Is Europe about to target solar inverters?
Recently, inside the European Parliament building, the European Commission was working on revising the Cybersecurity Act. The Vice-President of the European Commission responsible for Technological Sovereignty, Security and Democracy proposed introducing a list of "high-risk equipment manufacturers" to strengthen the EU's cybersecurity resilience and capabilities. Companies included on this list would face restrictions or even exclusion from the EU's critical infrastructure markets.
This draft bill plans to phase out components and equipment from so-called "high-risk suppliers" in 18 key areas, including 5G communications, semiconductors, power systems, autonomous driving, and medical equipment. Although the document does not explicitly name any country or company, its policy direction is clear and it is widely seen as another measure to contain Chinese high-tech companies.
It is worth noting that shortly before this bill was discussed, a Financial Times report sparked concerns in the solar photovoltaic industry about the future of the European market. The article pointed out that the European Commission was studying whether it could gradually restrict the entry of some solar inverters considered high-risk into the European market through a new cybersecurity framework, including products from Chinese manufacturers.
However, this is only the Financial Times' perspective; the European Commission has not yet made a clear decision to ban them. However, this does not preclude the possibility that the European market will not take action against Chinese photovoltaic inverters in the future.
After all, according to publicly available information from the European Commission, the contents of the bill's list are currently unclear, but this trend has already caused some unease among many inverter manufacturers.
Solar inverters face another crackdown!
Even before the European security draft bill, the US had already shown hostility towards Chinese solar inverters.
On November 14th last year, over 50 Republican members of the House Freedom Caucus jointly wrote to the Department of Commerce, citing "potential national security risks," calling for a ban on solar energy storage inverters from FEOC entering the US market, primarily targeting products manufactured in China.
In the letter, the lawmakers expressed concern about the expanding application of Chinese-made solar and energy storage inverters, stating that such equipment could be maliciously used, thereby endangering the security of the US power grid, and specifically cited an unreliable Reuters report.
In May 2025, a Reuters report indicated that some Chinese-made inverters might contain undeclared wireless communication modules, raising concerns about potential risks to the power grid. Subsequently, the US Department of Energy (DOE) coordinated with its national laboratories to conduct technical testing on approximately 30 inverter devices.
However, it's worth noting that a recent report by PV magazine, examining the wireless communication range and potential risks of inverters, revealed that the US government's analysis of Chinese-made inverters found no conclusive evidence of malicious wireless functionality.
The Financial Times' focus on Chinese photovoltaic inverters seems to be a repeat of a familiar tactic: first public opinion, then legislation, and finally politicization in Europe. This has been a consistently effective method, demonstrating the persistent skepticism in European and American markets towards Chinese photovoltaic inverters and similar products.
Exports Rise, European Market Remains the Focus
Currently, profit margins for photovoltaic modules in Europe are generally low, with some companies even facing losses, due to global overcapacity and continuously declining module prices. Module prices in the European market have fallen to historical lows; for example, in December 2025, the price of TOPCon bifacial solar panels was approximately €0.088/W, and the price of P-type modules was approximately €0.077/W, close to the companies' cash cost line, severely compressing profit margins.
Furthermore, coupled with the impact of trade barriers and tariffs, the EU has imposed provisional anti-dumping duties on photovoltaic modules since June 2025, with rates reaching as high as 47.6%. Combined with policies such as the Carbon Border Adjustment Mechanism (CBAM), this has significantly increased export costs for companies, leading to a decline in product price competitiveness and further squeezing profit margins.
Compared to the overseas sales situation of modules, inverters currently still maintain relatively good profit margins.
According to the latest data, in November 2025, China's inverter exports reached US$767 million, a year-on-year increase of 25.89% and a month-on-month increase of 13.29%. In December, photovoltaic inverter exports reached US$839 million, a year-on-year increase of 26.12% and a further month-on-month increase of 9.38%; the total export value for the year reached US$9.041 billion, a year-on-year increase of 9.41%.
From an export market perspective, Europe remains the largest overseas market for photovoltaic inverters, ranking first with $3.437 billion, by Asia with $3.123 billion. Emerging markets such as South America provide diversified support for export growth.
Behind the inverter controversy lies the "de-Sinicization" strategy of Europe and the United States.
The suppression of Chinese photovoltaic products by Europe and the United States is, in fact, driven by a deeper desire to support the development of domestic enterprises.
In June 2024, the EU's Net Zero Industry Act (NZIA) officially came into effect, demonstrating that EU member states are accelerating the implementation of "local manufacturing" and "supply chain diversification" requirements.
As a crucial support for the EU to achieve its "2030 Climate and Energy Goals," the core objective of the NZIA is to strengthen the EU's "open strategy autonomy." Simply put, it aims to expand domestic net zero technology manufacturing capabilities and reduce dependence on a single external supply chain by regulating market access.
It is worth noting that the NZIA requires EU member states to introduce "non-price criteria" in the bidding for public renewable energy projects.
According to European Commission regulations, starting December 30, 2025, at least 30% of the winning bids in each member state's annual photovoltaic (PV) tenders must meet the NZIA's "non-price standard," meaning they must use at least four key components not originating from China (including cells, modules, inverters, and structural components).
In August 2025, the Italian Ministry of Environment and Energy Safety (MASE) issued Decree No. 220/2025, which supplements and revises the existing FER-X Transitorio (FER-X transitional version) framework. It primarily adjusts the "non-price standard" in the PV project tendering system and, for the first time at the national level, explicitly states that certain key equipment in PV systems cannot originate from China.
This is the first time Europe has directly linked the country of origin of equipment to eligibility for government subsidies in a national renewable energy incentive decree.
The signals behind these policies are quite clear. They not only reflect a shift in European policy from a "price-oriented" to a "supply chain security-oriented" approach, but also indicate that, with Chinese photovoltaic products sweeping the globe, the EU and the US are gradually using policies to reduce their reliance on Chinese products.
While the European and American markets still have a long way to go before achieving true localization of manufacturing, the frequent actions of the EU and the US force Chinese photovoltaic companies to reassess their future overseas expansion strategies.
