EU curbs on Chinese solar inverters to bolster European suppliers, SMA Solar says

• SMA Solar CEO estimates the company could gain around 10% market share, as roughly one-fifth of larger solar projects use EU funding and will now exclude suppliers from China, North Korea, Russia, and Iran
• The ban will affect at least 14 gigawatts of new solar capacity based on current deployment levels, with the situation expected to stabilize by early 2027
• SMA Solar has reduced dependence on China to just 2-4% of components for large-scale inverters and reports early discussions with customers who previously bought from Chinese suppliers

Summary: EU Solar Inverter Ban to Benefit European Suppliers

The European Union implemented a ban in May on public funding for utility-scale solar inverters from "high-risk" countries, primarily targeting Chinese manufacturers. The EU cited security concerns that internet-connected inverters could be weaponized to disrupt Europe's power grid.

Key Market Impact:

German supplier SMA Solar expects to gain approximately 10% market share from this policy shift. CEO Jürgen Reinert stated that roughly one-fifth of major solar projects receive EU funding and will now be restricted from purchasing inverters from China, North Korea, Russia, and Iran.

Market Context:

Chinese manufacturers, led by Huawei and Sungrow, have dominated Europe's inverter market with approximately 70% market share in recent years. Based on current deployment levels, the EU-wide ban affects at least 14 gigawatts of new solar capacity.

Timeline and Developments:

While SMA Solar has already engaged in discussions with customers who previously purchased Chinese inverters, CEO Reinert predicts the market situation will stabilize by early 2027. The transition from Chinese to European suppliers will take time to materialize fully.

Supply Chain Positioning:

SMA Solar has strategically reduced its dependence on China, currently sourcing only 2-4% of components for large-scale inverters from Chinese suppliers. This positions the company well against potential retaliatory measures and supply chain disruptions.

The ban represents a significant shift in Europe's renewable energy equipment market, balancing security concerns with the continent's aggressive solar deployment targets while creating opportunities for domestic manufacturers.