Background on the Power Inverter Determination
In July 2026, an Executive Branch interagency body transmitted an initial National Security Determination to the Federal Communications Commission (FCC) regarding foreign-produced power inverters. That determination found that foreign-produced power inverters pose an unacceptable risk to U.S. national security and the safety of U.S. persons, directing their placement on the FCC Covered List pursuant to the Secure and Trusted Communications Networks Act, 47 U.S.C. § 1601.
The initial framework allowed the Department of War (DoW) or the Department of Homeland Security to issue specific determinations exempting particular power inverters or classes of inverters that do not pose such security risks. The Assistant Secretary of War for Industrial Base Policy transmitted a subsequent memorandum advising the FCC to update the Covered List and amend the operative definition of power inverters.
Exemptions Under Section 45X Clean Energy Tax Credits
Under The One Big Beautiful Bill Act (Pub. L. No. 119-21, § 70514), signed into law on July 4, 2025, conditions were established for the Advanced Manufacturing Production Tax Credit under 26 U.S.C. § 45X. The statute prevents eligible components from receiving credits if they contain material assistance from a prohibited foreign entity.
The DoW determined that foreign-produced power inverters eligible for the section 45X domestic production tax credit are treated as domestically produced under federal policy and do not pose unacceptable risks to national security. Consequently, DoW directed that these eligible inverters be excluded from the Covered List.
Scope of Connectivity and Utility-Interactive Standards
The DoW memorandum clarified the technical criteria governing power inverters that remain subject to the Covered List:
Power inverters that cannot connect to the utility grid (non-utility-interactive inverters) were determined not to pose threats to the interconnected power system, as their operational risk is confined to local impacts.
- Wired and Wireless Connectivity: Inverters that contain or are designed, equipped, or configured to accept components enabling remote communication, control, sensing, data collection, or monitoring via Ethernet, Wi-Fi, cellular, Bluetooth, or similar connections are covered.
- UL 1741 Standard: Covered devices must be utility-interactive inverters that change DC power to AC power (including bidirectional devices) intended for use in parallel with an electric utility to supply common loads and deliver power to the utility, as defined in Underwriters Laboratories Standard UL 1741 sections 2.1.23 and 2.1.52.
Updated Definitions for the Covered List
The DoW provided Annex A definitions to guide the FCC in updating the Covered List for foreign-produced power inverters.
- Power Inverters: Electronic devices that change DC power to AC power (including bidirectional devices) intended for parallel operation with an electric utility under UL 1741 sections 2.1.23 and 2.1.52, and contain or are configured to accept components for remote communication, monitoring, sensing, or control via wired (such as Ethernet) or wireless (such as Wi-Fi, cellular, or Bluetooth) means.
- Foreign-Produced Power Inverters: Power inverters meeting the technical definition that are NOT eligible for the 26 U.S.C. § 45X tax credit and are NOT domestic end products under 48 CFR § 25.101(a) (which requires U.S. manufacture and domestic component costs exceeding 65% for calendar years 2024 through 2028, or 75% starting in calendar year 2029).