The European Union has implemented a ban on public funding for utility-scale solar inverters sourced from countries it classifies as "high-risk," primarily targeting Chinese manufacturers. This move is expected to benefit European suppliers by shifting market demand within the 27-member bloc.
According to Jürgen Reinert, CEO of German photovoltaic firm SMA Solar, about 20% of large-scale solar projects in Europe receive EU funding. The restriction on imports from China, North Korea, Russia, and Iran could help SMA Solar increase its market share by approximately 10% in this segment.
Chinese companies, including Huawei and Sungrow, have supplied nearly 70% of the inverters used in Europe’s solar installations in recent years, creating a significant dependency on foreign technology for the continent's expanding renewable energy capacity.
Reuters calculations indicate that the EU ban will impact at least 14 gigawatts of new solar capacity under development. Reinert anticipates a gradual transition to European-made inverters for EU-funded projects, with clearer market dynamics expected by early 2027.
Despite the shift, SMA Solar has already engaged with customers previously reliant on Chinese products. The company has minimized its supply chain exposure to China, sourcing only 2% to 4% of components from there, which reduces risks related to potential retaliatory trade actions.
