On July 28, local time, the Federal Communications Commission (FCC) officially added foreign-produced grid-tied PV/energy storage inverters to the Covered List. The new regulations take effect immediately without a transition period.
Analysis by Hangjia Shuo Energy Storage reveals that the new ban primarily blocks the channel for Chinese inverter companies to export next-generation products to the U.S. The substitution window for energy storage inverters in North America will narrow simultaneously. Meanwhile, this will lead to a standstill in the current certification processes for related equipment in the U.S., posing a risk of delays for PV and energy storage projects under construction or in the planning stage.
Effective Immediately, but Only Targeting New Models
On July 28, local time, the FCC officially updated the Covered List, bringing foreign-produced humanoid robots, quadruped robots, and networked power inverters under the ban. The relevant measures take effect immediately upon announcement.
The core objective of this ban is to mitigate the cybersecurity and supply disruption risks facing U.S. AI (Artificial Intelligence) infrastructure and critical supply chains. The FCC's ban primarily features the following characteristics:
First, effective immediately with no transition period: Unlike many previous regulatory measures, this ban has neither a phased implementation period nor a grace period, taking effect on the day of its release;
Second, targeting only new models without retroactive effect on existing equipment: The ban solely targets new Chinese equipment models not yet on the market. Existing inverters already in use or approved in the U.S. remain unaffected, but the FCC reserves the right to subsequently revoke the access qualifications of approved models currently on sale.
Third, targeting all foreign products: Unlike previous FCC bans that named specific companies, this ban legally targets all foreign products without explicitly stating "Made in China." However, similar to its previous approach with drones and routers, the FCC is expected to leave room for exemptions for vetted non-Chinese suppliers.
Fourth, determined by origin rather than brand: The FCC enforces the ban using the "domestic end product" definition from the federal "Buy American" standards. This means that even if an inverter belongs to a U.S. company, it will be banned if assembled in an overseas factory; conversely, a foreign brand can still obtain authorization if final assembly is completed within the U.S. and meets the federal component value threshold.
Fifth, exemption application channel: Companies can apply for "Conditional Approval," with the Department of Defense responsible for robot reviews and the Department of Homeland Security responsible for inverter reviews. Manufacturers must open their entire supply chain and firmware architecture to federal auditors to prove that the code cannot be remotely manipulated.
The transition of this ban from rumors to formal implementation was well-prepared. In early July, Reuters cited five sources familiar with the matter, pointing out that the U.S. government was reportedly drafting new import control regulations targeting foreign-produced inverters due to concerns that China might use these inverters to disrupt power supplies. The draft, prepared by the FCC, could be released and enter the public comment period as early as 2026.
Directly Impacting the 93% Supply Gap in the U.S.
This ban directly overturns an analytical conclusion released by the U.S. Department of Energy in January 2026—which tested 30 Chinese-made inverters and found no evidence of malicious hardware. However, a White House interagency committee argued that physical flaws are not the key issue; the risks primarily stem from the digital realm. The U.S. side asserts that modern smart inverters feature wireless connectivity and can remotely shut down PV and energy storage equipment by sending firmware updates. Therefore, all foreign-assembled equipment poses an unacceptable threat to the critical grid.
From the initial ban on specific Chinese telecommunications companies in 2022, primarily regulating wireless communication equipment, to the current inclusion of inverters and robots, it is evident that the FCC's regulatory scope is expanding. Its "Covered List" has evolved from an initial blacklist of communication equipment into a general supply chain review tool covering "any Chinese product with a chip." Combining the characteristics of the inverters and robots included in this ban, in the future, products meeting the three conditions of "being networked and remotely controllable; connected to critical infrastructure or the physical world; and having supply chains highly concentrated in China" may be brought under the ban. Industry analysis predicts that the Battery Management System (BMS) for energy storage batteries could be the next target.
Looking at the direct impact of the ban, starting with the U.S. domestic market, foreign media reported that due to the lack of a transition period, the current equipment certification and approval processes will come to a standstill. Developers are forced to suspend existing procurement activities and urgently seek new hardware suppliers.
The direct consequence of the ban is equipment shortages, which will delay upcoming commercial and utility-scale projects in the U.S. According to data from the U.S. Department of Energy, domestic manufacturers can only meet about 7% of the supply for the U.S. solar inverter market, and the remaining 93% gap is difficult to fill in the short term. Meanwhile, developers plan to grid-connect over 58GW of PV and energy storage projects in the next year. Without certified inverters, completed PV and energy storage plants cannot be commissioned and connected to the grid, directly hindering the aforementioned installation targets.
More challenging is the "dead loop" of engineering compliance: For U.S. asset management and engineering contractors, switching to domestic suppliers will also face the issue of interconnection protocol changes. Interconnection protocols are deeply bound to the engineering design specifications of specific inverter models. Replacing equipment constitutes a "material change," which, according to standard rules, requires a re-evaluation of engineering design, further extending the project cycle.
Narrowing Substitution Window for Energy Storage Inverters in North America
In response to the aforementioned U.S. measures, the Chinese side has responded. A spokesperson for the Ministry of Foreign Affairs previously stated clearly that China has always resolutely opposed the U.S. practice of generalizing the concept of national security, setting up various discriminatory lists, and unreasonably suppressing Chinese enterprises. China urged the U.S. to correct its mistakes and emphasized that China will take necessary measures to firmly safeguard the legitimate rights and interests of Chinese enterprises.
Previously, when discussing the impact of the FCC ban rumors on enterprises, multiple energy storage-related companies explicitly stated that the impact was limited. Sungrow (300274) stated in its investor relations minutes in early July, "Regarding trade barriers, the company adheres to local laws, insists on compliant operations, and responds with product competitiveness and customer trust. Currently, the market share of local inverter brands in the U.S. is about 10%. It took China 20 years to perfect its inverter supply chain, and it is estimated that it will take the U.S. at least 5 years to perfect its local supply chain."
Chint Power Systems (002150) stated in response to investor inquiries on July 13, "Regarding the relevant news released by Reuters citing sources familiar with the matter, it is currently only a market rumor. The corresponding bill has not yet been drafted, and there is high overall uncertainty. The company will continue to follow up on the subsequent progress of the policy and dynamically assess the relevant impact."
Shenghe Shares (300693) responded during an institutional research visit on July 3, stating that the company has no PV inverter product sales, and the revenue from its energy storage inverter business in the U.S. accounts for an extremely low proportion of the company's overall revenue. The specific situation of the rumors is still under discussion and confirmation. The company will follow up on developments and specific market changes in real time, flexibly deploy capacity based on actual conditions, and build a diversified supply chain layout to cope with potential risks and changes, expanding overseas business legally and compliantly.
Looking further, according to sources familiar with the matter confirmed by Reuters that the FCC will grant batch exemptions to non-Chinese suppliers, the actual impact of the ban is highly concentrated on Chinese enterprises. The channel for leading inverter manufacturers such as Huawei and Sungrow to export next-generation products to the U.S. has been directly blocked, and the market substitution window for energy storage inverters in North America has thus narrowed.
For this formal FCC ban, affected Chinese enterprises can take the following practical measures:
First, actively apply for "Conditional Approval" and submit to the U.S. Department of Homeland Security (for inverters) or the Department of Defense (for robot enterprises) for review. However, the core of the review is not to evaluate security improvements, but to verify whether the manufacturing process has been transferred to the U.S. domestic market;
Second, utilize the policy window where existing models are unaffected, prioritize pushing the shipment of authorized products, and simultaneously strive to apply for exemptions for security-compatible updates before January 1, 2029;
Third, decentralized supply chain layout: circumvent restrictions by setting up assembly plants in the U.S. or switching to non-Chinese communication modules, and accelerate the exploration of non-U.S. alternative markets such as Europe and Southeast Asia;
Fourth, file administrative litigation: apply for administrative reconsideration or review within 30 days after the FCC decision is announced, and subsequently seek judicial review, although courts usually respect the executive branch's judgment on national security matters.
Note: The content of this article is only for organizing public information in the energy storage industry, industrial research, and objective analysis. The listed companies mentioned in the article are only for reference as supply chain cases and do not constitute any investment basis. The market has risks, and investment requires caution.