Europe Blocks Funding for Projects Using Chinese Solar Inverters

Written by Martin Lynch, European News Editor for IIR News Intelligence (Sugar Land, Texas)

Summary

Projects using solar inverters from China or other "high risk suppliers" will not have access to European funding, according to new guidance issued by the European Commission (EC).

Concrete Action

The European Commission (EC) has confirmed that it is moving forward with a plan to block funding for any European solar project using solar inverters from "high risk" countries, including market-leading China. 

The discovery last year that certain inverters had hidden communications devices that would allow others to effectively monitor and remotely shut down a solar installation has prompted the EC's move. Speaking to reporters, Commission spokesperson Siobhan McGarry said: "In the medium term, the Cybersecurity Act will offer the possibility to ban the use of inverters from high-risk suppliers in the EU market but, nevertheless, we decided that we would take concrete action right now. And so that has included developing guidance on restricting the use of EU funds for projects involving inverters from high-risk suppliers." This includes China's Huawei and Sungrow, the top two global suppliers of solar inverters. 

According to EC data, Chinese providers, most notably Huawei and Sungrow, account for an estimated 55% of all solar inverter shipments worldwide. According to Industrial Info Resources data there are almost 4,000 European solar projects in the pipeline, worth almost US$193 billion in investment. Subscribers to Industrial Info Resources' Global Market Intelligence (GMI) Project Database can click here for the reports. 

Why Ban Funding?

In 2025, U.S. analysts identified unexplained components in Chinese-manufactured inverters designed to allow backdoor communication with solar installations. This effectively allowed those with access to potentially turn solar installations on or off. Last May, EU officials voiced concerns, with many calling for the exclusion of high-risk vendors from the energy grid. They noted that Huawei alone had a 115-gigawatt (GW) share in the EU solar market. The solar inverter scare follows on from EC recommendations to Member States in recent years to not use Huawei or ZTE equipment in their 5G networks, or any other part of their telecoms networks. 

Solar Inverter Hidden Risks

McGarry said: "In December, we published a communication, a joint communication on strengthening EU economic security. We identified that among the most pressing threats is the risk of disruption of the EU's critical infrastructure by foreign actors. So of a particular urgency and thus our focus has been the reliance on inverters in clean energy networks from high-risk vendors. So our risk assessments have confirmed those threats, including the manipulation of electricity production parameters, the disruption of electricity generation, and even unauthorized access to operational data. So, in practice, this could mean a shutdown, a remote shutdown of member states' networks leading to countrywide blackouts. So given the gravity of these threats, the Commission is taking action."

Industry Reaction

The European Solar Manufacturing Council (ESMC) "strongly" welcomed the decision as a "necessary first step to safeguard European energy security," adding it has the capacity necessary to meet European demands. "This is a truly bold decision with the potential to help revitalise manufacturing in Europe and other like-minded economies," said Christoph Podewils, secretary general of the ESMC. "This decision sends a clear signal on the security of critical infrastructure in Europe. Inverters are the heart of every solar and energy storage installation and, as internet-connected devices, a potential gateway for cyberattacks. It is right that EU funding should no longer flow to technology from high-risk states. European manufacturers are ready to meet this demand."

Key Takeaways

• Europe proposes blocking funding for projects using solar inverters from high risk suppliers, including market-leading China. 
• The European Commission highlights risks that could lead to a remote shutdown of Member States' networks leading to countrywide blackouts.
• Leading Chinese suppliers including Huawei and Sungrow are in the firing line.

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).