- Wood Mackenzie forecasts global inverter shipments to fall in 2025 and 2026 following record volumes in 2024
- Policy uncertainty in China Europe and the United States weighs on demand while competition drives prices lower
- Long term growth expected from electrification storage integration and grid modernisation
The global solar inverter market is entering a period of contraction after several years of rapid expansion, according to the latest outlook from Wood Mackenzie. Global shipments are expected to decline by two percent to 577 gigawatts AC in 2025, followed by a sharper nine percent drop to 523 gigawatts AC in 2026.
The slowdown comes after record shipments in 2024 and reflects growing uncertainty across key markets including China Europe and the United States. Analysts say manufacturers are being forced to reassess their strategies as demand growth moderates and regulatory frameworks evolve.
Joe Shangraw, research analyst at Wood Mackenzie, said the industry is moving away from an era of uninterrupted expansion. He noted that even the largest global manufacturers can no longer rely on continuous shipment growth and must instead respond to new demand drivers. These include hybrid solar and storage systems retrofit and repowering activity enhanced cybersecurity requirements higher voltage system architectures and the provision of grid services.
China which has long dominated the global inverter market is expected to record its first annual decline since 2019. Shipments are forecast to fall by five percent to 304 gigawatts AC in 2025 amid policy uncertainty between national planning cycles. Despite the near term slowdown China is still expected to account for more than 2.9 terawatts AC of cumulative inverter demand through 2034.
Elsewhere in the Asia Pacific region excluding China inverter demand is forecast to grow to 89 gigawatts AC in 2025. This growth is being supported by investment in domestic manufacturing capacity and the expansion of rooftop solar markets in countries such as India and across Southeast Asia.
European inverter shipments are expected to continue a downward trend falling from 88 gigawatts AC to 83 gigawatts AC in 2025 and dropping below 75 gigawatts AC per year by 2032. Persistent inventory overhangs and lower capture prices in utility scale markets including Spain are weighing on the region. In the United States shipments are forecast to reach 47 gigawatts AC in 2025 before declining sharply in 2026 as tax incentives under the Inflation Reduction Act are gradually phased out.
Pricing pressure is intensifying across all inverter categories as competition increases and technology costs fall. Chinese manufacturers continue to drive price reductions while advances in power electronics improve efficiency. Module level power electronics prices vary widely by region with United States prices more than fifty percent higher than global averages due to market structure and competitive dynamics. Hybrid inverter prices declined significantly in 2024 as battery ready systems became standard offerings from leading suppliers.
Utility scale inverters are seeing the steepest price declines. Domestic Chinese string inverter prices are expected to fall below two cents per watt AC by the mid 2030s while central inverter prices approach one cent per watt AC. Larger unit sizes and lower semiconductor costs are accelerating this trend.
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Cybersecurity is emerging as a critical issue for the sector. Governments in both Europe and the United States are signalling tighter oversight of inverter software and remote access capabilities from 2026 onwards. These measures could reshape competition between domestic and foreign suppliers and add further uncertainty for manufacturers planning market entry strategies.
Despite the current downturn Wood Mackenzie expects the inverter market to recover and surpass 2024 levels in the early 2030s. Electrification rising electricity demand from data centres and artificial intelligence applications and a growing need to repower ageing solar assets are expected to underpin long term demand.
According to Shangraw companies that successfully navigate the current market correction while investing in next generation technologies will be well positioned to benefit when growth resumes later in the decade.
Author: Bryan Groenendaal
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