Key Takeaways
President Trump banned the purchase or installation of certain foreign-made grid hardware and software that could pose cybersecurity or operational risks.
Europe has recently taken similar actions for the same reasons, as operators discovered “backdoors” and other potential vulnerabilities in Chinese-manufactured equipment.
Concerns have escalated alongside the increasing deployment of grid-connected equipment, as modern solar inverters, battery-management systems, and other equipment can now generally be monitored and controlled remotely.
There is bipartisan concern that Chinese-manufactured components in the U.S. power system could contain vulnerabilities foreign adversaries can exploit.
Purchasing that equipment for installation in the U.S. grid could be a serious mistake.
On August 26, President Trump signed an executive order declaring a national emergency to ban the acquisition, importation, and installation of certain foreign-produced bulk-power system electrical equipment and software within the United States due to national security concerns. The order targeted “unusual and extraordinary foreign threats” such as hidden cyber backdoors, potential sabotage, and supply chain disruptions embedded in hardware from foreign countries, primarily to counter technology risks linked to China. The International Energy Agency estimates that China holds about 80% of worldwide manufacturing capacity for batteries and solar inverters, and the United States has imported large power transformers from China over the past decade. This tracks similar actions by the EU, as officials have become aware of potential security weaknesses in grid components.
Beyond stopping future transactions, the order directs Energy Secretary Chris Wright to evaluate equipment already operating on the grid and to isolate, monitor, or remove pre-existing machinery if it poses an unacceptable security risk. The order directs officials to weigh reliability and safety, the availability of secure replacement equipment, and continuity of essential service before requiring equipment to be isolated, disconnected, replaced, or removed. The Energy Department can also phase in compliance.
The Department of Energy has 120 days to formalize and publish specific implementation rules detailing exactly which suppliers and parts face strict enforcement. The Energy Department is requesting public input on new transformer standards because of national security and supply chain concerns. Recently, the Federal Communications Commission tightened restrictions on some foreign-made robots and power inverters used in solar energy projects.
President Trump is also directing the federal government to reconsider how it purchases energy infrastructure. Within 180 days, the Energy Secretary must recommend changes to federal procurement rules to address national security risks and prioritize U.S.-manufactured energy infrastructure. That provision could shift some federal demand from foreign suppliers to domestic manufacturers.
The restrictions focus on components supporting large-scale U.S. electricity infrastructure, including substation transformers, grid-connected inverters, large generators, battery energy storage systems, turbines, industrial control systems, and related software. The ban does not apply to facilities used for local, low-voltage distribution of electric energy. Fox News reports that the provisions could carry financial and operational consequences for the power sector, although the order does not estimate potential costs or identify which equipment or vendors could ultimately be affected.
Inverters are essential components that connect renewable energy facilities and battery storage systems to the power grid by converting direct current (DC) generated by power facilities into alternating current (AC) suitable for grid distribution. They are widely used in solar panels, wind farms, energy storage systems (ESS), and electric vehicle charging infrastructure. In solar power installations, inverters account for roughly 10% of total installation costs.
The concern arose last year when U.S. technicians evaluated grid equipment for security issues and found rogue communication devices not listed in product documents in some Chinese solar power inverters. The Trump administration sees these restrictions as necessary because foreign-produced equipment could contain vulnerabilities, including digital backdoors that could provide remote access to critical infrastructure. Further, reliance on foreign suppliers leaves the United States vulnerable to equipment shortages caused by trade disruptions or other supply shocks.
In 2020, then-President Trump issued a directive declaring foreign-supplied grid components an “extraordinary threat to national security” and barring their purchase from entities deemed a risk. President Biden rescinded that directive. The 2020 order did not name specific countries or companies but empowered the Energy Secretary to identify them.
Conclusion
President Trump signed an emergency order that generally bars the U.S. purchase or installation of certain foreign-made bulk-power system electrical equipment and associated software that could pose cybersecurity or operational risks. Europe has recently taken similar actions for the same reasons. Concerns have escalated alongside the increasing deployment of grid-connected equipment, as modern solar inverters, battery-management systems, and other equipment can now generally be monitored and controlled remotely. The issue raises new potential vulnerabilities to cyberattacks and fears that foreign adversaries could exploit weak points in the devices. There is bipartisan concern that Chinese-manufactured components in the U.S. power system could contain vulnerabilities foreign adversaries can exploit. Purchasing that equipment for installation in the U.S. grid could be a serious mistake.
