Grid-Forming Inverter Market Expected to Surge to USD 1.6 Billion by 2033, Growing Demand for Microgrids and Distributed Generation

Introduction

The Global Grid-forming Inverter Market is projected to grow substantially, with estimations suggesting it will reach a value of approximately USD 1.6 Billion by 2033, up from USD 0.7 Billion in 2023. This growth is anticipated to occur at a robust (CAGR) of 9.2% during the forecast period spanning from 2023 to 2033.

The grid-forming inverter market focuses on developing and selling inverters that create a stable power grid, essential for integrating renewable energy sources like solar and wind. These inverters can maintain grid stability even without a traditional power grid, making them crucial for modern energy systems, especially in microgrids and remote areas. They automatically adjust to changes in power demand and generation, making them a key technology for sustainable and decentralized power systems. The market for grid-forming inverters is growing due to renewable energy adoption, and inverter technology advancements.

Segmentation of the Grid-forming Inverter Market

String-inverters are the most advanced and efficient technology in the market, renowned for their scalability, cost-effectiveness, and simplicity of installation. They are commonly used in photovoltaic solar systems, offering flexibility in system design and installation. String inverters are also efficient and reliable, making them suitable for residential, commercial, and utility-scale solar arrays. Their development has led to enhanced performance, grid integration capabilities, and compliance with emerging grid standards. Central inverters, on the other hand, are typically linked to utility-scale solar PV installations, converting DC power into AC power for grid connection.

In 2023, the Central-Inverters segment is expected to dominate the global Grid-forming Inverter market due to its widespread use in utility-scale renewable energy projects. These inverters manage and convert large solar and wind farm power outputs into grid-usable electricity, ensuring grid stability. Their cost, installation, and maintenance efficiency make them a competitive alternative for utility-scale projects requiring significant power output.

The solar market is divided into four segments based on power rating: less than 10 KW, 10 - 50 KW, 50 - 100 KW, and more than 100 KW. Less than 10 KW inverters are suitable for home and commercial applications, with residential installation increasing globally. Other inverters include string inverters, microinverters, and vehicle inverters. The second largest market segment is below 10 KW, with mid-sized solar PV systems or microgrids becoming popular for decentralized energy generation and grid resilience.

Solar PV plants, wind power plants, and energy storage systems are the dominant green energy sources due to environmental concerns and scalability. Solar PV plants are competitive due to continuous advancements in efficiency and durability. Wind power plants are second due to favorable government regulations, incentives, and subsidies. These renewable energy sources offer advantages like quick deployment, low running costs, and minimal environmental impact, making them popular alternatives for energy generation.

Growth Factors of the Grid-forming Inverter Market

Increased Adoption of Renewable Energy Sources: The rising adoption of renewable energy sources is a key driver for the grid-forming inverter market. As countries and companies shift towards greener energy options like solar and wind, the need for reliable systems to manage and stabilize these intermittent energy sources becomes crucial. Grid-forming inverters are essential for integrating renewable energy into the grid efficiently. They ensure that the power supply remains stable despite fluctuations in renewable energy production. This growing emphasis on renewable energy is fueling demand for advanced grid-forming inverters, thus driving market growth.

Technological Advancements in Inverter Technology: Technological advancements are significantly contributing to the growth of the grid-forming inverter market. Innovations in inverter technology, such as improved digital controls, advanced power electronics, and enhanced software algorithms, are making these systems more efficient and reliable. Newer grid-forming inverters offer better power quality management, faster response to grid disturbances, and greater operational flexibility. These technological improvements are making grid-forming inverters more appealing to utilities and energy developers, leading to increased market adoption and expansion.

Government Incentives and Support: Government incentives and regulatory support play a crucial role in the growth of the grid-forming inverter market. Many governments are implementing policies and offering financial incentives to encourage the use of renewable energy and advanced grid technologies. These incentives can include tax credits, subsidies, and grants aimed at reducing the initial costs of grid-forming inverters. By creating favorable conditions for investment and development, governments are accelerating the adoption of these systems and fostering market growth.

Expansion of Smart Grid Infrastructure: The expansion of smart grid infrastructure is another significant growth factor for the grid-forming inverter market. Smart grids use advanced technologies to enhance the efficiency and reliability of electricity distribution. Grid-forming inverters are integral to smart grids as they help maintain grid stability and manage the integration of renewable energy sources. The increasing deployment of smart grid technologies worldwide is driving demand for grid-forming inverters, creating new opportunities for market growth and development.

Rising Investment in Energy Storage Solutions: The rise in investment in energy storage solutions is also driving the growth of the grid-forming inverter market. Energy storage technologies, such as batteries, are becoming more prevalent and are often used in conjunction with grid-forming inverters to enhance grid stability and reliability. As investments in energy storage systems increase, there is a corresponding need for advanced inverters that can effectively manage and integrate these storage solutions into the grid. This synergy between energy storage and grid-forming inverters is fueling market growth.

Growing Energy Demand in Emerging Markets: Emerging markets are presenting significant opportunities for the grid-forming inverter market. As developing countries invest in modernizing their energy infrastructure, there is a growing need for advanced grid technologies to support renewable energy integration and enhance grid reliability. Grid-forming inverters are crucial in these regions for building resilient and efficient energy systems. The expansion of grid-forming inverter applications in emerging markets is driving growth and creating new business opportunities for market players.

Regional Analysis

The Asia-Pacific region is predicted to lead the Grid-forming Inverter Market, with a potential of USD 470.19 million by 2033. This growth is driven by the increasing adoption of energy storage systems, particularly battery storage, which is crucial for utilizing renewable energy resources. Energy storage helps maintain grid stability and integrate renewable energy into the electricity system by storing excess energy during high production and releasing it when demand increases. Governments in the Asia-Pacific are introducing policies to facilitate renewable energy integration, including grid connection procedures, project access, and market-based trading systems. These regulations aim to facilitate renewable energy development and accelerate the transition to cleaner energy sources.

List of Market Segmentation

By Type

o   Micro Inverter

o   String Inverter

o   Central Inverter

o   Other Types

By Voltage

o   100-300 V

o   300-500 V

o   Above 500 V

o   Other Voltage

By Power Rating

o   Below 50 KW

o   50-100 KW

o   Above 100 KW

o   Other Power Rating

By Application

o   Solar PV Plants

o   Wind Power Plants

o   Energy Storage System

o   Electric Vehicles

o   Other Applications

Competitive Landscape

Siemens AG, ABB Ltd, Schneider Electric SE, General Electric Company, SMA Solar Technology AG, Hitachi ABB Power Grids Ltd, Mitsubishi Electric Corporation, Eaton Corporation plc, Emerson Electric Co., Toshiba Corporation, Huawei Technologies Co., Ltd, Enphase Energy, Inc.