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Oversupply and M&A occur in the PV inverter market

published: 2013-05-06 18:31

Having in mind that solar power may become the next major energy source, global electricity and automation technology manufacturer ABB announced that they will acquire Power One, a large PV inverter manufacturer. The purchase price is expected to be over 1 billion USD, and both ABB and Power One hopes to complete the M&A by the end of 2013. Oversupply and high cost still remained main challenges of PV industries, and the merger of the two large companies may bring the market to a different phase.

According to EnergyTrend, a research division of TrendForce, Power One is currently the second largest inverter supplier in the global market, and ABB is not only a major company in the global electricity market, but also one of the top ten global PV inverter suppliers. After the M&A of the two companies, competition with the leading PV inverter manufacturer SMA may become more intense, and inverter price may also decline.

On the other hand, market share considerations also may have caused the M&A of the two companies. First-tier PV manufacturers have started to shift their business to emerging markets, and while they boosted demands, they also faced increased investment risk and financial pressure as well as the unstable electricity environment. ABB is deeply rooted in the global electricity market, and Power One covers products ranging from small residential systems to large solar power plants. The cooperation of the two companies may accelerate the development in emerging markets and increase their market share.

In addition, since the global PV on-grid installation has increased, PV systems have more often overlapped with traditional power systems, thus how to maintain a stable on-grid power output and increase the use of renewable energy has become the main focus among related industries. It becomes clear that manufacturers that are able to set foot in both fields and provide comprehensive solutions will be the most advantaged.

As for the spot market, price still slowly declined in the Chinese market; silicon wafer price declined (due to the Labor Day holiday and the strong hesitation in the market) while cell and module price stayed flat. As for USD quotes, due to the reduced demands, polysilicon price continued to drop. On the other hand, Mono c-Si wafer manufacturers started to reduce price due to the decreased demands in May, thus this week’s Mono c-Si and Multi c-Si wafer price both declined. Module price increased due to the price increase of several non-Chinese made. 

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