Grid-forming Inverter Market Size, Share, Analysis

[233 Pages Report] The global Grid-forming inverter market is expected to grow from an estimated USD 680 million in 2023 to USD 1,042 million by 2028, at a CAGR of 8.9% from 2023 to 2028. As the world shifts towards greater adoption of renewable energy sources like solar and wind, the need for grid-forming inverters becomes more pronounced. These inverters play a crucial role in stabilizing the grid and facilitating the smooth integration of intermittent renewable energy into the existing power infrastructure. In regions with underdeveloped or weak grids, grid-forming inverters can provide an effective solution to maintain grid stability and improve power quality.

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Grid-forming Inverter Market Dynamics

Driver: Rising Investment in Renewable Energy Sector

Rising investments in the renewable power sector is a key driver of the grid-forming inverter market. As the world transitions toward a more sustainable energy future, there has been a significant increase in investments in renewable power generation technologies such as solar, wind, and hydropower. These investments are driven by various factors, including the need to reduce greenhouse gas emissions, combat climate change, and enhance energy security.

Grid-forming inverters are crucial in integrating renewable power sources into the electrical grid. Unlike traditional grid-tied inverters that rely on stable grid conditions, grid-forming inverters can autonomously control the electrical grid's frequency and voltage. This enables renewable energy sources to contribute to grid stability and operate in islanded or microgrid configurations

Restraint: More espensive then traditional grid-following inverters

Grid-forming inverters are more complex than grid-following inverters because they need to be able to actively control the grid voltage and frequency. This requires more complex control algorithms and hardware. On the other hand, grid-following inverters only need to be able to track the grid voltage and frequency, which can be done with less complex control algorithms and hardware. Thus, grid-forming inverters are typically more expensive than grid-following inverters because of the extra complexity. The additional cost of grid-forming inverters is justified by the benefits they offer, such as improved stability and reliability of the grid and reduced cost of renewable energy integration.

Opportunity: Rising demand for Elctric Vehicles

The rising demand for electric vehicles (EVs) presents a significant opportunity for the grid-forming inverter market. As EV adoption continues to rise, there is a growing need for efficient charging infrastructure and seamless integration of clean power with the electrical grid. Grid-forming inverters play a crucial role in enabling this integration by enabling bi-directional power flow, allowing EVs to not only consume power from the grid but also inject power back into the grid when necessary. This vehicle-to-grid (V2G) capability enhances the flexibility and resilience of the energy system by utilizing the energy storage capacity of EV batteries. Grid-forming inverters enable EVs to act as distributed energy resources, providing grid support services such as load balancing, frequency regulation, and demand response.

Challenge: Grid codes and regulations to pose challenge for grid-forming inverter deployment

Grid codes are a set of regulations that govern the operation of the grid. They typically specify the requirements for the quality of power being generated, as well as the communication protocols used by inverters. Grid codes can vary from country to country and can be complex and difficult to comply with. In some countries, there are economic incentives for the deployment of grid-forming inverters. These incentives can help offset the cost of deploying grid-forming inverters, and they can also help encourage the development of new grid-forming inverter technologies. However, in other countries, there may be no such economic incentives.

Grid-forming inverter Market Ecosystem

Prominent companies in this market include well-established, financially stable grid-forming inverter manufacturers of market and components. These companies have been operating in the market for several years and possess a diversified product portfolio, state-of-the-art technologies, and strong global sales and marketing networks. Prominent companies in this market include Huawei Technologies Co. Ltd. (China), General Electric (US), SMA Solar Technology (Germany), Games Electric (Spain) and FIMER Group (Italy).

The 50-100 KW segment by  power rating holds the second fastest growing segment in 2022

By power rating, grid-forming inverter market is segmented into below 50 KW, 50-100 KW, Above 100 KW. The increasing adoption of solar PV systems and small to medium-sized wind turbines in commercial and industrial applications has created a demand for grid-forming inverters in the 50-100 kW range. These inverters are essential for efficiently integrating renewable energy into the grid and ensuring grid stability.  Grid-forming inverters in the 50-100 kW range strike a balance between capacity and cost-effectiveness, making them suitable for a wide range of commercial and industrial applications.

Above 500 V segment by Voltage is estimated to be the second fastest segment for grid-forming inverter market

Above 500 V grid forming inverters are commonly used in utility-scale renewable energy projects, such as large solar farms and wind farms. These inverters are capable of handling high power capacities and efficiently integrating the generated electricity into the grid. The market for above 500 V grid-forming inverters was witnessing significant growth due to the increasing adoption of large-scale renewable energy projects and the need for high-capacity inverters to accommodate them.

Solar PV Plants segment by application is estimated to be the largest segment for Grid-forming Inverter market

Solar PV grid-forming inverters are specialized inverters designed to facilitate the integration of solar photovoltaic (PV) systems into the electrical grid while providing grid-forming capabilities. Solar PV grid-forming inverters play a critical role in modern energy systems, particularly in areas with high renewable energy penetration and the development of microgrids and distributed energy resources. They enable the efficient and reliable integration of solar PV power into the grid while contributing to the overall stability and sustainability of the electricity network.

Europe is expected to account for second largest market during the forecast period.

Europe accounted for a 26.1% share of the Grid-forming Inverter market in 2022. The region has been segmented into the Germany, Spain, UK, Netherlands, Italy and rest of europe. The  grid-forming inverters have been gaining traction in Europe, driven by the region's increasing focus on renewable energy integration and grid modernization. Grid-forming inverters are becoming essential components of Europe's evolving energy landscape, supporting the integration of renewable energy sources and enabling grid stability and resilience.

Key Market Players

The market is dominated by a few major players that have a wide regional presence. The major players in the Grid-forming Inverter market are Huawei Technologies Co. Ltd. (China), General Electric (US), SMA Solar Technology (Germany), Games Electric (Spain) and FIMER Group (Italy). Between 2018 and 2022, Strategies such as product launches, contracts, agreements, partnerships, collaborations, alliances, acquisitions, and expansions are followed by these companies to capture a larger share of the market.

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Scope of the Report

This research report categorizes the grid forming inverter market based on type, application,  voltage,  power rating, and  region.

By Type

• Micro Inverter
• String Inverter
• Central Inverter

By Application

• Solar PV Plants
• Wind Power Plants
• Energy Storage Systems
• Electric Vehicles

By Voltage

• 100–300 V
• 300–500 V
• Above 500 V 

By Power Rating

• Below 50 KW 
• 50–100 KW
• Above 100 KW

By Region

• North America
• Asia Pacific
• South America
• Europe
• Middle East & Africa

Recent Developments

• In Mar 2022, Huawei Technology has signed a strategic cooperation agreement with Meienergy Technology Co., Ltd. for providing smart PV and energy storage system for the 1 GW utility PV plant and 500 MWh energy storage system in Ghana which is NA developed by Meienergy.
• In Feb 2022, FIMER made a partnership with Vega Solar to supply 14 PVS-100 inverters, three-phase string solution in Albania. The PVS-100 is FIMER’s cloud connected three-phase string inverter solution for cost efficient decentralized photovoltaic systems for both ground mounted and rooftop applications
• In Oct 2021, SMA solar technology AG (SMA) has been chosen to supply central battery inverters to Australian integrated energy company AGL energy limited for world’s largest grid-forming storage project.

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