PV inverter market will exceed 100 billion

Recently, the solar power industry continues to be favored by the market. We believe that the cost of solar power generation will reach parity prices in the next 3 to 5 years. This will bring about an explosion in the demand for solar power generation, and the PV inverter market will also grow substantially.

Photovoltaic inverters are modular devices that convert DC power into AC power through power electronics, and are an important link connecting photovoltaic power generation and power grids.

We believe that PV inverters are the last large-scale and unexploited rich mines in the photovoltaic industry. According to our calculations, the current market size of photovoltaic inverters is about 43 billion yuan. It is estimated that by 2015, even considering the decline in selling prices, the market size of photovoltaic inverters will exceed 100 billion yuan, which is not much for photovoltaic components. The fine-grained industries that can surpass 100 billion, and the winners of the competition are expected to become large-scale companies with more than 10 billion.

It is understood that the current global photovoltaic inverter market is dominated by major manufacturers such as SMA. The SMA that entered the market first dominated the 40% market and was the undisputed leader. The top four manufacturers accounted for more than 60% of the market share. At present, domestic companies have a small share of the photovoltaic inverter market, accounting for about 5%.

In fact, from the perspective of industry properties, photovoltaic inverters are more suitable for growing industries in China. The main reasons are: First, China is already the world's largest battery production base and has inherent advantages in the market. Second, Chinese companies have cost advantages. According to our estimation, the cost of domestic inverters is expected to reach 40% of imports. In addition, Chinese companies have a technological basis. Photovoltaic inverter is essentially a power electronic product, and domestic companies have strong competitiveness in the production experience and technical level of power electronics.

【Investment Advice】

We believe that the biggest highlight of the photovoltaic inverter industry is the huge potential market size. The current participants’ sales are all over ten billion yuan. Once these companies can become the industry leader, they will mean a tenfold increase in scale. In terms of individual stocks, investors can focus on KSTAR (002518), Rongxin (002123) and Kehua Hengsheng (002335).