Huge Boost in Grid-Connected Energy Storage Leads to 4.5 Gigawatt Opportunity for inverter suppliers, IHS Markit Says
10–99 kW inverter shipments to grow the fastest driven by the surge in commercial and industrial systems
LONDON (17 November 2016) - As the global market for grid-connected energy storage expands, the opportunity for energy storage inverters and power conversion systems (PCS) will grow from 910 MW in 2015 to 4.5 GW in 2020.
"While prices in the energy storage industry are still relatively attractive for suppliers compared to similar industries, the price premium they hold will likely reduce over the coming years," said Sam Wilkinson, senior research manager at IHS Technology. "We forecast that global PCS prices will decrease 13 percent a year on average from 2016 to 2020."
Leading energy storage suppliers
IHS Technology tracks more than 30 suppliers with inverter products below 100 kW. Over 25 companies shared half of the energy storage inverter shipments in 2015. Panasonic, Sharp and Omron were in the top five suppliers for 2015.
The large-scale energy storage inverter market is more concentrated, with BYD, Parker Hannifin and Woojin accounting for nearly half of the market in 2015.
Average PCS prices are forecast to experience significant reductions over the coming years as the market becomes increasingly competitive with new suppliers entering the market, and volumes increasing, the IHS Technology report said. Whilst the cost of energy storage inverters is higher than PV inverters due to the increased functionality, IHS Technology anticipates that as the market grows the size of this premium will rapidly decrease.
"Competition in the large-scale sector has already led to prices being significantly lower, and we forecast the average global price per watt of 1 MW+ inverters will fall below $0.10 in 2020," Wilkinson said. "However, prices will undoubtedly be below this average on occasions as large-scale tenders attract highly competitive pricing."
Surge in commercial and industrial systems
In the forecast period, commercial and industrial (C&I) energy storage installations are forecast to grow faster than those in the residential and utility-side-of-meter segments, growing by an average of over 70 percent per year for the next five years.
"As average system sizes grow, larger inverters are predicted to gain share of this segment as well, leading to close to 700 MW of 100-999 kW inverters shipped to C&I installations in 2020," Wilkinson said.
Residential market trends
AC-coupled systems will make up over 60 percent of the market by 2020, the IHS Technology report said. The systems are easier to retrofit to existing PV systems and the increasing importance of aggregated residential systems to create virtual power plants and provide grid services will help drive this trend.
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