Photovoltaic "money printing machine"

When the tide recedes, investors not only see who's swimming naked, but also who truly holds the title of "photovoltaic giant." Recently, Sungrow Power Supply delivered another impressive financial report: in the first half of 2025 , revenue reached 43.533 billion yuan, a year-on-year increase of 40.34% , and net profit attributable to the parent company reached 7.735 billion yuan, a year-on-year increase of 55.97% . The company also distributed a generous 1.95 billion yuan in dividends.

This is reflected in the stock price, which has risen by over 30% in the past two weeks , bringing it within 20% of its 2021 high . Its total market capitalization has also returned to the 200 billion yuan mark, further solidifying Sungrow's position as a leading photovoltaic company. An investor commented on a financial forum: " Despite the recent downturn in the photovoltaic and related industries, Sungrow's performance has maintained rapid and stable growth. This is its greatest strength. "

In fact, it's not just Sungrow that's proving impressive, but the entire inverter industry. According to Sobi Photovoltaic Network, in the first half of 2025 , 11 photovoltaic inverter companies achieved combined operating revenue of 95.807 billion yuan, a year-on-year increase of 20.41% , and a combined net profit attributable to parent companies of 13.175 billion yuan, a year-on-year increase of 42.94% .

Among them, a total of 8 companies achieved profit growth, with the largest increase being 70.96% for Solis Technology and 56.79% for Hopewind Electric . Due to its large performance base, Sungrow Power Supply "only" ranked third.

In terms of profitability, a total of six companies have gross profit margins exceeding 30% , with Deye Co., Ltd. and Jinlong Technology exceeding 35% ; the gross profit margins of the remaining five companies are mostly over 20% .

The inverter is a photovoltaic "money printing machine".

Strong moat

As the heart of a photovoltaic power generation system , the inverter not only carries the heavy responsibility of converting direct current (DC) to alternating current (AC), but its stability and reliability are also directly related to the smooth operation of the photovoltaic power generation system. If power plant owners choose inferior inverters, they could suffer losses in power generation and a lower return on investment, or even fire accidents, ultimately resulting in a complete loss of their investment.

Therefore, when selecting inverters, power station owners place particular emphasis on the inverter manufacturer's brand reputation. This brand loyalty creates a significant moat, making it difficult for new entrants to enter. This explains why, during the recent surge in PV crossovers, few new players entered the inverter market. This stable market structure also ensures relatively stable operating performance for inverter companies, allowing them to profit as long as demand grows.

Of course, stability doesn't mean you can just sit back and relax. The foundation of a brand's moat is its technological prowess, product strength, and service capabilities.

Similar to solar panels, the inverter's conversion efficiency directly impacts the return on investment of a photovoltaic power plant. This refers to how much of the AC power generated by the panels can be converted into the DC power required by the grid. The more conversion efficiency, the higher the profit for the power plant owner. According to financial reports, high-performing companies like Sungrow and Ginlong Technology have achieved maximum conversion efficiencies exceeding 99% , a testament to their technological R&D strengths.

Power plant safety, a key concern for PV owners, also requires the support of technological research and development. For example, DC arcing, a common problem in PV systems, requires the inverter to react quickly within milliseconds to avoid potential fire risks. So, how does the inverter react? This requires the use of AI technology, enabling it to sense, make decisions, and execute. In its financial report, Sungrow Power Supply disclosed that its products now have real-time detection capabilities for DC series and parallel arcing.

In addition to technological research and development, market insight is equally important in demonstrating product strength. Overseas markets often account for at least half of inverter companies' revenue structure, but market demand varies significantly across regions. For example, economically developed regions like Europe and Australia are less price sensitive, while economically underdeveloped regions like South Africa and Pakistan, which have emerged in recent years, prefer durable, low-priced products. Differences in demand lead to distinct product positioning. The efficient, rapid, and targeted launch of products tailored to different market demands demonstrates the "internal strength" of inverter companies.

In its financial report, Solis Technology noted: " Demand has rebounded in the European market following destocking. Emerging markets in Asia, Africa, and Latin America are experiencing growing demand for photovoltaic installations, driven by solar-storage parity and policy support, providing market space for the company's performance growth. "

Beyond technological and product strength, service capabilities are also reflected in a global marketing strategy. During the inverter's long service life, inverter manufacturers must maintain their service capabilities. Currently, leading inverter manufacturers have established increasingly comprehensive global marketing strategies. For example, Ginlong Technology has sales and service offices in Europe, Australia, Southeast Asia, the United States, and Latin America . When a brand is right at their doorstep, it's easy to predict which brand a customer will choose.

In the face of fierce market competition, product sales and profitability are maintained for a reason. This brand moat is one of the core reasons why photovoltaic cross-border players dare not show off their skills in front of inverter giants.

Large-scale energy storage

With a solid moat as a guarantee, it is easier for inverter companies to "print" money.

Data shows that in the first half of 2025 , global photovoltaic installations reached 310 GW , a 60% year-on-year increase . According to the " 2025-2030 Global and Chinese Inverter Industry Market Status Research and Development Prospects Analysis Report , " the global inverter market is projected to reach 66.3 billion yuan in 2025 , with shipments expected to grow to 570 GW .

Specifically, destocking efforts in Europe are nearing completion. Coupled with policy support from countries like Germany, the UK, Austria, and Spain, as well as falling prices for residential inverters, market demand has rebounded significantly. According to the latest data from the General Administration of Customs, inverter exports to Europe reached 888,300 units and RMB 2.831 billion in July , respectively, representing month-over-month growth of 6.66% and 15.7% .

The residential energy storage market, in particular, is experiencing increasing prosperity thanks to policy support. For example, Germany has mandated that electricity suppliers offer dynamic electricity pricing packages to all users (including businesses and residents) since this year. This has expanded the scope for peak-valley arbitrage, providing greater opportunities for energy storage systems to capitalize on the price differential between peak and valley prices.

This is reflected in the semiannual reports of several inverter companies. According to the financial reports, Sungrow's energy storage system business grew by 127.78% year-on-year in the first half of 2025 , with its share of total revenue increasing from 25.20% in the same period last year to 40.89% . Meanwhile, Ginlong Technology's energy storage inverter business grew by 313.51% year-on-year, with its share of total revenue increasing from 5.72% in the same period last year to 20.91% .

Now let's look at emerging markets. According to Deye Shares' financial report, demand for solar-plus-storage has remained strong in countries like Pakistan, Nigeria, and Ukraine, where weak power infrastructure has led to tight power supply, high electricity prices, and post-war reconstruction efforts . Meanwhile , countries like Egypt are accelerating their energy transition . Deye Shares also stated in its financial report that it is focused on exploring application scenarios in emerging markets and has released a new off-grid energy storage model , a 3.6-6kW single-phase off-grid inverter .

With Europe's recovery and the rise of emerging economies, coupled with the rapid growth of energy storage inverters due to the deep integration of photovoltaics and energy storage, it is difficult for inverter companies with solid moats not to make money.