Ban on high-risk PV inverters to impact 14% of EU solar demand to 2030

A ban on solar inverters and power-conversion systems from China and other countries considered high risk by the European Commission could impact around 14% of forecasted European solar demand from 2026 to 2030, according to analysis by Wood Mackenzie.

The figure is equivalent to over 28 GWdc of solar inverter demand, Wood Mackenzie’s analysis adds. 

The European Commission moved ahead with plans to restrict EU funding for PV projects using inverters from high-risk suppliers in April, citing cybersecurity concerns. The policy also extends to battery storage projects, with Wood Mackenzie anticipating it to affect 12% of future EU energy storage deployments through to the end of the decade.

“Critically, the European Commission is also asking EU member states to adopt this restriction for any solar and energy storage projects receiving funding from their own national budgets,” Wood Mackenzie’s latest analysis adds. “If member states comply, the share of capacity affected would expand significantly beyond the current estimates.”

The ban on Chinese solar inverters, which also aims to address the dominance of Chinese companies in Europe’s solar inverter market, is expected to impact countries in Central and Eastern Europe most heavily. Wood Mackenzie cites Romania, Bulgaria, the Baltic Nations and Greece as the most exposed markets. The ban is also expected to impact utility-scale projects that receive EU institutional finance in North Africa, the Middle East and the Caspian region.

Although inverter cost premiums for European-made alternatives can be substantial, Wood Mackenzie’s latest analysis expects the overall impact on total project costs to remain modest, indicating increases in the range of 2% to 8% depending on market segment.

“Procurement complications, design changes and the forced unbundling of integrated battery-inverter systems present additional challenges, particularly in price-sensitive Eastern European markets,” said Joe Shangraw, research analyst at Wood Mackenzie.

Juan Monge, principal analyst at Wood Mackenzie, added that the ban would represent around 4 GW to 5 GW of demand moving away from Chinese vendors through 2030 but noted that 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,” Monge added.

“If they do, the scale of disruption changes considerably.”

The European Commission began to revise its Cybersecurity Act in January with a debate which highlighted dependency on a limited number of solar inverter suppliers as a “significant security risk”. It followed a security doctrine published by the commission late last year that identified solar inverters as a high-risk dependency.

Lithuania has already moved to ban remote Chinese access to management systems of solar, wind and storage facilities, while last month pv magazine reported the German government is currently examining regulatory measures to restrict the use of Chinese inverters in energy infrastructure.

In June, the European Commission said solar and wind power generation digital infrastructure is “emerging as a priority cybersecurity concern” as it announced plans to undertake a risk assessment of solar and wind installations in the EU.