Recent announcements from several countries have refocused attention on the security implications of inverter supply chains.

According to an IEA report, this reflects a broader challenge facing governments and their industrial strategies for energy as they attempt to balance energy security, supply chain resilience, economic competitiveness and security with cost.

Inverters, a critical part of solar PV, battery and many wind installations, and are especially vulnerable to cyber-attacks given how interconnected they are with the internet.

A cyber-attacker could potentially control and alter the operation of the equipment the inverter is connected to. Cyber-attacks can either target an asset directly by exploiting weak points in its online connection, password protection or remote-control system; or they can arise from threats in the supply chain if ‘back doors’ are established during the manufacturing process, either by mistake or deliberately by the manufacturers or state. Malicious software can also be included in software updates.

The European Commission has recently announced restrictions on EU funding, including through the European Investment Bank and European Investment Fund, for solar, wind, and energy storage projects using inverters from countries it deems ‘high-risk’ with respect to potential cybersecurity threats. The countries currently included in this category are China, Russia, Iran and North Korea. On 8 May 2026, China’s Ministry of Commerce issued strong criticism of the new restrictions, warning it could damage trade relations, supply chain security and Europe’s energy transition. Well, they would, wouldn’t they.

Details on the exact scope of the new EU restrictions are yet to be published, but it is widely anticipated that they will directly apply only to utility-scale projects that receive EU funding. These installations, which are operated and maintained professionally with stringent cybersecurity protocols, will account for around half of global capacity additions over the coming decade, according to the IEA’s exploratory scenario projections. By contrast, most smaller installations in residential and commercial settings, often on rooftops, will not be covered by these restrictions, based on currently available information.

In the US, the National Defense Authorization Act, passed in December 2025, prohibits the use of its funds for procurement of inverters and a range of other equipment from those it designates Foreign Countries of Concern, among which China is included.

New IEA analysis on inverter prices suggests the impact on final installation costs resulting from a shift in inverter supplier from a manufacturer headquartered in China to one headquartered elsewhere would be small, even if the inverter units themselves would be significantly more expensive.

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