The European Union’s plan to restrict public funding for projects using Chinese solar inverters is raising concerns across the renewable energy sector. While Brussels argues the measures are necessary to strengthen cybersecurity and energy resilience, industry stakeholders warn they could increase costs, delay installations and complicate the bloc’s clean energy targets.
EU scrutiny of Chinese solar inverters raises concerns for the solar market
The European Union’s proposed restrictions on Chinese solar inverters could affect more than one-fifth of new solar capacity additions, triggering concerns about energy security, investment certainty and the pace of renewable energy deployment across Europe.
Last month, the European Commission announced plans to develop guidelines limiting the use of EU public funds for projects relying on photovoltaic inverters supplied by countries considered high-risk from a security perspective. Brussels fears that internet-connected inverters imported from countries such as China could potentially be exploited to undermine the stability of Europe’s electricity grid.
Because these devices can receive software updates remotely, European authorities argue they may create potential access points for foreign actors seeking to interfere with, or even disrupt, critical energy infrastructure.
Why Brussels is targeting Chinese solar inverters
The EU has progressively adopted a tougher stance on technology imports it considers a cybersecurity risk. The recently proposed Industrial Accelerator Act would exclude China from public funding schemes covering several strategic technologies, including electric vehicles.
In parallel, planned revisions to the Cyber Security Act could further restrict external access and remote control of EU photovoltaic systems through inverters located outside the Union.
While negotiations continue, the European Commission is also evaluating stricter measures. Current proposals could eventually lead to a broader ban on EU-funded projects using equipment supplied by vendors classified as “high-risk”, depending on the outcome of ongoing security assessments.
According to a Reuters analysis, based on current installation trends, the proposed restrictions on Chinese solar inverters could affect at least 14 GW of new solar capacity, representing more than 20% of annual EU installations. Developers may therefore be forced to switch to more expensive alternatives.
In 2023, Chinese manufacturers led by Huawei and Sungrow supplied nearly 70% of Europe’s solar inverters, leaving the bloc heavily dependent on imported equipment.
Higher costs and slower installations
For Brussels, the restrictions are a precautionary measure designed to reduce systemic risks. However, industry groups and project developers fear the policy could increase costs and slow down renewable energy deployment, particularly in markets where installations rely heavily on public subsidies.
Many stakeholders argue that replacing Chinese solar inverters will neither be fast nor inexpensive. In Central and Eastern European markets, where government support schemes play a significant role in solar deployment, higher equipment costs could result in project delays and lower investment activity.
In Latvia and Estonia, around 70% of residential solar installations benefit from some form of EU-backed financial support. These markets remain particularly sensitive to pricing pressures. As Wood Mackenzie analyst Juan Monge told Reuters, rising system costs could initially slow market adoption.
Industry data suggest that inverters manufactured within the EU currently cost between 20% and 40% more than comparable Chinese products. These higher equipment prices could add roughly 2% to overall system costs.
Chinese solar inverters already dominate Europe’s grid
While some European manufacturers believe they can rapidly expand production to meet additional demand, others remain sceptical that the supply gap can be closed in the short term.
At present, the proposed EU restrictions apply only to new and ongoing projects. More than 200 GW of capacity using Chinese solar inverters is already connected to the European grid.
This highlights the scale of Europe’s existing dependence on Chinese equipment and reinforces concerns among policymakers about the potential risks associated with remote access capabilities embedded within critical energy infrastructure.
