Advanced Energy Industries, Inc. (Fort Collins, Colorado, US), on June 29th, 2015 announced that it has made a strategic decision to focus solely on its precision power business and wind down its solar photovoltaic (PV) inverter business, which is operated under AE Solar Energy Inc., AEI Power GmbH and their subsidiaries.
“Following on the heels of a strong 2014 and first quarter 2015 in Precision Power that reinforced the strength of our business model, and after an extensive strategic process over the last six months, we concluded that focusing solely on our Precision Power business, and exiting the solar inverter business aligns with our long-term goal of maximizing value for our shareholders,” said Yuval Wasserman, President and CEO of Advanced Energy.
Sales discussions with third parties in vain
Over the past six months the company has engaged in a rigorous process exploring and evaluating various strategic alternatives for the solar inverter business, including a potential sale, joint venture, partnership, spin-off, licensing and other alternatives, Advanced Energy notes.
“To date, strategic discussions with third parties regarding the sale of the entire business have not provided sufficient value and terms that were in the best interest of our shareholders, customers, employees and partners,” reads the press release.
“Therefore, the company has made the decision to wind down the Solar Inverter business.”
The company anticipates an orderly wind down of the Solar Inverter business, with AE Solar Energy Inc., AEI Power GmbH and their subsidiaries supporting their customers, the installed base and fulfilling customer purchase orders on hand, reads the press release.
IHS Analysis: AE’s exit from the inverter market represents a huge opportunity for leading suppliers
Given Advanced Energy’s huge after-sales service network, large installed base of central inverters, leading brand awareness amongst EPCs and its early presence in the operations and maintenance (O&M) business which is a high growth area presently, it is surprising that the business will be wound down, rather than acquired, comments Cormac Gilligan, Senior PV Market Analyst, IHS Technology.
While its market share in utility-scale may have diminished due to competitors offering newer products or more competitive prices, it is a rare occurrence that a supplier exits a booming market when there still is a huge opportunity. IHS forecasts that 12 GW of inverters will be shipped in 2015 and 2016 in the United States and this represents a huge opportunity.
“With its exit from the market, it will leave a large void in the commercial and utility-scale inverter market in the United States,” Gilligan notes.
“This represents a huge opportunity for leading suppliers such as ABB and Schneider Electric or for recent market entrants such as TMEIC or Power Electronics to grow their presence. Equally, Chinese inverters suppliers such as Sungrow, TBEA and Huawei may recognise this as their opportunity to build their presence in the market and persuade EPCs of their capabilities.