"Our risk assessments have confirmed those threats, including 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," said European Commission spokeswoman Siobhan McGarry during a Monday briefing.
European Commission freezes EU funding for projects using Chinese inverters
The European Commission has moved to restrict the use of EU funds for solar projects that rely on inverters supplied by high‑risk Chinese manufacturers, citing immediate cybersecurity risks. The measure, announced at a Monday briefing, limits inverters — devices that convert solar panels' direct current into alternating current for transmission — from suppliers classified as high‑risk when those projects seek financing from the European Investment Bank (EIB) and partner banks.
Commission officials said the action answers what they called a matter of "particular urgency" while lawmakers continue to consider a proposed revision to the EU Cybersecurity Act that would enable a broader market ban on inverters from high‑risk suppliers in the medium term. The commission also said it had highlighted the inverter issue in a December communication on strengthening economic security and is developing guidance on restricting EU funds for projects involving inverters from high‑risk suppliers.
Why inverters are singled out, and which companies are in view
The decision focuses on inverters because of their operational role at the point where generation meets the grid. Commission briefers warned of threats ranging from manipulation of electricity production parameters to unauthorized access to operational data, and framed the risks as capable of producing remote shutdowns with countrywide effects.
Although the commission has not named firms in its public communication, the briefing noted the move was aimed at Chinese suppliers. The story observed that official communications "have avoided naming Huawei," adding that does not obscure the target because China carries a high‑risk classification and Huawei is described in the reporting as dominant in the inverter market. Neither Huawei nor the Chinese foreign ministry responded to requests for comment at the time of publication.
European Investment Bank funding and the wider clean‑energy push
The funding freeze comes as the EIB unveiled a fresh 2 billion euro investment for clean energy projects last month, including a planned solar build‑out in Italy. EIB group president Nadia Calviño framed the financing as part of a strategic shift: "There is one clear lesson from Russia's invasion of Ukraine and the conflict in the Middle East: Europe needs to break free from its fossil fuel dependence," she said when announcing the new investment.
Commission officials linked their inverter guidance to that same strategic context: a significant new investment wave in alternative energy amid what the reporting described as a "growing energy crisis driven by the U.S. and Israeli war against Iran."
Lithuania, France and national moves toward diversification
Some EU member states have already imposed national limits. Lithuania instituted a clear ban in 2024 on Chinese involvement in large solar installations. France followed with an April solar procurement plan that called for onshoring panel production and diversification away from Chinese components, and included a commitment to strengthen cybersecurity requirements in future procurement.
The commission’s funding restriction is therefore both an immediate financing tool and a complement to existing national measures, according to the briefing and subsequent reporting.
Analysis from Loom and security advisers
The think tank Loom provided stark market figures to frame the risk: Chinese producers accounted for 61% of Europe's inverter imports in 2024, 88% of lithium‑ion battery imports, and 98% of solar panel imports. Loom's advisors — including Michael Collins, identified in the reporting as a former U.K. deputy head of national security strategy — warned that wide deployment of Chinese low‑carbon technology could make it easier for China to disrupt European energy systems "if it chose to do so."
Their analysis said Chinese cyber actors "are highly capable and have long sought persistent access to Western critical infrastructure" and "almost certainly have the capability to remotely access Chinese‑manufactured or operated 'smart' hardware or software, including industrial control systems." They added that while a large‑scale disruptive attack by China is "very unlikely," China "probably has a lower threshold for conducting smaller‑scale cyberattacks" that could demonstrate capability while maintaining plausible deniability and still cause "significant disruption."
What this means for technologists, policymakers, and utilities
- Technologists and security teams: Expect nearer‑term guidance from the commission constraining the use of certain inverters in projects that rely on EU financing, and prepare for technical reviews that focus on manipulation of production parameters, access controls for operational data, and resilience against remote shutdowns.
- Policymakers and regulators: The commission’s action signals an interim financing lever while the Cybersecurity Act revision works through EU lawmaking; some national governments have already pursued more far‑reaching procurement and onshoring steps, notably Lithuania and France.
- Utilities and procurement leaders: A sizeable share of supply comes from Chinese producers (61% of inverter imports in 2024), meaning procurement will face near‑term constraints on financing and increased pressure to diversify suppliers, onshore capacity, or qualify alternative vendors for EU‑funded projects.
The commission’s financing restriction is concrete and immediate; the Cybersecurity Act revision holds out a broader, legal pathway to market exclusion in the medium term. With Chinese producers supplying a dominant share of Europe's low‑carbon hardware today, the commission's move turns a cybersecurity assessment into an economic lever — and leaves open whether procurement shifts and new domestic or allied capacity will close the gap now occupied by those suppliers.
