CITIC Construction Investment: The EU plans to tighten subsidies for Chinese inverters, with limited actual impact.

According to the research report of CITIC Securities, the EU is planning to tighten the funding support for projects involving Chinese inverters after the IAA Act. After a thorough investigation, CITIC Securities believes that this new policy is in line with the direction of the IAA, although it is not part of its supporting regulations, but can be considered as a preliminary step of the Act. The new policy covers projects that rely on EU-level financing support, mainly affecting centralized projects in Eastern Europe, while the impact on market-oriented projects in Western Europe and projects relying on back-end storage in various countries is relatively limited. Considering the IAA, the pace of localization in Europe is slow, coupled with existing practical gaps in the short term, it is not until at least 2028-2030 that a more complete localization of the supply chain is expected to be gradually achieved. However, the Act retains exemptions, member states have flexibility in implementation, and the global inverter market is becoming increasingly diversified. In the long run, global competitiveness remains the core essence for Chinese companies to respond to policy disturbances.