EU Curbs High-Risk Solar Suppliers’ Funding

The European Commission has moved to restrict EU funding for solar projects that deploy inverters supplied by manufacturers deemed high risk, with Huawei as a primary focus. The decision reflects growing concern in Brussels over the security of critical energy infrastructure as renewables become more deeply integrated into power systems.

Inverters, responsible for converting solar-generated direct current into grid-compatible alternating current, are increasingly viewed as sensitive components within the electricity network. EU officials warn that reliance on foreign-supplied equipment could expose grids to risks such as remote interference, operational disruption, and unauthorised access to system data.

A Commission spokesperson confirmed that immediate steps are being taken to limit the allocation of EU funds to projects using such technologies. The restrictions extend to suppliers from China, Russia, Iran and North Korea, aligning with the bloc’s broader geopolitical and security posture.

Developers currently involved in EU-funded projects may apply for exemptions. A decision on whether such projects can proceed without restrictions is expected by 1 November, leaving some uncertainty for investors and contractors already engaged in procurement and installation.

The move marks a continuation of the EU’s efforts to reduce dependence on certain foreign technology providers, following similar actions targeting Huawei and ZTE in the 5G sector. Policymakers are now extending that scrutiny to the renewable energy supply chain, where Chinese manufacturers dominate—holding roughly 80% of the global solar inverter market.

For industry stakeholders, the policy is likely to accelerate supply chain diversification, albeit with potential near-term cost implications. It also signals a tighter regulatory environment as the EU balances rapid decarbonisation with infrastructure security.

Further measures are expected under the Cyber Resilience Act, which aims to strengthen cybersecurity standards across connected technologies, including those deployed in energy systems.

China has previously warned it may respond to restrictions placed on its companies within the EU market. At the time of writing, Huawei has not publicly commented on the latest development.