Europe and US-based manufacturers had dominated the photovoltaic (PV) inverter market in the past, leaving very little room for players in Taiwan and China. However, with inverter supply shortage in 2010, it provided Taiwan- and China-based inverter makers an opportunity to ramp up shipments to historical highs, according to Digitimes Research.

With the first-tier players in Europe and the US more than doubled capacity and upstream material supply no longer an issue, the inverter shortage had ended in the third quarter of 2010.

Chinese and Taiwanese inverter makers are tackling the market through two different approaches. Inverters by Taiwan-based makers have been certified by most countries and are superior in quality versus those by Chinese makers, and hence, Taiwanese makers are able to contract manufacture for European and US clients. Since inverters by China-based makers are only certified for the country's concession projects, the companies have gone the own-brand route to develop the vast domestic market.

Though outsource orders to Taiwan makers could dip in 2011, in the long run, as inverter price continues to fall, it is only logical for international vendors to hand manufacturing to Taiwan companies for cost reasons.

For China, the government is actively developing grid-connected concession programs, and subsidies should increase since the solar industry will be targeted during the twelve fifth plan.

Thanks to the government's strong support for the domestic solar market, China's inverter makers will see a rise in shipments for 2011.

Source: company, compiled by Digitimes, January 2010