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26 February 2019

US paranoia of Huawei set to infect Solar market for inverters

The US paranoia around Chinese firm Huawei is getting ludicrous. This week a group of 11 US senators have called for a ban on solar panel inverters in the US, and could potentially call for all the installed inverter base to be replaced. An inverter simply changes an electrical source from DC to AC current.

It is hard to imagine the kind of danger that a humble inverter can represent to the almost non-existent solar panel market in the US (under 2GW per annum and 14 GW in total). Are we supposed to expect an inverter to be switched off remotely by attacking Chinese hostiles in the event of an invasion? Or as a pre-emptive strike against imposed tariffs? If so that is treating Huawei and China as if it was as hostile as Isis. It is hardly credible and easily avoidable.

The cost of putting some kind of remote control back door into inverters would made them uneconomical, and it would require that they are all connected to the internet, which they are not automatically. This is allowing the hysteria around Donald Trump’s trade war with China to spill over into the unreal. It would be funny if Huawei was not the largest solar inverter maker in the world, being forced out of the US market if this complaint sticks.

The bipartisan group of senators are calling the inverters a “national security threat” to energy infrastructure. None of the 11 have a BA in a science subject between them which is perhaps why they do not see how ridiculous this statement is.

The request was sent in a letter to Energy Secretary Rick Perry and Homeland Security Secretary Kirstjen Nielsen (who do have BA science backgrounds so may understand more). The US has already placed limits on Huawei’s presence in the US 5G cellular market due to unofficial links it has with Chinese intelligence services. But in the 5G instance, controlling AI is likely to be used, and 5G will be always connected, and simple commands through a backdoor like “shut down” could at least be imagined, because complex chips are involved. But even then, if the root ladder (the basis of all encryption) is controlled by the customer, and there are services out that that can ensure this, even this is a bit of a nonsense.

The key is to have a US security expert involved in commissioning grid scale solar that uses such inverters, and to have an outside security agency kick the tires on any product looking for a license to operate in the US.

Virtually every phone chip in the world is made in either China or Taiwan, and it is commonplace to put the first encryption key on them remotely, in order to prevent backdoor attacks. Personally we would be more worried if Apple had access to such a backdoor, rather than Huawei, as it has shown itself to be hostile in trade terms to suppliers like Qualcomm and Samsung and very uncaring about treading on other companies’ intellectual property.

It has to be understood that there are many reasons why Chinese firms should be scrutinized in and around communications, on both their use of IPR, which they rarely pay for fully when using that technology within China, but who should be forced to pay IPR royalties when they install outside of China. Also the worry with anything truly strategic.

Part of the reason for the letter is because Huawei has just entered the US market with a home based solar FusionHome, which packages up solar inverters, optimizers, controllers and battery storage. So this is more about Huawei competing with Tesla than being any real danger. They almost certainly use the same chips that Tesla uses.

This thing is that no-one has ever shown the mechanism whereby Huawei can access the telecommunications stacks of US operators. When Microsoft was found guilty of anti-trust in Europe, the actual code which made non-Microsoft operating systems slow down, was identified and named. Huawei is not in this position, so is more innocent than Microsoft was at that point.

So this is really a concern that it might be possible, not one based on prior evidence. Certainly there are established links between Huawei and the Chinese government, but there are also links between many US firms and the US government. Does that mean that China should not do business with Qualcomm or Intel?

The issue here is that the Chinese government prevents anyone doing business in China unless they have the correct licenses. Netflix didn’t fancy trying to set up there, and Google has been forced to choose between accepting Chinese government censorship or not operating there, and has ceded the market to Baidu. So what the US is really doing is seeking a way of preventing Huawei from trading in the US and with its allies, and thus applying pressure to the Chinese authorities to open up its markets. This is not about espionage – not really. The Russians have much more of a case to answer there and Trump does not seem keen to investigate that.

Which is why the letter focuses on existing US legislation which says government agencies cannot do business with Huawei, so those creating electricity shouldn’t either.

This type of ban comes at a time when solar has almost achieved parity with other sources of fossil fuel energy, on a financial basis, and Trump will delight in banning Huawei inverters to prevent solar installations having further competition driving down the price of Solar.

But then again the US electorate have elected as President someone who understands neither global warming nor business, and the result is weak backing for renewable energy and resorting to tariffs.