Inverter is the “heart” and “brain” of photovoltaic power generation, and the direct material cost accounts for the highest proportion. Photovoltaic inverter is a power electronic device connecting Cecep Solar Energy Co.Ltd(000591) battery board and power grid. In addition to converting the DC generated by the battery board into AC that can be connected to the grid through the power module, it also carries the needs of intelligent applications such as information acquisition, power station monitoring, manual interaction and so on. The upstream of the inverter includes electronic components, structural parts and auxiliary materials. Direct materials are the main cost, accounting for about 85% of the total cost; Downstream covers end users, system integrators, EPC contractors and installers.
Inverter has the characteristics of light assets + high turnover + high roe, with technology + brand + channel as the core competitiveness. From the perspective of industry characteristics, compared with other links of the industrial chain, it has the characteristics of light assets, high turnover and high roe. From the perspective of industry core competitiveness, 1) inverter production has high requirements for hardware and software, and enterprises need to continuously develop and launch new products to meet the needs of all ends, with high technical barriers; 2) The inverter is located in the middle and lower reaches of the photovoltaic industry chain and close to the end customers. It has strong TOC attribute. Brand + channel is the core competitiveness of the enterprise.
The demand for new + replacement drives the demand for inverters to improve. In 2025, the market scale of photovoltaic inverters will reach 67.5 billion yuan. New demand: 1) the process of global carbon neutralization is accelerated, and clean energy is the general trend; 2) The cost of photovoltaic power generation decreased, and the global photovoltaic lcoe decreased by 85% from US $0.381/kwh in 2010 to US $0.057/kwh in 2020. According to Irena’s prediction, the global photovoltaic lcoe will drop to US $0.04/kwh in 2022, which will be lower than the cost of coal-fired power generation. Carbon neutralization background + economic improvement: the new installed capacity of two wheel drive global PV increased from 17.5gw in 2010 to 125.8gw in 2020, and the CAGR reached 22%. Replacement demand: the service life of inverter is generally about 10 years. In the future, the replacement demand of global stock inverter will enter a high growth stage. We predict that the global PV inverter market will reach 67.5 billion yuan in 2025.
Energy storage opens the second growth pole of the industry, and the market scale of energy storage inverter will reach 18.1 billion yuan in 2025. Energy storage is of great significance to the utilization of new energy and is an important link in the energy revolution. Energy storage inverter can control the charging and discharging process of energy storage battery pack and carry out AC / DC conversion. It is a necessary link of energy storage system, accounting for about 15% of the cost of energy storage system. In the short term, the upward trend of energy storage capacity is mainly driven by national policies. In the medium and long term, renewable energy power generation is intermittent, and equipped with energy storage system is the inevitable development direction. The driving factors of the industry will gradually transition from policy to economic improvement. We predict that the global energy storage inverter market will reach 18.1 billion yuan in 2025.
The industry concentration has been improved, and product quality + high cost performance + channel construction drive China’s leaders to speed up going to sea. The market share of global inverter CR10 has increased from 55% in 2013 to 80% in 2020. In 2020, a total of 6 Chinese enterprises were listed as the “top 10 global inverter manufacturers”, with a total market share of 60%, year-on-year + 11pct, and has become a major Inverter Manufacturer. It is an industry development trend for China’s leading enterprises to accelerate going to sea, which mainly benefits from 1) product quality: the performance of domestic inverters has been close to the foreign level, and some even exceed the foreign products; 2) Cost performance: the average single watt cost of domestic inverter is significantly lower than that of overseas inverter, mainly due to the low labor and manufacturing cost in China, and most raw materials have been localized; 3) Channel: Chinese manufacturers actively layout overseas markets and help them go to sea.
Investment advice
Under the dual wheel drive of photovoltaic + energy storage, the prosperity of the inverter industry is rising. The related objects of the inverter include: the absolute leader of global inverter Sungrow Power Supply Co.Ltd(300274) , the leader of series inverter Ginlong Technologies Co.Ltd(300763) , and the leader of layout photovoltaic + energy storage inverter Jiangsu Goodwe Power Supply Technology Co.Ltd(688390) .
Risk tips
The installed demand of photovoltaic and energy storage is lower than expected; The policy promotion was less than expected.
