First, the total market size of China photovoltaic inverter products in the period from 2010 to 2012.
1.Analysis on the market scale of China's photovoltaic(PV) inverter products from 2010 to 2012
2009 saw the very beginning of China producing PV inverter. In 2010, affected by the small market base, the market grew fast. It was, however, until the second half of the year 2011 that China PV inverter market began to develop rapidly as the increase of the solar energy-powered PV electricity generators when the market competition was much more intense because a large group of competitors had emerged. Facing the global economic downturn and the " dual inverse " imposed by the U.S and Europe, price of Chinese PV products continued to fall. In response, the project of producing in large scale initiated and so the market share of China PV inverter products reached 2.748 billion in the year 2012. In 2011 the production capacity of inverter started to expand giving rise to the situation that market supply overnumbered its demand in 2012.Whereas, the PV market was sluggish and the competition is intense. As a result, the sales price kept reducing drastically and the growth of China PV inverter market share slowed down in 2012.
Second, the market features of the PV inverter products market in China in 2012
1. Incentives increased significantly.
Continued expansion of PV production capacity led to the overall decline in the price of the PV industry chain production, which accounted for the mounting losses of the upstream PV manufacturers. In 2012, China PV industry suffered from the dual pressure from Europe and America of "dual inverse " (i.e. the anti-dumping and anti-subsidy investigation). Consequently, the market got depressed. Then Chinese government introduced a number of policies of intervention, especially the Golden Sun Demonstration Project in the second half of 2012. The project is featured by the excess of installed equipment over anticipation that served as a tremendous incentive to the PV market.
2. Distributed Generation (DG) promoted greatly the application and popularization of the PV technology.
PV distributed generation is a novel, and promising way of generating electricity and utilizing energy comprehensively, which works under the principle of "the nearest power, the nearest place to integrate into the national grid, the nearest conversion into daily electricity, the nearest service" principle. It can not only effectively improve the generating capacity of the same PV power station, but obviously solves the problem of power loss in the boost and long distance transportation. However, since the DG posted high standards on the maximum amount of solar power generation and the grid security, the PV inverter made a real difference thanks to its special function and high stability.
The large power stations have yet to be integrated to each other successfully. So the DG will remain the focus of PV application in china. While generation electricity by means of PV, China can surely draws some lesson from the experience of German and the like in distributed generation applications. Golden Sun Demonstration Project as an important policy to publicize the distributed generation takes up a pretty high proportion in Chinese newly-built PV installations every year. As the examination and approval of the PV installations gets easier, its domestic PV industry chain including the inverter manufactures will certainly benefit in a direct manner.
3. Prices continued to decline.
With China's installed PV market launched, electrical equipment manufacturers rushed in. And the inverter sellers were obliged to decrease the price because their competitors tried to enlarge the production. The inverters were down by 20 per cent in price in 2011 due to the fierce market competition. In 2012 Chinese PV industry was affected heavily by the anti-dumping and anti-subsidy investigation by U.S and Europe as well as the declining of the Italian installations. Therefore, the price of the PV inverter continued to slip in that year by 10 per cent to 15 per cent further lessening the gross margin of related manufacturers.
4. The rapid development of micro-inverter
The grid inverters fall into three sorts, namely centralized inverter, string inverter and the micro-inverter in terms of the grid connection way. Because the number of unit connected into the grid differs, generally speaking, the centralized inverters are greater in power than the group of string inverters which in turn were larger than the micro-inverters. The micro-inverter is generally made up of by only one unit connecting device and produces alternating current. It was invented in the 1990s. The past years have seen its rapid development.
Micro-inverters are mainly used for civil or commercial projects of small scale. For large power plants, there is little natural shelter except for the clouds, and thanks to the regular maintenance, shadowing effect on output of power is relatively little. Yet as for small residential projects or commercial projects, considering the complexity of their surroundings of buildings the inverters are inclined to be sheltered by tree shadows and other similar things hence the big influence of the shadowing. Some foreign research found that large degree of sheltering might cause the output power to lose up to 50 per cent.
The conventional centralized inverter and the group of string inverter require the same connecting units. So the decrease of power of one unit on account of the shadowing effect would mean the same decrease of its neighboring units only to reduce the overall output of the whole string of units. By contrast, every unit in the micro-inverter has its own inverter and so the other units without shadowing may work as usual lessening the losses of the whole system. In addition to the efficient power output, micro-inverters also save direct current cable, enjoy a relatively long service life and can make it easy to monitor the single unit of the inverter, among other things. However, it is worth mentioning that the production through this kind of inverter cannot do without a fairly high cost per watt.. Nevertheless in the whole process of the photovoltaic power generation system the micro-inverter can improve the system efficiency, and when it comes to the electricity-generating cost, systems with micro-inverters tend to be low than that with those traditional string and centralized inverters,
Nowadays, the development trend of the inverter is focused on two extremes: power plants usually use the high power inverter and micro-inverters are also common. With the development of technology and improvement of the scale, there is good reason to believe that micro-inverters will enjoy a lower production cost and a brighter future in applications. For the time being, many enterprises have turned their attention to the micro-inverter market.
Third, the general prediction of and analysis on China PV inverter product market
1. An overall forecast of China PV inverter product market from 2013 to 2017
Despite the many challenges new energy industry faces at present, the harsh situations in China and abroad in 2013, and the upcoming more fierce foreign competition, the reduced product price and the overcapacity of production in the industry, there exist quite a few opportunities such as the industry reshuffle, distributed generation and the like. The National Energy Bureau released in the "Twelfth Five-Year Plan" that the goal of the PV power generation will be 21GW, which provides a broad space for the domestic inverter enterprises; however, the favorable market will attract more and more competitors leaving the price of the PV products falling dramatically. As a result, their market share will shrink.
2.The trend of overall market development
(1) Favorable factors
To speed up the development and utilization of renewable energy has become the only way out to cope with the increasingly severe energy and environment tensions.
Renewable energy is an important part of energy system, which is characterized by the widespread distribution of resources, high potential, little impact on environment, and sustainable use. So it is conducive to the harmonious development of man and nature. At present, it is commonly recognized that the renewable energy can help countries to guarantee the energy security, improve the environmental protection and deal with the climate change. With the development of society and economy, the global demand for energy continues to rise; also the energy, resources and environmental problems have become increasingly prominent. That has made the renewable energy the only way out so as to respond to the increasingly serious problems. In future, answer to the call of energy conservation and emissions reduction and the depletion of the traditional fossil energy, renewable energy plays more and more important role in the global energy supply system. Lately, continuous haze in the central and eastern China shows that it is facing great pressure of the environment, hence the more urgent demand for green and clean energy.
The cost of PV power generation dropped to promote the reduction of electricity price, gaining itself much market share.
The 12th Five Year Development Plan of Solar Photovoltaic Industry released in 2012 set the target of PV power generation cost: By 2015 the PV system will cost less to 15,000 RMB per kilowatt, the generation cost will be reduced to 0.8 RMB per kilowatt, and, grid parity on the distribution side will come true. Also by 2020 the PV system cost will go down to 10,000 RMB per kilowatt, the generation cost will decline to 0.6 RMB per kilowatt, and the grid parity on the side of generation side will be realized. Thus, effective competition will take place on main power markets. The fact, however, was that by the end of 2012 the installed PV system cost has dropped to 10,000 RMB per kilowatt or so., We can predict that in the near future, Grid Parity era will brought solar PV power generation great development space.
China has initiated the development of photovoltaic market and will become one of the most important global market for photovoltaic applications.
From the perspective of Chinese social economic development, the development of solar energy photovoltaic industry is the important direction for safe energy supply, the construction of a low-carbon society, economic restructuring, and the nurture of strategic emerging industry in china. During the "Twelfth Five-Year Plan" period, China's photovoltaic industry will continue to develop fast, and the growth goals have been raised for many times. Chinese government has strengthened its support for the development of the photovoltaic industry and the State Grid has also introduced policies to favor vigorously the distributed photovoltaic power generation. All of that made PV installed capacity increase quickly. With the gradual start of the domestic market, China is on the way to become the key photovoltaic market around the world.
(2) Disadvantages
Policy risk
In spite of the progress China made in the power generation by renewable energy for the time being, the cost of generation and the feed-in tariff is still higher than that of generation by traditional fossil energy. So the government policy support is indispensable. Against the backdrop of the constant global energy-saving and emission reduction, any change in the macroeconomic market policy, government subsidy and stimulating policy will determine to some degree the development of the industry.
Reliance on industry policy support for a long time
In terms of the generation cost, solar photovoltaic and wind power is not as cheap as that of the conventional energy. That is why the current development depends heavily on the industry policy support. In future, the gap will be bridged as the technology of power generation by solar power photovoltaic and wind energy gets enhanced and the cost of traditional fossil generation rises,
In addition, one of the characteristics of renewable energy generation is distributed access. Both solar energy and wind energy is intermittent, posing a new challenge to the acceptance capacity of power grid. But with the development of grid technology, including the application of smart grid and the electric storage technology, the acceptance of the power grid will be improved to the electricity generated by the renewable energy.
Industry competition
Photovoltaic inverter as a new industry in China, by means of the relatively low threshold attracts a large number of enterprises to participate in the research, development and production. There will be intense competition on the photovoltaic inverter market. However, the PV industry chain also tends to integrate, and so the manufacturers will be obliged to face high requirements in respects of the level of R & D and production power. Therefore, many manufacturers that depend on the resembling based on the purchase of raw equipment for the lack of original technology will find it very difficult to survive. Yet there exist some mainstream manufacturers. They emphasize technology accumulation and technological innovation, and so have the deep capability of R & D. By virtue of their comprehensive advantages these manufacturers will have larger development space so as to meet the application requirements of the photovoltaic industry development.
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