In just one month, the federal government issued two separate rules restricting foreign-made power equipment on national security grounds: an FCC action targeting inverters specifically, and a much broader White House executive order covering the whole transmission grid. This article walks through what each one actually does, where they overlap, and what it means if you’re buying or building with inverters, transformers, circuit breakers, or batteries today.
Two federal actions came out within about a month of each other this summer, and both target foreign-made power electronics on national security grounds, with the executive order (EO) more broadly targeting grid-tied electrical equipment. If you’ve spent the last few weeks fielding questions from your team, your investors, or your suppliers about what’s actually banned here, you’re not alone. The National Electric Manufacturers Association asked regulators in August for, in their words, “a lot more clarity,” and BloombergNEF singled out energy storage as facing more near-term risk than almost any other part of the power sector.
The two rules, drafted by two different government bodies in roughly the same window, share the same concern: that foreign-made grid equipment capable of remote connection, especially anything made in China, could create a cybersecurity or sabotage risk for the U.S. electric grid. The FCC’s action is narrower and targets inverters specifically. Executive Order 14421 is broader: it covers the entire bulk power system, batteries, transformers, circuit breakers, and certain generation equipment, not inverters alone.
Here’s what each rule actually does, when it takes effect, who it affects, and how Anza can help you navigate the situation successfully.
The FCC Inverter Ban, Explained
In July 2026, the FCC’s Public Safety and Homeland Security Bureau added foreign-produced power inverters to its Covered List, the same tool the agency already uses against foreign-made drones and routers. That followed a determination by a White House-convened national security body that foreign-produced inverters pose an unacceptable risk, regardless of what the label claims about country of origin. “Covered List” status blocks new foreign-produced inverter models from getting the FCC equipment authorization required to import, market, or sell them in the United States going forward.
A product being deemed not “foreign-produced” is strictly based on the country of manufacturing and has a two-pronged test to qualify: the final end-product must be physically manufactured or assembled within the United States; and the cost of domestic components used in its manufacturing or assembly exceeds 65% of the total component cost for items delivered in calendar years 2024 through 2028, rising to 75% of the total component cost for items delivered starting in calendar year 2029.
For an inverter to land on this list, it needs two features: it has to convert power, which covers microinverters, string inverters, central inverters, and hybrid battery-based inverters (the FCC names all four), and it has to be able to communicate: Wi-Fi, cellular, Bluetooth, or a wired connection like Ethernet.
There are three exemptions built into the rule:
- The Federal Acquisition Regulation (FAR) Buy American exemption: satisfying the domestic manufacturing/assembly and domestic component requirements outlined above.
- The Conditional Approval exemption: Companies can apply for Conditional Approval of new equipment with the relevant disclosures, which the Department of War or the Department of Homeland Security will review. The application requires disclosing ownership, sourcing, and manufacturing locations, plus a concrete, time-bound plan to build or expand U.S. production. Those applications are due from suppliers by January 1, 2028, are only intended as a near-term transition tool, and won’t be an applicable route after this date.
- In addition, the FCC’s August 20th update added a new documented off-ramp: if a foreign-produced inverter is eligible for the Section 45X advanced manufacturing production tax credit, the Department of War has determined it should not be treated as “foreign-produced” for purposes of the Covered List, alongside the existing Buy American and Conditional Approval pathways.
The rule took effect July 28, 2026. Equipment that’s already installed isn’t affected. Any device with a valid FCC ID or SDoC compliance information is considered “authorized” by the FCC. (You can check authorization status on the FCC’s website.) Inverters authorized before July 28, 2026 can continue being imported, sold, installed, operated, and serviced; nothing already in the ground has to come out.
The FCC also issued a companion waiver that preserves manufacturers’ ability to push routine software and firmware updates (patches, bug fixes, compatibility fixes) on already-authorized equipment through at least January 1, 2029. However, a substantial hardware redesign or new communications hardware would require new authorization.
The August 20th Clarification
Three weeks after the FCC inverter ban took effect, the FCC narrowed and sharpened its own definition, responding to industry pushback about ambiguity rather than reversing course, “sanding down” edges it set up too quickly the first time.
The FCC re-anchored its technical definition to the industry’s own standard, UL 1741, for “utility-interactive” inverters, replacing a looser list of device types and closing off arguments about edge cases. The update also added the Section 45X exemption noted above.
Unfortunately, it also broadened what counts as “connected,” too: the original rule focused on wireless communication, and the update makes clear that wired connections, including a plain Ethernet port, count just as much. In addition, it also clarifies that remote-communication hardware does not need to be physically pre-installed at the factory to trigger the import and sales ban. Under the revised definition, an inverter is subject to the ban if it contains, or is designed, equipped, or configured to accept a remote communication component.
In practice, the rule isn’t any less broad. Most grid-tied inverters already have some form of remote monitoring built in, so most of the market stays squarely inside the definition. What’s changed is that manufacturers now have a clearer, better-documented set of ways to argue their way out.
Executive Order 14421: A More Expansive, Slower-Moving Rule
On August 26, 2026, the White House signed Executive Order 14421, declaring a national emergency over foreign-made equipment connected to the bulk power system, the high-voltage transmission backbone running at 69 kV and above (i.e., local distribution lines are excluded).
Where the FCC rule is inverter-specific, the bulk power system executive order casts a much wider net. It covers transformers, inverters, circuit breakers, generation turbines and reactors, battery storage systems, industrial control systems, and, as noted in the EO, “any critical component, software, firmware, digital service, maintenance service, or remote-access capability associated with such equipment.”
It targets equipment designed, developed, manufactured, or supplied by entities tied to roughly two dozen countries under existing U.S. arms embargoes or sanctions. China is by far the largest practical target, given how much of the world’s battery and inverter supply it produces. Russia is the only other country of note, as it is involved in the transformer component supply chain. However, both China and Russia are currently suppliers of certain critical components, such as transformer bushings and circuit breakers, that were providing improved lead time options. Removing these from the supply chain will continue to drive longer lead times.
Beyond location, the EO also targets persons owned by, controlled by, or subject to the jurisdiction or direction of a Covered Foreign Entity, as well as the extent of coverage (critical components, services, etc.), transaction scope, and the United States’ exposure to supply chain disruptions.
In addition, EO 14421 goes further than the FCC action in another key way besides breadth: it gives the Department of Energy authority to review equipment that’s already installed, not just new purchases. That could eventually mean isolating it, monitoring it, or requiring its replacement; however, DOE hasn’t published rules explaining how or when it would actually use that authority. The order took effect for new transactions on August 26, 2026 – the definition of which includes “acquisition, importation, transfer, or installation of any foreign-produced bulk-power system electric equipment” – and DOE has 120 days from that date, until December 24, 2026, to issue implementing regulations.
In short, a lot of what this order means in practice won’t become clear until those rules land.
How the Two Rules Fit Together
The FCC rule is the narrower, faster-moving piece, already in effect, specific to inverters with communication capability. EO 14421 is the broader, slower-moving framework: it folds inverters alongside batteries, transformers, circuit breakers, and other grid-scale equipment, then adds a second layer of DOE review on top.
If you’re sourcing inverters today, you need to satisfy the FCC inverter ban now and watch DOE’s rulemaking for what comes next. Both rules test the same thing underneath: country of manufacture, underlying supply chain, associated services, and ownership rather than brand name, so sourcing diligence matters more right now than whatever name is printed on the datasheet.
What This Means for Developers and Owner-Operators
Expect near-term friction: deployment delays while developers wait for guidance, requalify suppliers, or redesign around available equipment, taking into account availability constraints for clearly U.S.-manufactured products.
Project economics also face real risk if lower-cost foreign inverters, transformers, circuit breakers, or batteries become unavailable or noncompliant partway through a project, or if redesigning around domestic equipment drives up costs too much on a project that barely pencils out. Energy storage equipment carries near-term exposure because so much of the global battery and inverter supply chain is China-linked.
In addition, customers should give the same scrutiny to transformers and circuit breakers under EO 14421 to ensure compliance. A supplier may claim to offer domestically manufactured or assembled high voltage transformers – but certain components like bushings and circuit breakers may be sourced from targeted countries like Russia or China, putting them at risk of noncompliance, whereas sourcing fully domestic options could push out your lead time by several years.
In practice, this looks like ordinary supply chain diligence applied to a new set of questions:
- Start by mapping which active projects and contracts touch the full range of affected equipment categories;
- Watch for DOE’s implementing rules coming later this year, which are expected to be much more expansive than the FCC inverter action and will likely reshape what “compliant” means for equipment already installed, potentially requiring scrutiny of existing projects to ensure compliance.
- In addition, confirm your suppliers’ FCC authorization status and obtain documentation on the country of manufacture and ownership, not just where the headquarters sits. It’s worth asking whether domestic-content options exist for what you need and at what premium, and getting ahead of it in your contracts matters too: language addressing equipment substitution risk is a lot easier to negotiate before a project runs into it than after.
How Anza Can Help
Anza can help you navigate both actions, depending on what phase your project is in:
- For transactions already initiated, our energy storage and transformer advisory teams can help you refocus your supplier diligence, flag contracting risks including those from the FCC inverter ban and the new EO, stack compliance requirements, and assess any equipment replacement costs.
- For projects still on the horizon, we can provide supplier selection frameworks, help you evaluate your project roadmap, provide premium and lead time assessments, and assemble the documentation you’ll eventually need to prove compliance. For example, we can bring credible, high-voltage transformer suppliers to the table, who you may not know of or previously considered, with 2-2.5 year lead times versus 3 to 4 year lead times from the brand-name OEMs.
- Lastly, for operational projects, we can assess existing risks from the new EO, how to isolate and secure any newly-prohibited equipment, and source compliant replacement options.
In addition, Anza is incorporating FCC authorization data into our Energy Storage Pro and Energy Storage DG platforms, so you can check the authorization status of a specific inverter or power conversion system without digging through FCC filings yourself. Lastly, you can follow how both policies develop through our platform News & Insights.
The Bottom Line
Even with DOE’s rules still pending, a few things are clear: more sourcing friction and supplier diligence in the near term, a further shift toward domestic and non-Chinese supply, and a widening gap between suppliers who can document compliance and those who can’t. This doesn’t stand apart from everything else going on, either. It builds on the FEOC compliance and tariff pressure Anza has already been tracking through 2026, so it’s worth treating as one more input into the sourcing decisions you’re already making rather than a separate problem to solve from scratch. DOE’s implementing rules, due on or around December 24, 2026, are the next real inflection point, and we’ll keep you informed as we learn more
If you want to see the FCC inverter authorization data live in our energy storage platform, be sure to join our webinar on September 30th. In the meantime, you can schedule a demo, or reach out to Anza’s energy storage and transformer advisory teams to talk through how these two rules affect your specific project pipeline.
Quick Reference: Key Dates
| Policy Change/Event | Date |
| FCC inverter Covered List action | Effective July 28, 2026 |
| FCC clarification (DA 26-870) | Issued August 20, 2026 |
| FCC: Conditional Approval application deadline | January 1, 2028 |
| FCC: Firmware/software update waiver | Preserved through at least January 1, 2029 |
| Executive Order (EO) 14421 signed | August 26, 2026 |
| EO 14421: DOE RFI comment deadline (Docket DOE-HQ-2026-1123) | October 9, 2026 |
| EO 14421: DOE implementing rules deadline | On or around December 24, 2026 (120 days from EO signing) |