While Suntech, Kyocera, Sharp, Samsung, First Solar, SunPower, and the others jockey for leadership position in the solar panel market, SMA 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 DC power to AC 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 percent, is ramping up production and will continue to win market share due to a strong patent position, aggressive R&D (5 percent of sales goes to R&D) and industry-leading inverter efficiencies of up to 98 percent. It builds inverter systems for grid-tied as well as off-grid systems.
According to charts in a recent SMA report (and if my three months of German lessons are any help) SMA's 38 percent 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. 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 percent 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 – its 2008 annual sales were $954 million, 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 gigawatts. SMA claims that the new factory has the lowest possible energy requirements and includes its' own 1.1-megawatt 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.
