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Rising awareness boosts APAC inverter market for renewable energy systems | Asia Pacific

Rising awareness boosts APAC inverter market for renewable energy systems

Government initiatives have fuelled growth in the Asia Pacific inverter market for renewable energy systems, and the market is poised to grow at a compound annual growth rate (CAGR) of 14.5 per cent from 2010 to 2017. Rising awareness of climate change and Kyoto Protocol commitments have pushed policy makers and governments across the world to explore viable alternatives.

As the reserves of conventional fossil fuels diminish steadily, the attraction quotient of renewable energy has been enhanced considerably. Countries in the region are taking measures to cope with the high oil prices and developing clean energy, such as photovoltaic and wind energy, to reduce reliance on imported oil as well as curb greenhouse gas emissions.

Currently, incentives and government policies indirectly control the demand for inverter products used in renewable energy systems. Although inverters form a critical function in these systems, the expansion of the installation base of renewable energy systems directly drives their uptake.

New analysis from Frost & Sullivan finds that the market earned revenues of US$886.0 million in 2010 and estimates this to reach US$2,292.1 million in 2017.

?Participants in the renewable inverter market are unable to directly influence overall demand as no amount of technology development or price reduction can translate into increased demand,? says Frost & Sullivan Research Analyst Merilyn Eng. ?However, it helps in building competitive advantage.?

Although the market has been progressing steadily, there are some aspects clouding its landscape. The lack of credits has delayed solar power plant completion. Credit plays an important role in the installation of solar power plant projects. Confronted with the fund crunch, some developing countries are unable to build solar power plants and those under construction are facing completion delays.

?Though the impact of the recent global economic crisis is still lingering in the region, this challenge is expected to ease as financial institutions such as the Asian Development Bank (ADB) step in to provide loans, grants, and technical assistance,? says Eng. ?Thus, a spike in demand for renewable energy system inverter products is anticipated in the near future.?

Another impediment is the absence of a holistic policy of renewable energy that benefits all parties. For instance, the policy issued in Thailand in 2005 set a target to replace 8.0 per cent of total energy with renewable energy by 2011. In the Fifteen Year Renewable Energy Development Plan issued in 2008, the target was adjusted to replacing 20.0 per cent of energy by 2022. The government in Vietnam should work on the general Renewable Energy Law to provide a clear legal framework and incentives on the renewable energy sector.

Trends in this market indicate polarized preferences for inverter products. For products used on photovoltaic farms that are under government funding or are being funded by international organizations or other institutional investors, quality is a primary issue. For products used on distributed systems sold through individual sales to solve remote power shortage issues, price is the foremost concern. This divergence is expected to decrease eventually when the share of low-end products gradually reduces and the more organized uptake of photovoltaic and wind energy systems gathers momentum.
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Posted by Gloria Llopis | 2011-09-21