Advanced Energy Strengthens Competitive Postition with REFUsol
The below is IHS’ solar analyst team’s assessment of U.S.-based Advanced Energy’s acquisition of German supplier REFUsol.
Advanced Energy’s acquisition of REFUsol is a strategic move to gain presence in core European markets, and further develop its product offerings as well as mitigating against the risk of small 3-phase inverters eroding its position in commercial installations.
Strengthens Competitive Position – Expands Outside of North America
Advanced Energy has made huge progress in recent years, becoming one of the dominant suppliers in the rapidly growing North American market, following its 2010 acquisition of PV Powered. Having only entered the PV inverter business in late 2007, it has rapidly expanded its position to become the world’s fourth largest supplier in 2012, despite its business being largely limited to North America. In contrast, REFUsol’s business has been largely focused on Europe, where it has consistently held a top ten position in recent years. In 2012, IHS estimates that REFUsol was the sixth largest inverter supplier to the European market. The combination of the two companies’ 2012 businesses would make them the third largest PV inverter supplier in the world with strong positions in Europe and Americas. However, despite ongoing consolidation in the PV inverter market, the supplier base remains relatively fragmented and the combined global market share of the two companies, based on 2012 revenues, will be just over 5%.
Broadens Product Offering
Both Advanced Energy and REFUsol have been strongly focused on the commercial sectors of the PV markets in the their respective regions. The commercial market has historically been a very important segment in Europe and is forecast to account for an increasing share of the Americas market in the coming years.
Whilst REFUsol was very quick to develop 3-phase string inverters which revolutionize inverter architectures in commercial PV systems and took massive share away from central inverters, Advanced Energy has been very slow to pick up on this trend and prior to the acquisition did not have any 3-phase string inverters, despite these products making strong advances in the North America market, as they had done in Europe in the past two years. IHS predicts that annual global shipments of 3-phase string inverters will double in the next four years.
Future Challenges Still Exist
Although the combination of the two companies certainly places Advanced Energy in a strong competitive position in Europe and Americas with a portfolio of products well suited for growth, neither of the suppliers have yet made a significant impact in the Asian market. Driven by dramatic growth in China and Japan, both notoriously difficult for international suppliers to penetrate, Asia is forecast to be the fastest growing region for PV in the next five years and will account for almost over 40% of global demand for PV inverters in 2013. Advanced Energy will undoubtedly see upside from European markets as a result of this acquisition and an expanded product line in North America, but it remains to be seen how this acquisition will help it make advances in emerging markets.
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