Evidence that the solar inverter market has become overcrowded in certain key PV markets such as Germany is growing following Solutronic's recent announcement of insolvency.

Due to the high concentration of inverter suppliers in Germany, and a rapid decrease in inverter shipments from over 9 GW in 2010 to just 4 GW in 2013, inverter prices have decreased by over 40% since 2010 as inverter suppliers compete in a shrinking domestic market.

Although, numerous German inverter suppliers have expanded outside of their domestic market into growth inverter markets such as the UK, USA and South Africa, the pace of expansion has been in some instances too slow to compensate for the German market's contraction, with revenues decreasing from $2.7 billion in 2010 to $0.7 billion in 2013 according to our latest forecast.

Even suppliers such as Solutronic who were early market entrants in promoting new advanced technologies such as energy storage were not able to withstand the aggressive price reductions.

IHS forecasts that inverter price pressure will continue for the remainder of 2013 in Germany with average inverter prices forecast to reach $0.19 per watt which will continue to strain the revenue streams of suppliers that are heavily dependent on the German market.

Demand from Germany is forecast to resume growth once again in 2014, but with inverter prices forecast to decrease further still, the only respite for inverter suppliers will be in international PV markets or if consolidation occurs.