US ban on Chinese inverters would harm local power industry, firms warn

The United States’ reported plan to ban foreign-made inverters – a move likely aimed at curbing reliance on China – would be difficult to implement and harmful to local industry, Chinese industry insiders have warned.

Washington is working on a plan to ban foreign inverters – a vital component used in renewable power systems – over national security concerns, Reuters reported on Tuesday, with a draft potentially set to be published by the end of the year.

China dominates the global market for inverters, and US officials are reportedly concerned about the potential for Beijing to disrupt American power supplies. The European Union banned the use of inverters from “high-risk” suppliers in all EU-funded projects earlier this year.

But phasing out Chinese inverters will not be easy, according to the Chinese inverter giant Sungrow. It took China 20 years to develop its industrial chain for the product, and it could take the United States five years to build out its own local supply chain, the firm warned in a statement released on Thursday.

“US domestic brands hold around 10 per cent market share. Building a complete industrial chain cannot be achieved overnight,” it added.

Sungrow and its Chinese peer Huawei Technologies are the world’s top two suppliers of inverters, according to a report by the natural resources consultancy Wood Mackenzie released earlier this year. Chinese firms make up six of the top 10 global suppliers in the ranking.

During an investor relations event on Wednesday, details of which were released on Thursday, Sungrow vowed to strictly abide by local laws and respond to trade barriers through “product competitiveness and customer trust”.