Take a photo of a utility-scale solar park, and it will almost certainly show the modules. The inverters, mounting structures, cabling, transformers and monitoring software behind them hardly ever make the frame. Yet according to the SolarPower Europe report, these components, taken together, now outweigh the modules in both economic and strategic terms.
Balance-of-system (BOS) hardware accounted for 33 percent of the average total installation cost of utility-scale solar projects in the EU in 2025, compared with 31 percent for the modules themselves. In absolute terms, BOS hardware came to €241 per kW, and the rest of the cost went on engineering, grid connection and soft costs.
SolarPower Europe presented the report, “Solar Balance of System Explained: The hidden components enhancing solar generation,” at a webinar, with the aim of putting BOS back at the centre of Europe’s industrial debate. Drawing on the expertise of its members, the association looks at the technologies, supply chains, market trends and manufacturing base behind the European BOS sector. As the market moves into a new phase shaped by storage, digitalisation, electrification and growing demand for flexibility, the report sees BOS becoming an ever more important source of innovation and value.
A European manufacturing base that is still intact
Unlike the module value chain, where European production has largely collapsed under Chinese price pressure, BOS remains an area where the continent still has serious industrial capacity. According to the report, Europe has the second-largest share of global inverter production capacity, and in 2025 the EU’s inverter manufacturing capacity reached 96.4 GW, well above demand of 56 GW. Even so, the supply chain is not fully domestic, as Europe still imports some components while exporting others.
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For SolarPower Europe CEO Walburga Hemetsberger, BOS is an industrial opportunity for Europe. “Despite the difficulties along the module value chain, Europe retains substantial expertise and manufacturing capabilities in solar BOS technologies,” she says. “These strengths deserve recognition and conditions that support their continued development.”
Even though Europe can make more inverters than it installs, Chinese suppliers still dominate its market. In 2023, 78 percent of all inverters installed in Europe came from Chinese vendors, most of them from Huawei and Sungrow, according to DNV.
Seven policy asks
To strengthen Europe’s position, SolarPower Europe sets out seven policy recommendations covering inverters, mounting systems and the wider electrical and digital infrastructure needed to run solar installations.
For inverters, the association proposes a Union-origin requirement under Phase I of the Industrial Accelerator Act, possibly from 2028, which would favour products made in the EU. It also wants EU flexibility rules implemented in full, so that inverters are recognised for flexibility services and collective self-consumption, and calls for DC-coupled connections to be promoted for high-power renewable energy systems. Beyond that, the report recommends a European roadmap for grid-forming services, which help keep the power system stable, along with harmonised EU-wide inverter standards covering grid connection, flexibility, cybersecurity, digital communication and safety. Existing EU cybersecurity legislation should also be implemented more consistently.
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For mounting systems, SolarPower Europe points to what it sees as a long-standing gap in EU industrial policy. It wants the component list in the Net-Zero Industry Act updated to include both fixed mounting structures and trackers, so that they count towards Europe’s supply chain resilience. At the moment, mounting structures and trackers fall under broader product categories, so the association also recommends dedicated Harmonised System (HS) or customs codes for them, to improve trade data and supply chain monitoring.
The association is also keen to keep costs in check. “A proportionate implementation of such measures would strengthen European capabilities while preserving solar’s affordability,” says Michael Schmela, SolarPower Europe’s executive advisor and director of market intelligence.
Cybersecurity moves to the foreground
The policy push comes as political concern grows over grid-connected hardware made outside Europe. In April 2026, the European Commission reportedly approved a plan to block EU funding for solar and battery storage projects that use inverters from high-risk countries, including China, on cybersecurity grounds. SolarPower Europe has since asked for clarification, pointing to uncertainty over the scope of the decision and the reasons behind it.
Security experts have long warned that anyone who gains remote control of inverters could switch off large amounts of generating capacity at the same time, which could cause blackouts. They could also change voltage and frequency settings to destabilise local grids, or override safety functions such as anti-islanding protection, which shuts inverters down during a grid outage.
Why BOS now matters more
SolarPower Europe expects the role of BOS to keep growing as the sector deals with grid constraints, curtailment and lower capture prices, and as demand for electrification and storage rises. Inverters, transformers, monitoring systems and control software already convert, connect and manage solar power, and they are becoming more and more important for installation performance, operational reliability and grid integration.
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How quickly Brussels acts on the seven recommendations, ideally before the measures under the Industrial Accelerator Act take effect in 2028, could decide whether Europe holds on to its position in BOS or loses it, as it did with modules. (hcn)
