European energy policy is increasingly moving from the question of how quickly renewable energy capacity can be expanded towards a much broader question – who controls the technologies through which this capacity is connected to and managed? This trend is particularly important for solar energy, battery energy storage systems (BESS) and electricity grid infrastructure projects. The European Union is placing increasing emphasis not only on investment volumes and CO₂ emission reductions, but also on the origin of technologies, cybersecurity, supply chain resilience and strategic autonomy.
From Amber Advisory’s perspective, this represents an important shift in the development of energy projects. Working with companies and organisations on sustainability, EU funding, energy and investment projects, it is increasingly clear that successfully implementing a project requires more than assessing the price, capacity or payback period of a technology. Regulatory developments, access to financing, supplier risks and the project’s long-term compliance with European requirements must also be considered.
BESS Development Shows How Important Regulation Is Becoming
The experience of Croatia provides a clear example of how important regulation is becoming for the development of energy storage. On 6 July 2026, a roundtable discussion on the development of battery energy storage systems was held at the Croatian Chamber of Economy, bringing together representatives of the Croatian Energy Regulatory Agency (HERA), ministries, the electricity distribution system operator, the electricity market operator and the energy sector.
The discussion focused on how to establish a clear and predictable regulatory framework for BESS projects – from spatial planning and energy permits to grid connection requirements, network charges and the legal status of energy storage systems. Particular attention was given to network charges, as these costs can become one of the most significant operating expenses for standalone or arbitrage-based battery systems. Predictable and transparent rules are therefore important not only for regulators, but also for investors who need to assess the economic viability of a project over many years.
The Croatian experience is also relevant in the Latvian context. BESS projects are becoming increasingly important across the Baltic region, but their development requires more than capital and suitable technology. The way a project integrates into the electricity market, grid connection requirements, network cost structures and regulatory developments are all critical factors. In other words – a BESS project is not only a technological project, but also a regulatory and financial project.
Europe Is Starting to Look at What Lies “Behind the Solar Panels”
At the European level, another important shift is taking place. The European Commission has introduced restrictions concerning EU-funded renewable energy projects using grid equipment originating from China, Iran or Russia. Particular attention is being paid to inverters – devices that connect solar panels, batteries and other electricity generation or storage technologies to the power grid.
According to Euractiv, from 1 November 2026 these restrictions will affect projects financed by European financial institutions, including the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD), as well as certain national development banks. This does not constitute a general ban on the use of Chinese-made equipment in the European Union, but it represents a significant signal for the financing market: the origin and security characteristics of technology may increasingly become factors determining whether a project qualifies for specific European financing.
The role of inverters is particularly important here. A solar panel primarily generates electricity, whereas an inverter is a considerably more sophisticated component that converts electricity and controls its interaction with the power grid. Modern inverters are connected to software, communication systems and, in many cases, remote management platforms. They are therefore increasingly described as the “brains” of solar energy systems.
This issue is particularly significant given China’s dominant position in global solar energy supply chains. Euractiv reports that in 2023 approximately 78% of inverters imported into the European Union came from China, while Chinese companies accounted for nine of the 12 companies dominating the EU inverter market. As a result, the discussion around inverters is no longer simply about which equipment is cheaper or more efficient. It is increasingly becoming a question of critical infrastructure security, cybersecurity and Europe’s ability to maintain control over its energy system.
From Solar Panels to BESS – Requirements Are Increasing Across the Entire Technology Chain
Importantly, this discussion is no longer limited to solar energy. Similar technologies are also used in battery energy storage systems, wind energy projects and other grid-connected technologies. The new European requirements may therefore also influence technology choices for BESS projects, as the inverter, energy management system (EMS), software and remote access solutions together form an important part of the project’s infrastructure.
For energy project developers, this means it is becoming increasingly important to view technology as an integrated system rather than simply as a collection of individual pieces of equipment. When selecting a BESS or solar energy solution, factors such as battery capacity, power output and inverter price remain important, but they must be assessed alongside the manufacturer’s origin, supply chain, software security, remote access capabilities, service model and compliance with potential financing requirements.
At the same time, this situation creates new opportunities for European manufacturers. Companies such as Austrian Fronius, German SMA and Spanish Ingeteam remain active in the European inverter market. European manufacturers have increasingly highlighted the need to develop a competitive and cybersecurity-focused European energy technology ecosystem. At the same time, European institutions are exploring ways to support the production of grid components and other strategically important technologies within Europe.
A broader European industrial policy trend is therefore emerging. Renewable energy development remains a priority, but at the same time Europe is seeking to reduce excessive dependence on a single supply region. The objective is not to slow down renewable energy development, but to ensure that it takes place on the basis of safer, more diversified and more resilient supply chains.
Implications for Energy Project Development in Latvia
For Latvian companies currently planning solar, wind or BESS projects, these developments mean that technology choices should be considered closely alongside the project’s financing model. If a project is expected to rely on financing from the EIB, EBRD, EU funds or national development banks, the compliance of selected equipment with potential financing requirements should be assessed already during the project preparation stage.
This is particularly important for large capital-intensive projects, where preparation and implementation may take several years. The cheapest technology today does not necessarily represent the lowest-cost solution over the project’s lifecycle if it creates future restrictions on financing, additional cybersecurity risks or the need to replace technology. The project’s economic model should therefore consider not only CAPEX, OPEX and expected revenues, but also regulatory, technological and supply chain risks.
From an investor’s perspective, questions such as who the equipment manufacturer is and where the equipment is produced; whether critical systems allow remote access; how software and data security are ensured; whether the supplier can provide service throughout the project lifecycle; and how the project economics could change if new network charges or technology-origin requirements are introduced are becoming increasingly important. Integrating these considerations into project development at an early stage can reduce the risk of costly technology or financing model changes later on.
From Low-Cost Technology to Secure and Financeable Technology
For a long time, one of the key questions in energy project development was simple: how much does the equipment cost and how quickly will it pay back? Today, a new dimension is increasingly being added to this approach – how secure, financeable and suitable for long-term use is the chosen technology?
This may also mean higher upfront costs when European-manufactured equipment or technologies with higher cybersecurity and supply chain standards are selected. However, such solutions can reduce regulatory, financing and supply chain risks throughout the project’s lifecycle.
European energy policy is therefore gradually changing the underlying logic of investment projects. An energy project is no longer only a question of the cost of electricity generation or investment payback. It is simultaneously a question of technological independence, cybersecurity, access to financing and long-term regulatory stability.
Sources: HERA – Horvātijas Enerģētikas regulēšanas aģentūra
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