The EU’s draft IAA prioritizes low-carbon products made in the EU in public procurement and support schemes
Solar projects receiving public support will need to use EU-manufactured PV inverters and solar cells within 3 years of the law entering into force
BESS will face phased requirements, starting with EU-origin and EU-made battery management systems, followed later by EU-made battery cells and additional components
The proposal also introduces conditions for large foreign investments in strategic sectors
It aims to speed up manufacturing permits through a single digital process across EU member states
SolarPower Europe welcomes the policy support, but wants stricter enforcement of Made-in-EU parameters
The draft Industrial Accelerator Act (IAA) published by the European Commission calls for priority to be given to Made-in-EU low-carbon products, including for solar, in public procurement and public support schemes. Aimed at strengthening domestic clean technology manufacturing and accelerating industrial decarbonization, the introduction of the IAA is a ‘watershed moment’ for industrial policy in Europe, says SolarPower Europe (SPE).
According to the draft, projects receiving public support will be required to use certain PV components produced within the EU, in a bid to boost regional manufacturing and reduce reliance on imports. Similar requirements are proposed for other net-zero technologies like batteries, wind, heat pumps, and nuclear, as well as for steel, cement, aluminum, and cars.
Under the proposal, which also amends the Net-Zero Industry Act (NZIA), solar projects awarded through public procurement, renewable energy auctions, or public support schemes will be required – 3 years after the legislation comes into force – to include EU-manufactured PV inverters and solar cells, or equivalent components.
For battery energy storage systems (BESS), one year after the IAA comes into force, these must originate in the EU, and systems larger than 1 MWh must include an EU-made battery management system. After 3 years, the requirements will become stricter, mandating EU-manufactured battery cells and at least 1 additional key component produced in the bloc.
A forthcoming revision of the public procurement legal framework will define the procurement process.
“By focussing on Made-in-EU solar inverters and cells, the European Commission has largely found a balance between reshoring production of the most strategic solar PV system components, while avoiding overly restrictive requirements too early,” said SolarPowerEurope’s Deputy CEO Dries Acke. “This means support for European manufacturers, without negatively impacting affordable solar deployment. There is an important caveat here, however, that ‘Made-in-EU’ must indeed mean made in Europe – the EU and EEA.”
The IAA allows foreign companies to invest in the EU but sets certain rules for very large investments. Investments over €100 million in a strategic sector from countries that control over 40% of global manufacturing capacity will be required to create quality jobs, support innovation, transfer technology to the EU, and meet local content rules, with at least 50% of jobs based in Europe. These rules aim to strengthen EU economic security and supply chains. China accounts for over 80% of battery and solar PV manufacturing capacity, including solar inverters.
The IAA estimates the creation of 58,000 jobs in solar and another 85,000 in battery projects. EU solar jobs grew by 5% in 2024 to 865,000, but SPE expects a decline of 5% in 2025 due to slower PV market growth and manufacturing challenges (see EU Solar Jobs Hit Record 865,000 But Decline Looms).
“Facing unprecedented global uncertainty and unfair competition, European industry can count on the provisions of this Act to boost demand and guarantee resilient supply chains in strategic sectors,” said Stéphane Séjourné, Executive Vice-President for Prosperity and Industrial Strategy.
Through the IAA, the commission also aims to speed up and simplify permits for manufacturing projects and support the development of acceleration areas or industrial clusters to scale up clean technology manufacturing.
Each member state will be required to set up a single digital permitting process to ensure accelerated permitting for manufacturing projects. This is expected to result in administrative savings of up to €240 million across all manufacturing industries in the EU.
The plan to introduce IAA was initially announced by the commission’s President, Ursula von der Leyen, in 2025. The draft will now be negotiated by the European Parliament and the Council of the European Union, following which it can be implemented.
The complete draft IAA document is available on the commission’s website.
