SolarPower Europe: EU’s Chinese inverter ban causing ‘deep uncertainty’ with lack of clarity

The group has broadly criticised the introduction of the ban without greater consultation with the solar industry.

The policy “is already delaying solar projects across Europe” and putting the bloc’s 2030 solar deployment goals at risk, the trade body said. It added that the “absence of prior consultation or an impact assessment” is also a “concern” for the sector, and is “not consistent with the Commission’s own good governance principles.”

Ursula von der Leyen announced the ban in late April, restricting funding for energy projects that use products from “high-risk” countries from all major EU financing instruments, including the European Investment Bank (EIB) and European Investment Fund.

In its recent announcement, SolarPower Europe called for the Commission to publish “clear guidance on the scope of the decision, to remove ambiguity and accelerate compliant procurement decisions” and “set up the tools to streamline the implementation” of the decision, “Including (1) tailored national impact assessments and transition timelines, (2) fast-tracked harmonisation of relevant network codes so that European inverter manufacturers can scale market access across Member States without delay, and (3) support for European inverter manufacturing to scale up production where necessary to meet the demands of the end-users.”

Brussels’ inverter funding ban could affect up to 14% of the EU’s solar demand from 2026-2030, amounting to over 28GW of solar inverter demand, according to recent analysis by energy market research firm Wood Mackenzie.

The analysis also said that Eastern and Central European countries would be affected the most, as they are greater recipients of EU funding, though Brussels has reportedly asked member states to adopt the same principles in their national budgeting and funds, which would lead to greater impacts across the continent.

The ban is also likely to increase costs for European projects, as Chinese inverters are the cheapest on the market and hold a massive market share.

Europe has significant inverter manufacturing capacity, and recently the Austrian inverter producer Fronius said that it could expand its annual production to 17GW “within six to 12 months” if the EU announced “clear and reliable framework conditions” for the inverter sector. Those conditions would be a more wide-ranging ban on Chinese inverters in the European market, a Fronius spokesperson told PV Tech at the time.

Energy security, cyber security

There are two arguments in favour of the restriction of Chinese inverters in Europe: domestic manufacturing and energy security, and cyber security concerns.

From a domestic manufacturing and energy security perspective, experts have told us that restrictions on Chinese supply generally make sense. There have recently been reports that the US is considering a similar policy, which resulted in a 20% drop in the share price of the leading Chinese inverter producer Sungrow, according to Bloomberg.

While the move makes sense as a way to diversify strategically important inverter supply and support domestic companies, it is not all straightforward. As we were told by Ryan Davidson, principal consultant, power system digitalisation at DNV, supply chains are complex and many producers use subcomponents from both China and Europe. Also, some Chinese manufacturers either have or are planning to build factories in Europe, and vice versa.

From a cybersecurity perspective, there is less evidence that a supplier ban will make a difference. Davidson told PV Tech that inverter bans “do not inherently make other infrastructure more secure”, and that “nearly every cyber attack we have seen in the past has been … compromising products from ‘trusted’ vendors or credentials from legitimate users.”

SolarPower Europe said that industrial policy and cybersecurity are among its “priorities … which require distinct and tailored approaches.” The EU, for its part, is currently introducing a revised Cybersecurity Act and NIS2 legislation, which impose technical requirements and accountability for cybersecurity in critical infrastructure.

Cybersecurity expert and managing director of SolarDefend, Uri Sadot, wrote about the effects of the NIS2 legislation for PV Tech last week.