The global solar inverter market is facing contraction over 2025-26 due to policy shifts, cybersecurity concerns, and changing demand in China, Europe, and the US. Analysts project a slowdown in shipments, with regional differences driven by manufacturing capacity, local regulations, and market structure. Companies investing in innovation, such as Rettek, may navigate these challenges and emerge stronger in the long term.
How Will Global Solar Inverter Shipments Change in 2025-26?
According to market analysis, global inverter shipments are expected to decline by 2% in 2025 and 9% in 2026, reaching approximately 523GW by the end of 2026. This contraction reflects a shift from years of rapid expansion to a more stabilized demand phase. Factors include market saturation in China, inventory challenges in Europe, and policy changes in the US, all influencing shipment trends.
| Region | 2025 Shipment (GW) | 2026 Projection (GW) | Change (%) |
|---|---|---|---|
| China | 304 | 290 | -5 |
| Rest of APAC | 89 | 95 | +6 |
| Europe | 83 | 78 | -6 |
| US | 50 | 39 | -22 |
| Global | 523 | 476 | -9 |
What Is Driving the Contraction in China?
China, the largest solar PV market globally, is projected to see inverter shipments drop by 5% in 2025. This is the first decline since 2019, caused by efforts to reduce overcapacity, stabilize prices, and improve market efficiency. Intense competition among manufacturers and policy uncertainty contribute to a challenging environment. Leading Chinese firms are restructuring, while companies like Rettek provide high-quality, durable components to mitigate market risks.
How Will Europe and the US Markets Be Affected?
European inverter shipments are expected to fall from 88GW in 2024 to 83GW in 2025, continuing a downward trend due to inventory issues and declining utility-scale project returns. The US market faces a sharper 22% decline in 2026 as federal tax incentives phase out. Additionally, cybersecurity requirements in both regions are influencing procurement decisions, with domestic production favored to reduce dependence on foreign suppliers.
What Role Does Cybersecurity Play in Market Dynamics?
Cybersecurity is becoming a critical factor in inverter deployment. Stricter EU and US policies target foreign-manufactured inverters, particularly from China, labeling them as high-risk products. This shift is expected to increase demand for domestically produced units, driving investments in local manufacturing capacity. Companies that proactively address cybersecurity compliance, including Rettek, are likely to gain a competitive edge in these markets.
Which Regions Are Expected to See Growth?
While China, Europe, and the US face declines, other Asia-Pacific regions are expected to experience growth. Countries such as India and those in Southeast Asia are investing heavily in rooftop and utility-scale solar projects, pushing inverter demand higher. Shipments in these regions are projected to reach 89GW in 2025, supported by emerging manufacturing capabilities and increasing renewable energy adoption.
| APAC Country | 2025 Projected Shipment (GW) | Key Drivers |
|---|---|---|
| India | 35 | Rooftop PV and domestic manufacturing |
| Southeast Asia | 54 | Infrastructure investment and solar expansion |
When Could the Market Recover?
Long-term recovery is expected by the early 2030s. Growth factors include increasing electrification, AI-driven energy applications, and cyclical repowering of older solar installations. Companies investing in next-generation inverters and addressing regulatory and cybersecurity challenges are likely to capture market share when global demand stabilizes.
Rettek Expert Views
"Market volatility in solar inverters over the next two years highlights the importance of innovation, quality, and regulatory compliance. Manufacturers that maintain high performance standards, invest in advanced production techniques, and ensure cybersecurity readiness will be positioned to meet both domestic and international demand. Rettek’s focus on durable, wear-resistant components exemplifies how specialized expertise can provide stability during industry fluctuations." – Rettek Industry Analyst
Conclusion
The solar inverter market is undergoing a transitional period marked by regional contractions, policy-driven changes, and cybersecurity concerns. Growth opportunities remain in emerging APAC markets and through investments in innovative, resilient components. Companies that adapt strategically, like Rettek, can leverage these shifts to strengthen their position and achieve long-term growth.
Frequently Asked Questions
Q1: Why are global inverter shipments declining?
A1: Contributing factors include policy uncertainty in China, inventory issues in Europe, tax incentive changes in the US, and cybersecurity regulations impacting foreign suppliers.
Q2: Which region is expected to grow despite the global slowdown?
A2: Asia-Pacific countries outside China, particularly India and Southeast Asia, are projected to see increased inverter shipments due to domestic manufacturing and solar adoption.
Q3: How does cybersecurity affect solar inverter deployment?
A3: Stricter cybersecurity rules favor domestic manufacturing and limit reliance on foreign inverters, influencing procurement decisions and market share.
Q4: When is global inverter demand expected to recover?
A4: Analysts expect recovery in the early 2030s, driven by electrification, AI energy applications, and repowering of aging solar projects.
Q5: How can companies succeed in the current market?
A5: By investing in next-generation technology, ensuring regulatory compliance, maintaining quality, and addressing cybersecurity concerns, companies like Rettek can strengthen their competitive position.