the US, Taiwan and Japan, the market for solar inverter products is dominated by the Europeans, mainly because Europe has emerged as the leading market for renewable energy. But that may be about to change with two major geographic regions which are poised to enter this renewable energy market segment aggressively. These two major regions are North America and China. Each is huge and important, and each may become larger than the market in Europe. Also other geographic regions in the rest of the world are not far behind in this market development. As a result, many new opportunities are expected to emerge to serve this new market. Will these new market opportunities bring new participants to the market, as global and local/regional companies enter this market? SMA Solar is a truly global company with fifteen subsidiaries in all major regions, including the US and China. It recently opened a new subsidiary in India as it is considered by many as the next big emerging market. To take advantage of the emerging market in North America, Power-One has opened manufacturing facilities in Canada to serve the Canadian market and in Arizona for the US market. Since Power-One is primarily an American company located in California with a solar inverter products market that has grown significantly in 2010, they may have an advantage in serving the US market. Most of the other significant companies, Kaco and Fronius, have also established offices in the US market. The market in China is developing simultaneously and many Taiwan-based companies including Delta Electronics (DelSolar, a subsidiary of Delta Electronics in the solar business) are already participating in this market. The China facility of Power-One is expected to operational by the first quarter of 2011. Many other companies in China are also entering this market, which was not the case in the early development of power electronics. Times have changed. The recently organized Solar Power International Conference in Los Angeles, California provided some insight into the future of this industry. First, the conference was a resounding success with over 1,100 exhibits and more than 27,000 attendees. Though I did not attend the conference, I have talked to several people who did attend and the consensus was that the conference had the energy, enthusiasm and optimism, unlike they had seen in any other power electronics conference. Solar is the future However, one of the important aspects of the conference was the participation of inverter manufacturers. There were more than 75 inverter manufacturers exhibiting with the following representation: US: 40.9%; China: 13.6%; Germany: 10.6%; Taiwan: 10.6% and ROW: 24.3%. This portends the emerging globalized nature of the inverter market and their manufacturers. With the globalization of the solar inverter products business, a new dawn awaits this industry with new opportunities for new participants. Will they rise with the new opportunities, or disappear into the sunset?
The views expressed in this article are solely of Mohan Mankikar. They do not represent the views of PSMA. Mohan Mankikar has been a part of the power supply industry for over twenty five years. An active member of the PSMA since its founding, he had been a board member of the PSMA and currently serves on the Advisory Council.
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