Market update · Europe
European Inverter Manufacturing Capacity Doubles by 2027 Amid Declining Utilisation
European inverter manufacturing capacity is set to double from 60GW in 2021 to over 120GW by 2027, driven by scaling initiatives from key players. However, production will only reach 70GW, resulting in a significant drop in factory utilisation to 57% by 2027. Despite increased capacity, Europe remains dependent on imports, with Chinese suppliers maintaining a dominant market share.
SolTraCo market update · · 3 min readCapacity Growth and Utilisation Decline
European inverter manufacturing capacity is projected to surge from 60GW in 2021 to over 120GW by 2027, driven by scaling initiatives from companies such as SMA Solar and Power Electronics. Despite this growth, production will only reach 70GW by 2027, causing factory utilisation to fall sharply from a peak of 83% in 2023 to just 57% in 2027.
This paradox is partly due to newly commissioned facilities requiring extended ramp-up periods and deliberate output throttling in 2024-2025 to clear inventory backlogs from the 2022-2023 demand surge.
Import Dependency and Market Share Challenges
Despite the doubling of European manufacturing capacity, import dependency remains entrenched. Total demand in Europe is expected to grow from 52GW in 2021 to 141GW by 2027, yet domestic production will supply less than half of this demand.
Chinese imports have maintained a 50% market share since 2023, down from 70-80% in previous years but still dominant. European manufacturers have built the necessary infrastructure but have been unable to capture significant market share due to Chinese suppliers' advantages in price, supply chain integration, and economies of scale.
Trade Measures and Market Dynamics
Trade measures such as the July 2026 FCC ban on foreign-produced inverters in the US and European Investment Bank financing restrictions have not yet shifted the market dynamics favoring Chinese suppliers.
These measures have so far been insufficient to overcome the competitiveness gap faced by European manufacturers.
Sources
This update is an original SolTraCo synthesis of the linked industry sources. Reported facts and commercial interpretation are kept separate. It does not contain confidential deal information and is not investment, legal or technical advice.