It’s a well known and documented problem, it ONLY applies to the OUTPUT conductors. The issue is that thermoplastic insulation such as PVC (as used in THHN) is manufactured as a liquid that is extruded onto the wire, then set with heat to plasticize it. In the liquid form, it has microscopic bubbles in it that become trapped in the plastic. Under normal sine wave power at 600V, these bubbles are totally irrelevant.
But in the output of a VFD, the high speed DC pulses that make up the PWM pseudo-sine wave going to the motor can /will cause the conductors to act like weak capacitors. That capacitively coupled voltage is superimposed on the output as a standing wave that runs down the conductors until it hits an impedance change, the motor terminals. Some passes through to the motor windings but some reflects back the other way, where it adds to new waves, then hits the next impedance change, the drive terminals, where some again reflects back. This continually takes place back and forth until these reflected wave become spikes of very higher than normal voltages. We already know of the potential damage that this can cause to the motor winding insulation, but now 25+ years into widespread VFD use, what’s showing up is that those little bubbles in the PVC are showing up as weak spots in trying to resist the corona discharge effects of these high voltage spikes and waves.
I don’t see a lot of it, but I have definitely seen it now numerous times: a series of burn marks along the conductors where the insulation has failed phase-to-phase, but not necessarily phase to ground so a basic megger test doesn’t show it. At first it shows up as apparently “nuisance” tripping of the VFD as it sees the high speed spikes of current, but it’s difficult to diagnose without actually pulling the conductors and looking at them very closely. In all the cases where I have seen it, that was the last thing anyone wanted to do, but it was clearly evident once we did. Mind you, this does not always happen, there are a lot of specifics and circumstances that have to take place, but it is real.
I’ve been recommending RHH/RHW or now XHHW for years because they use Cross-Linked Poly Ethylene (XLPE) insulation. XLPE is what heat-shrink tubing is made of and in wire, the wire is inserted into the tubing, then heated to shrink it onto the wire. Since it starts out as tubing, it was not liquid and there are no bubbles (or they are even smaller maybe), so no weak points in combatting corona discharges. That’s why typical XLPE insulated wire is rated 1000V or more, even though we use it at 600V or less.
Many VFD manufactures have been making this recommendation in their installation manuals for years, but nobody has been paying attention.