January 14, 2011 -- A new study from IMS Research reveals that the multi-million dollar market for photovoltaics (PV) inverter service plans and extended warranties is forecast to grow by over 480% between 2010 and 2014, creating huge opportunities for inverter suppliers.
According to the 200+ page report from IMS Research, the market for extended warranties on string and multi-string inverters and service plans on central inverters currently was less than 10% of the inverter hardware market in 2010, but this is expected to grow substantially by 2014, outpacing revenue growth from hardware sales.
Two of the highest attach rates for extended warranties in 2010 were in the Czech Republic and Germany, due to the high proportion of decentralized plants installed in these markets and the inverter topologies used in commercial-sized installations. Products such as SMA’s Tripower, Kaco’s Powador and Sputnik’s SolarMax MT series provide three-phase grid-feeding and greater system design flexibility and the type of installations that these inverters are more frequently backed by an investor and often require an extended warranty to minimize risk.
North America recorded the highest attach rates for service contracts for central inverters in 2010, which was largely due to the high proportion of large, MW-scale PV plants that were developed in Ontario and the USA. In addition, companies such as Satcon and Advanced Energy Industries aggressively promote service plans as a key differentiator in a highly competitive market for large-scale central inverters. Attach rates are forecast to increase over the forecast period, partly due to rapidly growing markets -- the USA, China and India -- favoring large utility-scale installations. Other causes include greater emphasis on reducing risk and suppliers more aggressively targeting these highly profitable service plans.
IMS Research PV Analyst and report co-author Tom Haddon noted; "With greater adoption of PV as a viable utility-scale power generation source, service contracts are going to become an increasingly important factor in customers’ decision making when choosing an inverter supplier. When just an hour of downtime can cost investors huge amounts in lost income, the breadth and reputation of suppliers’ service contracts will become a key differentiator amongst vendors."
Much like the inverter hardware market, SMA also dominates the service market with an estimated market share in excess of 35% in 2010. The supplier appears to have an even stronger position in service than inverters, due to its high focus on this segment via its SunnyPro club and strong brand reputation.
IMS Research is a supplier of market research and consultancy services on a wide range of global electronics markets. IMS Research regularly publishes detailed research on the PV inverter market, and other areas of the PV industry, among others. http://www.pvmarketresearch.com.