EU and U.S. Power Firms Scrutinize Supply Chains for Chinese Parts

On 1 November, it’s lights-out for power inverters from “high-risk” suppliers to European Union-funded grid projects. The EU will no longer pay for Chinese inverters for these projects, although member nations still can if they so choose. As a result, companies across the EU are reviewing their supply chains and preparing to power their fast-growing grids with fewer Chinese components, which the EU has assessed can enable backdoors to remotely control or shutdown grid infrastructure.

Is enacting its own restrictions for similar reasons. Federal Communications Commission added power inverters to its list of foreign technologies that require certification before sale in the country. Then, in August, the White House issued a more expansive executive order banning foreign inverters, transformers, battery storage, generators, and software and firmware.

The order also asserts federal authority to review and modify existing installed equipment, but leaves the details to the Department of Energy (DOE) to explain in a rule in late December. “The details of the DOE rule are what are going to cause some drama,” says George Gross, emeritus professor of electrical engineering at the University of Illinois in Urbana-Champaign and a former long-time Pacific Gas & Electric Company engineer and manager. “I was surprised that the community did not exactly scream, ‘We are all going to be overwhelmed.’” But that may be because they see enough latitude for purchasing what they need, Gross adds, even as the shape of the supply chain will change.

Power Inverters and Grid Security Power inverters are a key component for converting DC electricity from sources such as solar farms or long-term battery storage into AC electricity for the grid. In 2025, industry group Green Power Denmark detected hidden communications channels in some circuit boards bound for installation on power inverters.

In a different incident, Célistine Oosting, a security researcher at the Dutch Institute for Vulnerability disclosure publicly exposed credentials allowing firmware updates to her parents’ solar panels. And while there is no public proof of a Trojan horse-type attack on an electrical grid in the U.S.

Or EU, the vulnerabilities show how enterprising hackers could open a back door. The risks extend beyond inverters to other components in the long-distance transmission part of the electrical grid collectively called bulk-power equipment.

For example, in 2015 and 2016, hackers used existing weaknesses in Ukrainian electrical equipment to cause blackouts, including by controlling switchboards and circuit breakers. DOE has been wrestling with how to handle grid hacking since before then, and other countries have since developed their own approaches.

India’s energy authority has required laboratory malware testing of foreign components since 2020, among other measures. Japan’s equivalent authority has since 2024 required a 30-day advance screening before approving the installation of certain power equipment.

The European purchasing decision, which does not apply to nationally- or privately-funded projects, may still force energy companies to replace 4 to 5 gigawatts’ worth of planned bulk-power equipment purchasing from Chinese suppliers from now to 2030, energy consultancy Woods Mackenzie estimated in July. That’s about 14 to 18 percent of the EU’s planned purchases over that period.

Inverter manufacturers, renewable energy suppliers, and investment bankers met with EU officials in June to discuss their ability to replace that Chinese manufacturing capacity. The upshot: It is possible, but will be slow and costly.

Power Supply Chains EU and U.S. Power supply companies are trying to update their supply chains even though they know the rules will probably continue to change in the short term.

Some are trying to make those rules better suit them. For example, inverter manufacturer Fronius, in Wels, Austria, warned in June that replacing the Chinese components in its supply chain could take a year.

It also advocated for the EU to enact an outright ban on new Chinese bulk-power components rather than just saying it won’t pay for them. That way Fronius and other companies in its position can justify the upfront investment in new, costlier suppliers.

In September, the DOE requested public comment on its rule-making. Some requested clarification of what components DOE would consider “associated with” bulk-power equipment, and recommended keeping the list as narrow as possible to address only elements that allow control of grid components.