Wood Mackenzie predicts 2-year decline in global solar inverter demand

Wood Mackenzie’s latest analysis expects market uncertainty in China, Europe and the U.S. to cause two consecutive years of contraction in the global solar inverter market, forecasting a fall to 577 GWac this year and 523 GWac in 2026.

December 17, 2025 Patrick Jowett

Image: Lauri Veerde, Wikimedia Commons, CC BY-SA 4.0

The global solar inverter market is set to contract over the next two years, according to analysis from Wood Mackenzie.

The consultancy is forecasting the market will fall to 577 GWac in 2025, a 2% year-on-year decrease, followed by a further 9% drop to 523 GWac in 2026.

Wood Mackenzie says the downturn follows record shipments in 2024 and reflects market uncertainty across China, Europe and the United States.

China’s solar inverter market is set to decline 5% in 2025 to 304 GWac, representing the first annual decline in 2019. Nevertheless, the country is still expected to maintain its dominance in the global market, accounting for over 2.9 TWac of cumulative inverter demand through to 2034, according to Wood Mackenzie’s forecasts.

European inverter shipments are on track to drop from 88 GWac to 83 GWac this year, before falling beneath 75 GWac annually by 2032 due to reduced utility-scale capture prices and inventory challenges. In the U.S., the inverter market is expected to drop by 22% next year as Inflation Reduction Act tax credits are phased out.

The Southeast Asian market is one region to buck the downward trend, with the solar inverter market growing to 89 GWac this year, supported by domestic manufacturing investments and emerging rooftop PV segments.

Joe Shangraw, research analyst for Wood Mackenzie, says the solar inverter industry is facing “a period of strategic realignment as manufacturers navigate evolving market dynamics and regulatory frameworks.”

“After years of an exponential rise in solar inverter demand, continuous shipment growth is no longer realistic for even the top global inverter manufacturers,” Shangraw continued. “Instead, vendors will need to adapt to new demand drivers to stay competitive: hybrid solar-plus-storage systems, retrofits and repowering, cybersecurity features, 2000-volt architectures and grid services.”

Shangraw added that cybersecurity concerns in the U.S. and European governments over inverter remote-access capabilities are expected to impact the competitive landscape between domestic and foreign manufacturers.

“We expect the two regions to follow different strategies to address cybersecurity concerns,” Shangraw explained. “Europe is expected to expand upon the Cyber Resilience Act by introducing additional software, reporting, and remote-access requirements that could serve as economic or logistical barriers to foreign manufacturers. Meanwhile, Republican lawmakers in the US are urging the Department of Commerce to implement restrictions on Chinese inverter imports, adding uncertainty to the roadmap for both foreign and domestic manufacturers.”

By the early 2030s, Wood Mackenzie is projecting the solar inverter market to recover and surpass the 2024 market size with electrification, AI demand growth and a cyclical repowering market set to provide a solid foundation for inverter demand. “Companies that navigate the current challenges while investing in next-generation technologies will emerge stronger when the market recovers in the late 2020s,” Shangraw predicted.

In October, London-based analytics firm GlobalData forecast the global solar inverter market will increase to $38.8 billion by the end of the decade, driven by increasing demand for utility-scale projects and hybrid solar-plus-storage systems, as well as stricter grid compliance and cybersecurity regulations.

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