German PV inverter manufacturer SMA Solar Technology AG (“SMA”) recently announced that its first “Medium-Voltage Power Station” (MVPS) system, tailored for large-scale U.S. solar and energy storage projects, will undergo final assembly domestically in the United States. The first project utilizing this system is expected to commence operations in Q1 2026. This move is viewed as a critical initiative for SMA to comply with the Inflation Reduction Act (IRA) localization policies, mitigate transatlantic trade frictions, and alleviate financial strains.
The MVPS system will integrate centralized/battery inverters, transformers, and medium-voltage switchgear, with phased rollouts in the U.S. scheduled from Q2 2026. Jay Arghestani, Executive Director of Large Project Sales, Technology & Marketing at SMA America, stated, “Local assembly ensures alignment with IRA localization mandates, reduces project delivery timelines, and lowers transportation costs.”
Under current IRA regulations, projects meeting minimum thresholds for “Made in America” products or components qualify for an additional 10% tax credit. Despite recent legislative proposals in the U.S. House of Representatives casting uncertainty over some IRA provisions, Arghestani emphasized, “Localization clauses in the IRA are likely less impacted. Proactive localization remains essential to securing our competitive edge.”
SMA’s localization strategy stems from escalating EU-U.S. trade tensions and a downturn in the global solar market. Since 2024, threats of U.S. tariffs on European solar products have persisted, prompting SMA to increase domestic component sourcing in the U.S. to hedge against risks. Arghestani acknowledged, “If tariffs are imposed, localized production will be our primary defense against trade barriers.”
Concurrently, SMA faces a demand slump in global residential and small-scale solar markets. Financial reports reveal a 65% year-on-year collapse in residential inverter sales and a 5% decline in inverter shipments compared to 2023 in Q1 2025. The company reported a net loss of €117.7 million (~$126 million) and an EBITDA of -€16 million in 2024, a sharp deterioration from 2023. To address the crisis, SMA has announced 1,100 job cuts and merged its residential and commercial & industrial divisions into a “Residential & Commercial Solutions” unit to streamline operations and reduce costs.
To solidify its dominance in large-scale utility markets, SMA aims to enhance product competitiveness through localized production. The company plans to progressively increase the proportion of “locally sourced and assembled components” in MVPS systems sold in the U.S. to maximize IRA tax credits. Arghestani disclosed, “We are deepening partnerships with U.S. suppliers, targeting a localization rate exceeding IRA minimum thresholds by 2027.”
This strategic pivot underscores SMA’s commitment to navigating regulatory complexities, trade uncertainties, and market volatility while positioning itself for long-term growth in the U.S. solar sector.
