The European Commission has announced that energy projects using Chinese inverters will no longer be subsidized. This measure aims to end Europe’s dependence—since 61% of its inverter imports currently come from China—and to reduce the risk of cyberattacks.
However, the 27 Member States will not be able to completely abandon this partner, which is essential for all technologies related to the energy transition. Europe is seeking a way to reduce its dependence on Chinese suppliers. The European Commission has confirmed the end of subsidies for energy projects using inverters supplied by “high-risk suppliers.”
This measure, implemented as of April 1, applies to both funds coming directly from Brussels and those allocated by its partners, such as the European Investment Bank (EIB), the European Bank for Reconstruction and Development (EBRD), and even several national banks.
“Nearly 12 months ago, in a context of growing technological dependence, we alerted the European Commission to a risk that is still largely underestimated: the potential presence of unauthorized communication devices in certain solar inverters, capable of bypassing security systems and, in the worst-case scenario, destabilizing our entire power grid. Today, our concerns have been heard,” said Yvan Verougstraete, Member of the European Parliament and Vice-Chair of the Committee on Industry, Research, and Innovation.
“We are already raising the possibility of remote sabotage. We are already calling for strict rules, based in particular on the origin of equipment and the security of supply chains. The European Commission has announced that it will phase out inverters from high-risk suppliers in EU-funded energy projects. This is an important decision. A necessary one. A long-awaited one (…). Cybersecurity has become a central aspect of our energy sovereignty. It also acknowledges a reality that I have emphasized: in an increasingly interconnected energy system, every component matters, including the most inconspicuous ones,” noted the Vice-President of the Commission for Industry, Research and Innovation.
By making European funding conditional on stricter security requirements, the Commission is sending a clear signal. The energy transition cannot come at the expense of collective security.
“This progress aligns with the recommendations we made a year ago: better regulation of critical equipment, integrating the geopolitical factor into risk assessments, and strengthening the resilience of our infrastructure,” Yvan Verougstraete added.
The issue of existing facilities remains unresolved. Developing reliable industrial capacity in Europe and among trusted partners will be crucial. And coordination among member states is set to be stepped up to prevent any gaps in the protection system.
“This case clearly demonstrates that anticipating vulnerabilities is not a luxury, but a responsibility. We will continue to consistently advocate for this requirement,” the lawmaker concluded.
Brussels will initially suspend subsidies for energy projects that use inverters from countries deemed high-risk, particularly those from the Chinese companies Huawei and Sungrow.
Huawei and Sungrow lead the inverter rankings
The global ranking of solar inverter manufacturers published by Wood Mackenzie for the first half of 2025 confirms the market’s strong concentration around a limited number of players. The top ten manufacturers alone account for 71% of the global market share, illustrating the rise of groups capable of combining industrial scale, technological innovation, and operational strength.
Chinese firms Huawei and Sungrow lead the ranking, with nearly identical scores (93.9 and 93.7, respectively).
Germany’s SMA retains third place, ahead of Austria’s Fronius and Ginlong/Solis, another Chinese player, which rounds out the top five.
The rest of the ranking confirms Asian dominance, with GoodWe, Aiswei/Solplanet, and several major players positioned in various technology segments, such as TMEIC, SolarEdge, and Enphase.
Wood Mackenzie highlights a shift in competitiveness criteria. The assessment, which covers 23 manufacturers across seven countries, includes non-financial and industrial indicators such as ESG policies, the quality of after-sales service, research and development efforts, supply chain stability, and manufacturing expertise.
In this context, the widespread adoption of extended warranties 20 years ago by all of the top 10 manufacturers reflects increased confidence in the durability of the equipment and a gradual alignment with the lifespan of photovoltaic modules.
The analysis also highlights an increase in investment in innovation: eight of the top ten manufacturers reinvest over 6% of their revenue in research and development, while six have an EcoVadis ‘silver’ rating or higher, placing them among the top 15% of companies globally in terms of sustainability.
Romania’s inverter market
In Romania, the solar inverter market is dominated primarily by a few major brands: Huawei, Fronius, Growatt, Deye, Solis, Sungrow, and GoodWe. The most sought-after models are those for residential prosumers in the 3–10 kW range, and the clear trend for 2025–2026 is toward hybrid inverters that are compatible with batteries.
Amid the growing number of prosumers and concerns regarding grid stability, the Romanian market is increasingly shifting toward hybrid inverters with backup functionality, compatible with LiFePO4 batteries, with users placing greater importance on high-performance monitoring applications, extended warranties, and the availability of fast and reliable local service.
Uncertain market outlook for solar inverters
In December 2025, Wood Mackenzie predicted a decline in global demand for solar inverters in 2025 and 2026, due to geopolitical tensions, changes in public policy, and slowing growth in certain key markets, particularly in China, Europe and the United States.
According to Timothy Shen, a senior analyst at Wood Mackenzie, as quoted by the French publication PV Magazine, competitive advantage now depends as much on service quality as on industrial resilience. Leading manufacturers rely in particular on regionalized assembly strategies, which allow them to meet local content requirements, limit exposure to trade barriers, and secure their supply chains.
All of the top 10 companies have also earned Wood Mackenzie’s ‘Grade A’ certification, designed as a mark of reliability for buyers and investors. Five other manufacturers—Hoymiles, Kstar, Sofar, Chint Power Systems, and Ingeteam—also join this category.
Another issue is the intermittent nature of solar panel operation. As the number of residential solar installations increases, some areas are experiencing production peaks that temporarily exceed local capacity. This proliferation of solar panels means that, at certain times, there are overvoltage issues. Too much current flows through the cables, and the customer’s inverter trips, experts say.
Smart batteries allow solar panels to be connected directly without the need for a traditional inverter. These systems also allow for low-cost electricity storage when demand is low and reuse of that energy when prices rise. But this energy security comes at a price: installing a home battery currently costs between €5,000 and €15,000.
Priority for inverters manufactured in Europe
In the long term, cybersecurity legislation will make it possible to ban the use of inverters from high-risk suppliers in the EU market.
Brussels also fears that Chinese market dominance could, in the long term, become a threat to security of supply. The EU plans to give priority to inverters manufactured in Europe or, according to a European Commission official, to use suppliers from Japan, South Korea, the United States or Switzerland.
China’s response
China has firmly opposed the European Commission’s ban on utilizing Chinese inverters in EU-funded clean energy projects, officially designating China as a ‘high-risk country’. The Ministry of Commerce denounced the move as “unfair and discriminatory,” warning that it will jeopardize the EU’s own energy security and green transition.
According to South China Morning Post, the Ministry of Commerce warned that Brussels’ actions would “destabilise industrial and supply chains” between the two economies and beyond, undermining trust and damaging bilateral trade.
“Excluding Chinese inverters would not only hurt Chinese companies, the ministry added, but would also backfire on the European Union itself by jeopardising its green transition and energy security.”