Solar panels are seen in this file photo. [GETTY IMAGES]

 
As concerns mount over the disruption of Korea’s solar power ecosystem due to the overwhelming dominance of Chinese products, the government and industry have begun efforts to localize production.
 
The move reflects a growing view that this is more than a matter of cost competition: It is also one of national industrial competitiveness.
 
 
‘Start with inverters’
 
On Nov. 18, seven domestic inverter manufacturers — OCI Power, Keumbee Electronics, Dasstech, Dong Yang E&P, DIK, ECOS, Innoelectric and Hanyang Electric — launched Korea’s first joint industry body, the Korea Solar Inverter Industry Council (translated).
 
The Korean government and solar energy and equipment companies also recently agreed on a goal to reduce Chinese inverters’ market share — which currently exceeds 90 percent — to below 60 percent, according to the solar industry on Thursday. 
 
A solar inverter converts the direct current (DC) generated by solar panels into an alternating current (AC) suitable for homes, power grids and other industrial uses. Panels generate electricity; energy storage systems (ESS) manage distribution; and the inverter makes electricity usable and connects it to electrical grids. It not only acts as a final gateway but also as the “brain” of a solar power system, managing power quality and collecting operational data.
 
The council has designated the localization of large-capacity central inverters as its top priority, while the government has committed to increasing the share of renewable energy to 40 percent by 2030 — half of it from solar — under its Carbon Neutral and Green Growth Basic Plan and the 11th Basic Plan for Long-term Electricity Supply and Demand.  
 

Prime Minister Kim Min-seok looks at solar power panels at a village in Yeoju, Gyeonggi, on Nov. 20. [NEWS1]

 
That means a surge in national-scale solar plants with capacities of 20 to 100 megawatts will be inevitable.
 
Such large facilities require high-capacity inverters capable of reliably converting and feeding large volumes of power into the grid — a task that demands great technological sophistication, including efficient cooling and stabilization systems that perform under extreme conditions and high conversion efficiency to minimize power loss.
 
Inverters with capacities below 50 kilowatts are classified as string inverters and are typically used for small-scale installations, such as rooftop or parking lot systems.
 

Prime Minister Kim Min-seok looks at solar power panels at a village in Yeoju, Gyeonggi, on Nov. 20. [NEWS1]

 
China controls more than 80 percent of the global solar supply chain, according to the International Energy Agency. Inverters are even more concentrated, with over 90 percent believed to be of Chinese origin.  
 
As a result, many Korean companies have effectively abandoned local production and instead import Chinese equipment to resell at about a 10-percent markup.
 
“Strategic government support is urgently needed to localize inverter production,” an industry source said.
 

Solar panels in the Hainan prefecture of western China’s Qinghai province are seen on July 1. [AP/YONHAP]

 
Cheap, but at what cost?
 
While Korean firms may favor Chinese inverters to save on short-term costs, experts warn that this may lead to lower operational efficiency and system stability over time. In the event of equipment failures, the lack of a rapid maintenance infrastructure could result in greater losses in power output.
 
Moreover, because inverters collect key data — such as power generation, load and grid conditions — insufficient security screenings raise the risk of backdoor access. The issue, therefore, is not merely about protecting domestic products but also about economic viability and energy security.
 
“Chinese equipment may be cheaper to procure initially, but it could end up more costly in terms of long-term efficiency and reliability,” said Kong Ji-young, an associate researcher at the Korea Energy Economics Institute.
 

An aerial view of solar panels on barren mountains in Haiyuan County, Zhongwei, in northern China’s Ningxia province on Nov. 6 [AFP/YONHAP]

 
To change the current market dynamics, the government is also accelerating localization across the entire solar supply chain, from cells and panels to ESS and inverters.
 
It has included the goal of commercializing tandem solar cells — a next-generation high-efficiency technology — in the third round of its “Top 15 Ultra-Innovative Economic Projects” (translated). Tandem cells are expected to surpass the efficiency limits of conventional silicon solar cells.
 
In the ESS sector, the government is reportedly planning to increase the weight of “domestic industry contribution” to exclude Chinese products in its second round of public tenders later this year.
 
Industry insiders warn that if the ecosystem collapses, it may be impossible to recover.  
 
“This is our last golden opportunity,” one source said.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY KIM SU-MIN [[email protected]]