On June 30, Reuters reported that three sources familiar with the matter told Reuters on Tuesday that the U.S. government is drafting a comprehensive new set of regulations to completely ban the import of Chinese-made photovoltaic and energy storage inverters.

Inverters are core power electronic devices that convert direct current (DC) output from solar panels and energy storage batteries into alternating current (AC) suitable for residential and public power grids; they are known in the industry as the "brain" of new energy power plants.

Chinese manufacturers such as Huawei Digital Energy, Sungrow Power Supply, and Deye Power Technology collectively hold over 60% of the global market share for residential and large-scale power plant-level inverters.

Two senior government officials confirmed that interagency consultations led by the U.S. Department of Commerce's Bureau of Industry and Security (BIS) and the Department of Energy began in April 2026, with a core concern being a security vulnerability in the firmware of Chinese inverters that could allow remote network access.

U.S. officials claim that such devices could be exploited to massively paralyze the U.S. domestic power grid in a national emergency. This proposed new set of regulations plans to completely ban the import of energy inverters manufactured by companies listed on the "Foreign Entities Watch" list.

The list encompasses almost all major Chinese renewable energy equipment manufacturers. Unlike the existing subsidy restrictions under the Inflation Reduction Act (IRA), which only limited projects from claiming federal subsidies, the new order will directly prevent the equipment from clearing customs, regardless of whether the project used government funds.

An informed source involved in drafting the provision stated that the initial draft only included very narrow temporary exemptions: a small amount of residential inventory already shipped to the US would not be affected; however, once the new rule takes effect, all brand-new equipment from Chinese factories will be prohibited from entering the country.

The policy is expected to be officially implemented in early 2027 after a public comment period. Industry associations representing US photovoltaic installers and renewable energy developers warn that the sudden ban will immediately drive up the prices of photovoltaic and energy storage equipment. Currently, Western inverter manufacturers' production capacity is completely insufficient to replace Chinese supplies on a large scale.

Industry organizations say that European suppliers and US startups will need at least two to three years to expand production to match current market demand. Since late 2025, Republican lawmakers have been pressuring the White House to enact stringent inverter restrictions. At that time, over 50 House members jointly wrote to the government, calling for comprehensive import controls on national security grounds. The new regulations drafted by the government are highly consistent with the policy framework proposed in that congressional letter.

Reuters contacted a Commerce Department spokesperson for verification, who neither confirmed nor denied the draft control measures, only stating that the U.S. continues to assess supply chain and cybersecurity risks to critical energy infrastructure.

Energy analysts point out that the proposed U.S. ban is similar in approach to previous EU policies: the EU issued rules in the first half of 2026 prohibiting public funds from being invested in clean energy projects using Chinese inverters, citing the same cybersecurity reasons; the U.S.'s direct and comprehensive import ban represents a stronger level of control.