Solar Inverters

What it is

A solar inverter (光伏逆变器) turns the direct current from solar modules into alternating current that meets the grid's power quality rules. Central inverters take many strings of modules into one large unit and suit utility-scale plants; string inverters track one to four strings each, are smaller, and are used mainly on rooftops but also in large plants (Sungrow 2026 interim report, p. 6). Sungrow's range runs from 0.45 kW to 9,600 kW (p. 11), and Sineng Electric's from 3 kW string units to central inverters of up to 9,600 kW with conversion efficiency above 99% (Sineng 2026 interim report, p. 9). The switching inside is done by power semiconductors; StarPower cites solar and storage among the markets driving its demand (StarPower 2026 interim report, p. 10).

Why it matters for the chain

The inverter connects the modules to the grid, and Sungrow calls it key to a plant's long-term reliability and returns (Sungrow p. 11). Lenders check it as well as the modules: Sungrow says it again topped BloombergNEF's 2026 inverter bankability ranking at 100% (p. 12), and Sineng has been on BNEF's Tier 1 list of inverter makers since 2023 (Sineng p. 19). The same power electronics go into storage converters, which is why the leading inverter makers are also leaders in storage.

Where China stands

Wood Mackenzie data cited by the IEA's photovoltaic programme put worldwide inverter shipments at 589 GW in 2024, with Huawei and Sungrow together holding more than 55% of the market, and global capacity above 1 TW a year by early 2025 (IEA PVPS Task 1, October 2025, p. 18). The listed Chinese makers:

• Sungrow (阳光电源, 300274.SZ) sold ¥12.39bn of solar inverters and other power conversion equipment in the first half of 2026, and has 50 GW a year of inverter capacity outside China (Sungrow pp. 29, 34).
• Sineng Electric (上能电气, 300827.SZ) says S&P Global ranked it third in the world by inverter shipments in 2025, and in the top ten for 13 years. Its inverter revenue rose 39.36% to ¥2.20bn, and 60.52% of its revenue now comes from abroad, up 77.04% (Sineng pp. 18, 21, 22).
• Kehua Data (科华数据, 002335.SZ) says it had shipped more than 68 GW of solar products worldwide by the end of 2025, and launched a 465 kW string inverter in the half (Kehua 2026 interim report, pp. 13, 14).

Huawei is not profiled here.

Economics

Inverters are the best-paid stage on the solar map:

• Sungrow's solar inverters and other power conversion equipment earned a gross margin of 42.72%, up 6.98 points, even as their revenue fell 19.17% (Sungrow p. 34).
• Sineng's inverters earned 23.27%, up 1.21 points (Sineng p. 21).
• Kehua's new energy segment, solar and storage together, earned 21.81% (Kehua p. 18).

Over the same half, the large module makers earned between about -2% and 3% on their solar products (see solar modules).

What to watch

• Demand. Sungrow cites third-party data putting global solar installations at 177 GWac in the first half of 2026, down 43% (Sungrow p. 11).
• Overseas growth. Sineng's overseas revenue rose 77.04% while its sales in mainland China fell 6.55% (Sineng p. 22).
• Storage. Storage systems were half of Sungrow's revenue in the half, against about 40% for its inverter segment (Sungrow p. 35).

Our view: inverter capacity is also far above demand, so overcapacity alone does not explain the module makers' losses. Inverters keep their margin because they are electronics and software rather than commodity material, are judged on reliability and grid behaviour as much as price, and come mostly from two makers that can sell the same technology into storage.