Global solar inverter shipments are set to decline for a second consecutive year, reflecting growing uncertainty across major solar markets, according to Wood Mackenzie’s latest 2025 outlook.
The research firm estimates that global inverter demand will fall by 2% to 577 GWac in 2025, followed by a sharper 9% decline to 523 GWac in 2026. The downturn comes after record shipments in 2024 and is attributed to policy uncertainty and slowing installations in key markets such as China, Europe and the United States.
Joe Shangraw, Research Analyst at Wood Mackenzie, said the industry is entering a phase of strategic adjustment after years of rapid expansion. He noted that continuous shipment growth is no longer sustainable, even for leading manufacturers, and that vendors will increasingly need to pivot towards emerging demand drivers such as hybrid solar-plus-storage systems, retrofits and repowering, grid services, cybersecurity features and higher-voltage inverter architectures.
China, the world’s largest inverter market, is expected to see its first decline since 2019, with shipments falling 5% to 304 GWac in 2025. The slowdown reflects near-term policy uncertainty during the transition between China’s 14th and 15th Five-Year Plans. Despite this, China is projected to retain market dominance, with cumulative inverter demand exceeding 2.9 TWac through 2034. In contrast, the Asia Pacific region excluding China is forecast to grow to 89 GWac in 2025, supported by investments in domestic manufacturing and the expansion of rooftop solar markets in India and Southeast Asia.
Europe and the US face differing challenges. European inverter shipments are expected to decline from 88 GWac to 83 GWac in 2025 and fall below 75 GWac annually by 2032, driven by persistent inventory overhangs and lower utility-scale project returns, particularly in markets such as Spain. The US market is projected to reach 47 GWac in 2025 before dropping 22% in 2026 as tax incentives under the Inflation Reduction Act begin to phase out.
Inverter pricing is also under continued pressure across all product segments, largely due to intense competition from Chinese manufacturers and ongoing technological advancements. Wood Mackenzie noted that module-level power electronics prices show strong regional variation, with US prices remaining more than 50% higher than global averages. Meanwhile, hybrid inverter prices fell 13% in 2024 as battery-ready systems became standard offerings among major suppliers. Utility-scale inverter prices are expected to see the steepest declines over the long term, with Chinese domestic string inverters projected to fall below US$0.02/Wac and central inverters nearing US$0.01/Wac by 2034.
The report also highlighted rising cybersecurity concerns surrounding inverter remote-access capabilities, particularly in the US and Europe. Shangraw said stricter policies are expected from 2026, potentially reshaping competition between domestic and foreign manufacturers. Europe is likely to build on the Cyber Resilience Act with tighter software and reporting requirements, while US policymakers are pushing for potential restrictions on Chinese inverter imports.
Despite the near-term slowdown, Wood Mackenzie expects the solar inverter market to recover and surpass its 2024 size in the early 2030s. Electrification, growing electricity demand from artificial intelligence, and a cyclical wave of repowering projects are expected to underpin long-term demand, with manufacturers that invest in next-generation technologies positioned to benefit when the market rebounds.
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