EU’s Chinese inverter ban could affect 14% of future solar demand, Wood Mackenzie says

Central and Eastern European countries will see the biggest impact of the restrictions, Wood Mackenzie said, as they are the biggest recipients of EU funding for renewables.

However, Brussels has asked EU Member States to adopt the restrictions in their own national budget allocations, which would see the impacts “expand significantly beyond the current estimates,” Woodmac said.

The effects could also extend beyond the EU’s borders, as Brussels has funded utility-scale projects in North Africa, the Middle East and the Caspian region.

The president of the European Commission, Ursula von der Leyen, announced the ban in April.

The restrictions will have a “modest” impact on total project costs, Woodmac said, between 2% and 8% depending on the market. This is despite “substantial” cost differences between European-made and Chinese inverters.

“However, cost is not the only disruptive factor,” said Joe Shangraw, research analyst at Wood Mackenzie. “Procurement complications, design changes and the forced unbundling of integrated battery-inverter systems present additional challenges, particularly in price-sensitive Eastern European markets”.

Juan Monge, principal analyst at Wood Mackenzie, added: “This ban represents a meaningful shift, around 4 to 5GW per year of demand moving away from Chinese vendors through 2030.

“But it is important to keep that in context: roughly 80% of European solar and storage demand flows through private and nationally funded channels, where Chinese inverter dominance will remain intact for now.

“The real questions now are how the Commission will update the EU Cybersecurity Act to treat solar inverters as critical infrastructure and whether EU Member States will follow the Commission’s lead and extend these restrictions to their own national funding programmes. If they do, the scale of disruption changes considerably.”

Solar inverters have become a focal point for discussions of both energy “sovereignty” and cybersecurity. As digital, internet-connected products, inverters pose cybersecurity risks to both utility-scale and distributed solar assets. They can be accessed both by the original manufacturer and, theoretically, hacked into by bad actors seeking to cause disruption or harm to energy grids.

Some in the solar industry have called for restrictions on Chinese products on cybersecurity grounds, arguing that the EU should prioritise its own existing inverter manufacturers. This includes industry groups like SolarPower Europe and the European Solar Manufacturing Council (ESMC), as well as Czech energy cybersecurity expert Erika Langerova, who told PV Tech the restriction was a “necessary” move.

However, others have argued that the current model will do little to help Europe’s cybersecurity, as the security of an inverter can depend more on its software than on where it was made.

Also, as Monge said, the majority of installed solar capacity in the EU is not funded by Brussels, and most it uses Chinese-made inverters. There are currently no restrictions on private or national market access, though European inverter producer Fronius has recently called for EU-wide restrictions on all Chinese products.

The EU is currently implementing cybersecurity legislation which will impose technical requirements and restrictions on a wider spectrum of products and projects, though some specifics remain to be seen.