Asia Challenges Germany’s Hold on Solar Inverter Market
Asian solar inverter components cost less than half the cost of German resulting in significant profit challenge faced by German inverter manufacturers
60 percent of the ‘Top Ten’ solar inverters sold worldwide are of German manufacture, but despite this, Photon International magazine reports that German solar inverter manufacturers are facing stiff competition from their Asian counterparts. The main issue is the cost of solar inverter components.
A recent Photon Lab press release compared component costs for Korean-owned Dasstech’s Soleaf DSP-123KH solar inverter and the average component costs reported by German SMA Solar Technology AG. Dasstech came in at about $220.00 for a 3.3 kW inverter. This is less than half the cost of solar inverter manufacturing leader SMA’s average component costs for a similar device.
The disparity in inverter component cost results in a significant profit challenge faced by German inverter manufacturers. The average price of a 3kW solar inverter is about $0.33 to $0.52 per watt. This ends up being approximately five to eight times more than what Dasstech pays in component costs, netting Dasstech a tidy profit. With a far lower profit margin, German solar inverter manufacturers have to make some tough decisions. To retain their hold on the worldwide solar inverter market, German companies may need to look at redesigning their products to reduce costs.