China, Russia, Iran, and North Korea.. This directive means that even if the Commission bans inverters from China, the actual market reality noted by experts is that China remains the predominant source for inverters deployed across the EU, with companies such as Huawei and Sungrow being the main providers.
Inverters are crucial components that regulate when and how much electricity a solar or battery storage system feeds back into the public grid. Since they are usually connected to the internet, the Commission views this connectivity as a potential hacking risk.
According to reports, the EU Commission’s subsidy ban is effective immediately, having been publicly announced in a video conference involving numerous affected EU directorates and industry associations on Thursday morning.
This prohibition affects a large volume of projects. During the video conference, participants highlighted that the European Investment Bank (EIB) had funded approximately a fifth of all solar projects across the EU in 2025, many of which reportedly used Chinese inverters.
Furthermore, the regulation extends beyond projects located within the EU. It covers initiatives in neighboring regions such as North Africa or the Balkans, provided they are connected to the European power grid. Critically, the ban does not only target energy projects that use inverters from the four “high-risk countries”; it also prohibits projects using inverters manufactured by companies from other nations if those companies are owned or controlled by entities originating from the four listed countries.
For any new projects, the ban is in effect immediately. Financial institutions are also required to report their ongoing project pipelines by early May and are strongly advised to replace inverters where possible. However, projects that are already very advanced may still qualify for temporary transition rules and can continue to use Chinese inverters.