Grid-Forming Inverters Market Size (2026-2030)

The Grid-Forming Inverters Market was valued at USD 1.83 Billion in 2025 and is projected to reach a market size of USD 5.09 Billion by the end of 2030. Over the forecast period of 2026-2030, the market is projected to grow at a CAGR of 22.7%.

A grid-forming inverter is a power electronic system designed to independently establish and regulate grid characteristics, including voltage and frequency, by emulating the operational behavior of conventional synchronous generators. It serves a vital function in the integration of renewable energy sources such as solar and wind into electrical networks, supporting grid stability during disturbances and facilitating the development of robust microgrids. Grid-forming inverters are capable of dynamically adjusting power output and voltage in response to grid conditions and coordinating with other energy sources to maintain the balance between supply and demand. The increasing global transition toward renewable energy highlights the importance of such technologies, as they enable the reliable integration of variable generation sources while preserving overall grid stability.

Key Market Insights:

Power grids were not initially designed to operate within a rapidly evolving energy landscape, as their tools and operational practices were developed for a slower and more predictable environment. Electrical grids form the backbone of modern energy systems and play a critical role in the energy transition by supporting the integration of renewable energy sources (RES). As global demand for renewable energy continues to rise, large-scale integration of RES into existing power grids becomes necessary; however, this process presents several technical and operational challenges that must be addressed.

Market Drivers:

The increasing demand driven by the evolution of decentralized energy systems is expected to accelerate the growth of the grid-forming inverter market.

Energy storage is becoming increasingly important for managing the variability associated with renewable energy generation, and grid-forming inverters play a critical role in this process. These inverters enable bidirectional power flow, allowing excess energy to be stored during periods of high generation and discharged when demand increases. This coordinated operation enhances grid flexibility, supports peak load management, and contributes to overall system reliability.

The grid-forming inverter market is experiencing rapid growth, largely driven by the transition toward decentralized energy systems. The expansion of rooftop solar installations, community-based energy projects, and microgrids is reducing dependence on centralized power plants. Grid-forming inverters enable these distributed energy resources to operate independently and maintain power supply even during main grid outages. This shift toward decentralization aligns with the growing preference for localized energy control, improved community resilience, and reduced reliance on distant, large-scale generation facilities.

The rapid expansion of solar photovoltaic installations is driving increased demand for grid-forming inverters, supporting the ongoing transition toward clean and sustainable energy systems.

With the anticipated growth in distributed photovoltaic (PV) installations, particularly within the residential sector, demand for grid-forming inverters is expected to increase to support the effective integration of these renewable energy sources into the electricity grid. As households increasingly adopt electricity for heating, cooling, and electric mobility, the requirement for locally embedded power generation will expand, thereby further accelerating the demand for grid-forming inverters.

Market Restraints and Challenges:

The availability of alternative conventional grid-following inverters is expected to restrain the growth of the grid-forming inverter market.

Traditional grid-following inverters have been extensively used for integrating renewable energy sources into electrical grids. These inverters function by aligning their output with the grid’s existing voltage and frequency and adjusting power generation in response to prevailing grid conditions. While they are effective in many applications, conventional grid-following inverters face limitations, particularly in maintaining system stability under high levels of renewable energy penetration or within isolated microgrid environments.

In comparison to grid-forming inverters, grid-following inverters are generally simpler and more cost-effective to deploy. They offer faster implementation and help avoid several technical and regulatory challenges associated with grid-forming technologies, including synchronization, protection coordination, and compliance with evolving standards.

Furthermore, ongoing advancements in grid-following inverter technologies have enhanced their performance and functional capabilities, narrowing the gap between traditional grid-following and grid-forming inverters. Modern grid-following inverters, supported by advanced control algorithms and communication systems, can now deliver certain grid-support functions such as reactive power compensation and voltage regulation, albeit to a limited degree. These improvements are contributing to reduced differentiation and are expected to restrain the growth of the grid-forming inverter market.

Market Opportunities:

Technological advancements in inverter design are creating new growth opportunities within the market.

Technological advancements in inverter design are propelling the growth of the grid-forming inverter market. Recent developments have produced inverters that are more efficient, reliable, and adaptable, capable of managing complex grid conditions with greater precision. Innovations, including advanced control algorithms and enhanced power electronics, are allowing grid-forming inverters to deliver improved voltage and frequency support, which is essential for the seamless integration of renewable energy sources into existing power networks.

GRID-FORMING INVERTERS MARKET REPORT COVERAGE:

Grid-Forming Inverters Market Segmentation:

Grid-Forming Inverters Market Segmentation by Type:

• Single-phase
• Three-phase

Single-phase grid-forming inverters are primarily utilized in residential and small commercial applications, where power requirements are relatively low and the grid configuration is less complex. These inverters are favored for their simplicity, cost efficiency, and ease of installation, making them well-suited for decentralized energy systems, rural electrification initiatives, and small-scale renewable energy projects. The increasing adoption of rooftop solar installations and small microgrids is driving consistent demand for single-phase grid-forming inverters, particularly in emerging markets and rural regions with limited or unreliable grid infrastructure.

In contrast, three-phase grid-forming inverters are designed for medium to large-scale applications, including industrial facilities, commercial buildings, utility-scale renewable energy plants, and extensive microgrids. These inverters provide higher power capacities, advanced grid support functionalities, and enhanced reliability, making them ideal for critical infrastructure and high-demand environments. The growing deployment of commercial and industrial microgrids, utility-scale solar and wind farms, and modernized grid projects is boosting the demand for three-phase grid-forming inverters. Their ability to handle complex load profiles, maintain grid stability under dynamic conditions, and integrate multiple distributed energy resources establishes them as a key component in the evolving power grid landscape.

Grid-Forming Inverters Market Segmentation By Power Rating:

• Low Power
• Medium Power
• High Power

Low-power grid-forming inverters, typically rated below 10 kW, are extensively employed in residential settings, small commercial establishments, and off-grid systems. These inverters are designed to be compact, user-friendly, and cost-effective, making them suitable for households, small businesses, and rural electrification projects. The growing adoption of rooftop solar systems, home energy storage solutions, and small-scale microgrids is driving consistent demand for low-power grid-forming inverters, especially in regions with limited grid access or unstable power supply.

Medium-power grid-forming inverters, generally ranging from 10 kW to 250 kW, serve a wide range of applications, including commercial buildings, mid-sized industrial facilities, community microgrids, and distributed generation projects. These inverters provide an optimal balance of performance, scalability, and cost-efficiency, making them well-suited for medium-scale renewable energy installations, commercial microgrids, and backup power systems. The rising deployment of commercial and industrial distributed energy resources, along with increased investment in community energy initiatives, is driving demand for medium-power grid-forming inverters. Their capability to handle dynamic load profiles, deliver advanced grid support, and integrate seamlessly with other power electronics solutions makes them a preferred option in both developed and emerging markets.

Grid-Forming Inverters Market Segmentation By Application:

• Renewable Energy Integration
• Industrial
• Microgrids
• Residential
• Utility
• Others

Renewable energy integration constitutes the largest and fastest-growing application segment, fueled by the global push for decarbonization and the increasing adoption of solar, wind, and other renewable energy sources. Grid-forming inverters play a pivotal role in integrating these variable energy sources into the grid by providing critical functionalities such as voltage and frequency regulation, virtual inertia, and black start capabilities. As the penetration of renewable energy continues to rise, the demand for advanced grid-forming inverters to maintain grid stability and reliability is becoming increasingly important.

Microgrids represent another key application segment, requiring advanced power electronics to enable islanded operation, smooth transitions between grid-connected and isolated modes, and enhanced resilience against grid disturbances. Grid-forming inverters are central to microgrid architectures, delivering the necessary capabilities to ensure stable and reliable operation in both connected and islanded scenarios. The growing deployment of microgrids in remote locations, critical infrastructure, and disaster-prone regions is driving demand for grid-forming inverters, as stakeholders prioritize energy security, resilience, and sustainable energy solutions.

Industrial and utility applications are also witnessing increased adoption of grid-forming inverters, as these sectors aim to modernize power infrastructure, integrate distributed energy resources, and enhance overall grid stability. In industrial settings, grid-forming inverters facilitate reliable operation of sensitive equipment, support on-site renewable generation, and provide backup power during outages. In the utility sector, they are essential for managing high levels of renewable penetration, enabling bidirectional power flows, and maintaining grid stability amid dynamic and variable generation profiles. The emphasis on grid modernization, energy security, and decarbonization is expected to drive substantial growth across these application segments.

Grid-Forming Inverters Market Segmentation By End-User:

• Commercial
• Utilities
• Residential
• Industrial

Utilities constitute the largest end-user segment, driven by the need to modernize grid infrastructure, integrate distributed energy resources, and accommodate high levels of renewable energy penetration. Grid-forming inverters are vital for utilities aiming to improve grid stability, reliability, and resilience, particularly in regions pursuing ambitious clean energy goals while managing aging infrastructure. Significant investments in advanced grid technologies, including grid-forming inverters, are enabling utilities to support the transition toward a decarbonized, decentralized, and digitalized energy system.

The commercial sector represents another important end-user segment, as organizations seek to reduce energy costs and achieve sustainability objectives. Commercial establishments, including office buildings, shopping centers, educational institutions, and healthcare facilities, are increasingly adopting distributed energy resources, microgrids, and advanced power electronics to enhance energy independence and operational reliability. Grid-forming inverters are central to these initiatives, providing advanced grid support, seamless integration of renewable energy sources, and improved power quality. The growing emphasis on energy efficiency, sustainability, and resilience within the commercial sector is expected to sustain steady demand for grid-forming inverters.

Grid-Forming Inverters Market Segmentation: Regional Analysis:

• North America
• Europe
• Asia-Pacific
• South America
• Middle East & Africa

The Asia Pacific region represents the largest and fastest-growing market for grid-forming inverters, a trend expected to continue throughout the forecast period. This growth is fueled by rapid urbanization, extensive renewable energy deployment, and strong government policies promoting clean energy. Countries such as China, India, Japan, and South Korea are leading efforts in grid modernization and renewable energy integration, presenting substantial opportunities for grid-forming inverter manufacturers. The Asia Pacific market is projected to expand rapidly, outpacing other regions and capturing a significant share of global demand.

In North America, the grid-forming inverter market is supported by considerable investments in grid modernization, renewable energy integration, and microgrid development. The United States and Canada are at the forefront of this transition, with utilities, commercial, and industrial end-users increasingly adopting advanced grid technologies to enhance reliability, resilience, and sustainability. Steady growth is anticipated in the North American market, driven by favorable policies, technological advancements, and heightened focus on energy security and decarbonization. The region’s mature energy infrastructure and high penetration of distributed energy resources create an encouraging environment for the adoption of grid-forming inverters.

COVID-19 Impact Analysis:

The global impact of COVID-19 on the grid-forming inverter market was moderate, as the pandemic disrupted supply chains and limited activities across various end-use industries due to social distancing measures. Key manufacturing and deployment hubs, including China and India, experienced regional and nationwide shutdowns affecting residential, commercial, and industrial operations. These interruptions led to a temporary decline in demand for grid-forming inverters, impacting the market’s growth during the peak of the pandemic.

Latest Market News:

In January 2023, KACO New Energy GmbH, Infineon Technologies AG, and the Fraunhofer Institute for Solar Energy Systems ISE have partnered on the Stabil project to investigate potential stress factors affecting grid-forming PV inverters in future power grids. The insights from this project aim to inform the design of more robust and resilient hardware for the next generation of grid-forming PV inverters.

Latest Trends and Developments:

The integration of energy storage systems is a key driver of the grid-forming inverter market. With the rising adoption of renewable energy sources, the demand for efficient energy storage solutions has become increasingly critical. Storage systems, such as batteries, can capture excess energy generated during peak production periods and discharge it when demand is high, thereby enhancing grid stability and reliability. This functionality is essential for the optimal performance and deployment of grid-forming inverters.

Key Players in the Market:

1. General Electric Company
2. Hitachi Energy Ltd.
3. Schneider Electric SE
4. Huawei Technologies Co., Ltd.
5. Sungrow Power Supply Co., Ltd.
6. Delta Electronics, Inc.
7. Dynapower Company, LLC
8. Nidec Industrial Solutions
9. TMEIC (Toshiba Mitsubishi-Electric Industrial Systems Corporation)
10. Yaskawa Electric Corporation