Industry warns that EU restrictions on Chinese components could halt the rollout of renewables in developing countries.

Companies and investors have warned that a ban on EU funding of Chinese-made inverters, a key component for clean energy projects, could slow or stop the rollout solar and wind power projects in countries with lower incomes who rely heavily on public funds.

The European Union wants to be more independent in certain strategic industries, but it is still heavily dependent on Chinese suppliers for technology that is crucial to the green transformation of the bloc.

In May, the European Commission blocked EU funds for inverters, an essential component of solar, wind, and battery storage systems, from countries that were deemed "high-risk", including China, due to security concerns.

China is the largest supplier of inverters to Europe, supplying about 70%.

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In a July 7 letter sent to the President of the European Commission, Ursula Von?der Leyen (and seen by), 36 companies and investors warned that restricting Chinese inverters could disrupt'solar and wind growth in Central and Eastern European nations.

These countries already trail behind the wealthier nations of Western Europe in their efforts to transition away from fossil fuels.

The industry players warned that the move could slow down -- or even stop in some markets -- the transition to a cleaner energy in the region.

They warned European-manufactured supply is not yet sufficient to ?replace Chinese parts, leading to higher costs and project delays, while a lack of clarity about how the EU will apply the ban was "freezing ?financing decisions across the region".

Wood Mackenzie, a consultancy, estimates that, between 2026- 2030, "the EU restrictions" will force 14% of European Solar Projects and 12% energy storage deployments — which likely would have used Chinese Inverters — to seek out alternative suppliers. Romania, the Czech Republic, and Greece are among the worst-affected markets.

The companies requested that the EU impose rules restricting the foreign companies' access to their inverters after they are installed on the European grid. Manufacturers can typically remotely access inverters to update the software, for instance.

Some EU officials believe that such an approach will not provide a strong firewall against possible interference. (Reporting and editing by Joe Bavier; Reporting by Kate Abnett)

(source: Reuters)