The efficiency and reliability of solar power systems heavily depend on the quality of its components. Solar inverters are one of the key components and perform an important function in PV systems by converting direct current (DC) electricity generated by solar panels into alternating current (AC) suitable for grid integration or direct power supply. The exponential growth of the solar industry over the past decade has driven significant advancements in inverter technology, leading to improved efficiency, reliability, cost-effectiveness and integration capabilities. Solar inverter manufacturers are constantly working to improve the efficiency of their products. As solar panel efficiency continues to increase, the demand for inverters that can keep pace has driven advancements in inverter technology. This article provides an overview of the key technology trends shaping the solar inverter market…

Grid-connected solar inverters

These inverters feed power from solar PV systems into the grid by matching the inverter supply voltage with grid voltage, ensuring synchronised current and voltage phases. According to CLASP, these systems incorporate anti-islanding protection, a mandatory safety feature that prevents electrical hazards by shutting down power supply during grid interruptions. Additionally, they can transmit excess electricity to the utility grid through bi-directional meters. Grid-connected solar inverters are further classified based on rated capacity (kW) into three types. Traditionally, central inverters have been used in the solar space, which are large outdoor units capable of handling high power conversion and require significant physical space. In the grid-connected space, two new inverter technologies are now being used by the industry – micro and string inverters.

Micro inverters convert energy at the individual solar panel level. They maximize energy production from each panel and provide maximum redundancy by mitigating shading and soiling issues. If one panel is affected, only the output of the microinverter attached to that panel will be impacted. While their upfront costs are higher, they enhance energy harvesting by minimising shading effects and improving system reliability, making them ideal for complex installations.

String inverters convert the output of one string of PV panels into AC power. String inverters provide modularisation and redundancy compared to central designs, allowing for backup inverter capacity. This means that if one inverter fails, the PV system can continue functioning. These allow the PV array to be divided into multiple smaller sub-arrays, improving reliability. Multi-phase string inverters were later introduced to handle multiple strings across different phases.

Standalone/off-grid inverters

These inverters are also known as battery inverters and are specifically designed for remote applications or off-grid power systems with battery backup. These systems draw DC power from batteries charged by PV arrays and convert it into AC power, making them ideal for areas with limited grid access or frequent interruptions. They come in variants with and without storage  capabilities.

Hybrid inverters

Hybrid inverters combine the functionalities of grid-connected and standalone systems with integrated battery storage. These inverters allow solar systems to integrate both solar power and battery storage. The hybrid inverter optimises the flow of energy by directing solar power to batteries, which can then supply energy during periods of low sunlight or when power demand is high. As the demand for energy storage solutions increases, hybrid solar inverters have become a key player in both off-grid and grid-tied systems alike. This trend is expected to grow further as the cost of batteries continues to fall, making solar-plus-storage systems more accessible.

Smart inverters and advanced monitoring systems

Smart inverters enable real-time communication between the inverter, solar panels, batteries and the utility grid. These inverters can optimise performance by automatically adjusting to varying sunlight conditions and grid demands. They also provide detailed data and insights through mobile apps or cloud-based platforms, helping users and installers monitor system performance, identify issues and perform maintenance remotely. A smart inverter can generate an alarm or warning, which enables the plant operator to address the fault before it can become permanent. The data collected by smart inverters can also be used to improve grid stability. For instance, modern inverters can actively manage voltage and frequency regulation in response to changes in power generation or consumption, thereby supporting grid operators in balancing supply and demand. These inverters have the ability to supply reactive power both during the day and night.

Another smart technology in the solar inverter space is the uptake of maximum power point tracking (MPPT). According to CLASP, MPPT is a built-in algorithm that extracts the maximum available power from PV modules under varying conditions by monitoring and adjusting to the maximum power point voltage. The system continuously measures panel output against battery voltage to optimise power generation. MPPT technology offers numerous advantages, including optimised solar panel output through constant monitoring and adjustment of electrical operating points based on environmental conditions. It enhances energy output through continuous tracking, provides dynamic voltage and current adjustments, ensures compatibility with inverter inputs, improves overall system performance, mitigates partial shading effects and increases energy efficiency in grid-tied systems.

Market trends and future outlook

According to the report “Market Assessment Study of Grid-Connected Solar Inverters Under the Standards and Labeling Program” by CLASP, grid-connected solar inverters without storage dominate with an 80 per cent market share, followed by off-grid and hybrid variants. The solar inverter market is projected to reach Rs 93.52 billion by 2026, growing at a compound annual growth rate of 14.4 per cent from 2020 to 2026. Single-phase inverters predominate in the up to 5 kW solar plant segment, while three-phase inverters command approximately 60 per cent of the market in higher capacity installations.

Recent trends show a shift towards modular, flexible and standardised designs, with emerging modular micro inverters eliminating single point of failure risks through a distributed approach. Modern inverters increasingly incorporate smart communication capabilities, enabling  remote monitoring, control and trouble-shooting through cloud-based platforms. Going forward, the integration of artificial intelligence and machine learning will further enhance diagnostic capabilities and operational efficiency.

Recent developments and innovations in inverter architecture have resulted in higher efficiency levels and better heat management. These improvements allow inverters to handle more power with smaller and more compact designs, reducing both space and installation costs. Earlier, solar inverters utilised bulky line frequency transformers to provide electrical isolation and step up the DC voltage. However, transformer-less inverter topologies have been introduced to reduce size, weight and materials. They use advanced control techniques and silicon carbide switching devices to safely isolate the DC and AC sides.

The integration of smart technology in solar inverters is transforming the way solar power systems are monitored and managed. Inverters are evolving from simply converting DC to AC to performing advanced grid support functions that enable greater penetration of renewables into the grid. These devices are no longer just power conversion units but are evolving into intelligent energy management systems. From hybrid inverters that combine solar generation with energy storage to smart inverters that enable real-time monitoring and optimisation, these innovations are transforming the way solar power is harnessed and managed. The growing adoption of microinverters and higher efficiency designs, and the integration with electric vehicle charging and microgrids further highlight the potential of solar inverters.

As the solar sector expands its energy share, inverters will play a crucial role in maintaining grid stability, integrating storage solutions and enabling decentralised energy distribution. Continued innovations in customisation and digitalisation are expected going forward.

Originally carried in Renewable Watch, a sister concern of REGlobal.