Data centers and battery storage are driving a $94 billion power conversion market by 2030, even as solar inverter demand shrinks. Here’s the breakdown.
Every solar panel, electric vehicle, data center, and battery storage system depends on a technology most people never think about: power conversion. Converting electricity between direct current (DC) and alternating current (AC), and back again, is what lets solar panels feed the grid, lets EVs charge from wall outlets, and lets data centers keep running when the power flickers.
A new market analysis puts a hard number on how much this quietly essential technology is worth: about $95 billion globally by 2030, growing at 7% a year from 2024.
Not All Power Conversion Is Created Equal
Power conversion covers four distinct jobs. DC-AC inverters turn solar and battery power into grid-usable electricity. AC-AC variable frequency drives control the speed of industrial motors. AC-DC rectifiers power everyday electronics like smartphones and EV chargers. And DC-DC converters step voltage up or down, the reason your phone charger and your car battery don’t use the same circuitry.
These technologies span a huge range of scale, from small chips in a phone charger measured in watts to high-voltage transmission equipment measured in gigawatts, and use different underlying materials depending on the job: ordinary silicon for low-power consumer electronics, and pricier silicon carbide or gallium nitride for high-efficiency, high-power applications.
Data Centers Are Now the Single Biggest Market
Across nine major applications tracked, data centers have become the largest power conversion market by a clear margin, projected to grow from $8 billion in 2024 to $29 billion by 2030, a 23% annual growth rate.
The driver is straightforward: data centers use power conversion equipment three separate ways, converting incoming AC to DC to charge backup batteries, converting that DC back to stable AC for server power, and regulating cooling fan speeds through frequency control.
As global data center capacity is projected to grow 2.7 times between 2025 and 2030, and power consumption grows roughly fourfold in the same window, every one of those three functions scales with it.
The market is also expanding geographically, into rural US regions with cheap available power and parts of Europe where cooler climates reduce the energy needed for cooling.
Growth Is Concentrated on the Demand Side
The report draws a sharp line between “supply-side” applications like solar power generation, which are maturing and slowing down, and “demand-side” applications like data centers and EV charging, which are accelerating as electrification spreads.
Electrolyzers, used to produce hydrogen, top the growth chart at a projected 26% annual growth rate, though from a small base of under $1 billion by 2030, after recent years saw a wave of project delays and cancellations temper earlier, more optimistic forecasts.
Battery energy storage systems (BESS) are set to roughly triple in size, growing 18% annually to reach $12 billion by 2030, driven by utility-scale grid storage deployments across Europe, the US, and China. EV charging infrastructure is projected to grow at a similar 18% clip, reaching $4.1 billion by 2030, with more than 1.3 million DC fast chargers expected globally and China alone accounting for nearly 70% of installations.
On the other side of the ledger, both residential/commercial and utility-scale solar photovoltaic inverter markets are actually shrinking, at negative 4% and negative 2% annually respectively, as pricing pressure and market saturation in mature regions like Europe squeeze margins even while the underlying industry keeps installing more panels.
A Grid Backbone Getting Quietly Bigger
High-voltage DC (HVDC) valves, the equipment inside converter stations that link major transmission networks, are projected to grow from $2.7 billion in 2024 to $3.9 billion by 2030, a more modest 6% annual rate, but a critical one for grid reliability. Growth here is tied to offshore wind connections, urban grid upgrades, and China’s build-out of ultra-high-voltage DC lines running above 800 kilovolts.
The broader global power transmission market this sits within is valued at roughly $165 billion in 2025 and is expected to top $200 billion by 2030.
Heat pumps, meanwhile, split into two very different growth stories. Residential and commercial space and water heat pumps, which rely on variable frequency drives to control compressor speed, are expected to grow modestly at 2% annually to reach $23 billion by 2030, with about 80% of that demand coming from homes rather than businesses, and Europe leading regional growth at 4–6% a year.
Industrial heat pumps, by contrast, are a much smaller market, expected to reach only about $1 billion by 2030, but growing faster at up to 25% annually in North America, reflecting how early-stage this segment still is.
What Buyers Actually Care About
A survey of roughly 60 industry purchasers across Europe and the US, cited in the report, found that total cost of ownership is the single most important factor when buying inverters for solar PV and battery storage systems, cited by 23–33% of respondents across markets, ahead of installation pricing, service level, and technical quality.
That ranking is itself a signal: when buyers are optimizing hardest for total cost rather than innovation or brand, it usually means a market is maturing into price competition, exactly the dynamic squeezing solar PV inverter margins right now.
Where the Opportunity Actually Sits
The report’s core strategic message is that power conversion is not one market, it’s nine fragmented ones, and success in one rarely transfers automatically to another. Equipment manufacturers tend to specialize deeply in a single end application rather than serving multiple markets with similar underlying electronics, because customer relationships, technical requirements, and go-to-market approaches differ so much between, say, EV charging and industrial heat pumps.
For equipment makers, the report suggests the more complex, higher-value segments, data centers, HVDC, and battery storage, reward companies that can deliver integrated, end-to-end systems rather than standalone components, while simpler segments like solar PV and heat pumps are becoming pure cost-competition plays.
For investors, the fragmentation cuts against traditional roll-up strategies: pure-play power electronics companies are rare, since most are vertically integrated within a single application. The more promising path, the report argues, is finding companies with deep expertise in one high-growth vertical that are also building recurring, software-driven revenue streams, like energy management or grid-forming control capabilities, on top of their hardware.