en.Wedoany.com Reported - Global inverter manufacturer SMA Group has announced its exit from the Australian residential and commercial inverter market, citing an inability to compete with Chinese manufacturers on cost. CEO Jürgen Reinert stated that while the company will retain only its large-scale utility business, Australia remains one of its largest markets.
In an interview on the Renew Economy podcast Energy Insiders, Reinert admitted that the company cannot compete with Chinese rivals at any reasonable scale. He noted that SMA has decided to withdraw from the residential and commercial application markets in Australia and several other countries, as this market segment has become relatively small in Australia.
SMA was once an industry pioneer before Chinese photovoltaic manufacturers dominated the global market, holding a 50% market share in inverters at its peak. As Chinese manufacturers drove down costs for modules and inverters, the company faced strategic challenges. Over a decade ago, its revenue shrank by 60%, and it laid off 40% of its engineers.
Despite two consecutive years of losses due to further restructuring, Reinert said the company is heading toward a brighter future. Currently, SMA is focusing on the utility-scale inverter market, with Australia being its third-largest market for this business. SMA is banking on protection in key markets, as governments grow wary of over-reliance on Chinese-made inverters, fearing these critical assets could be maliciously "remote-controlled." In the European Union, EU-funded projects may now be prohibited from using inverters from China, Iran, Russia, and North Korea, with China being a key country.
Currently, about 80% of SMA's revenue comes from utility applications, with only 20% from the residential and commercial markets. Of this, the U.S. market contributes approximately 40-45% of revenue, Europe accounts for 35%, and Australia represents 15-20%.
In Australia, the utility-scale market is primarily based on large-scale solar-plus-storage hybrid systems, which have become the preferred choice for developers due to their low cost and modularity. Meanwhile, grid-forming inverters are gradually emerging as essential tools for the power grid. Reinert stated that grid-forming inverters can provide grid functions previously achieved by coal and gas generators and their rotating equipment, with their success already demonstrated in microgrids, small grids, and island grids.
Reinert noted that inverter-based resources have the ability to build grids, stabilize frequency, and offer more comprehensive grid functions than conventional power plants. He emphasized that through solar, wind, and energy storage, combined with smart energy management and grid functions, the entire grid can be fully powered. This view may be hard to accept for those accustomed to centralized generation and rotating mass, but it is achievable through power electronics.
Other companies such as Tesla and Fluence have expressed similar views. However, Australian grid authorities remain hesitant on the issue of fault current ride-through. While authorities acknowledge the role of grid-forming inverters, transmission companies have ordered dozens of large synchronous condensers, costing billions of dollars. Reinert countered that inverter-based resources can fully achieve fault current ride-through, and it is no longer correct to claim that power electronics cannot do so.
Reinert recalled a quip from former RWE CEO Jürgen Großmann a decade ago, who compared the use and potential of solar energy at the time to growing pineapples in Alaska. In Australia, similarly absurd claims about battery storage were made by former Prime Minister Scott Morrison, who compared Tesla's big battery at Hornsdale to the Big Banana in Coffs Harbour. But Reinert said the solar game still has a long way to go. He noted that module and battery prices have dropped significantly, with the levelized cost of solar now below 2 cents, and adding storage still far below nuclear and coal power. This trend will continue, with prices expected to fall further in the coming years, making the race clearer and unstoppable.
This article is compiled by Wedoany. All AI citations must indicate the source as "Wedoany". If there is any infringement or other issues, please notify us promptly, and we will modify or delete it accordingly. Email: news@wedoany.com
