Trump signs executive order targeting foreign equipment risks in US energy grid

President Trump signed an executive order on August 26 declaring a national emergency to shield the US bulk-power system from foreign-produced electrical equipment. The order targets transformers, generators, inverters, and associated software that could harbor hidden communication devices or unauthorized remote access pathways.

What the order actually does

Despite the sweeping language, this isn’t a blanket ban on every foreign-made component touching the American grid. The executive order focuses on risk-based assessments of equipment used in the bulk-power system, meaning the large-scale generation and transmission infrastructure that moves electricity across states and regions.

Local distribution networks, the last-mile wires that carry power to your house, are not covered.

The Department of Energy has 120 days to issue implementing regulations. The Secretary of Energy will have authority to evaluate existing at-risk equipment and order mitigation measures, which could range from software patches to full physical replacement of compromised hardware.

The order describes the foreign threat as “unusual and extraordinary,” the legal language required to invoke emergency powers. That phrasing gives the executive branch broader authority to act without waiting for Congress to pass new legislation.

Why now

Reports of rogue communication devices discovered inside solar inverters have rattled national security officials. Cyberattacks targeting US water facilities added fuel to the argument that foreign-sourced equipment in critical systems poses a tangible, not theoretical, risk.

China accounts for roughly 80% of global solar and battery inverter manufacturing capacity, according to International Energy Agency data. That concentration means nearly every utility-scale solar project in America has some exposure to Chinese-made components.

The executive order builds on a series of escalating government actions. Trump signed a previous emergency declaration in January 2025 addressing bulk-power vulnerabilities. In July 2026, the FCC added foreign power inverters to its Covered List, a regulatory designation that restricts their use in federally funded projects. The original precedent dates back to a 2020 executive order that first flagged the risks of foreign equipment in the bulk-power system, though implementation stalled under the Biden administration before being revived.

The cost of security

For utilities, compliance will not be cheap or quick. Transformers alone are notoriously difficult to source domestically. They’re custom-built, weigh hundreds of tons, and have lead times that can stretch beyond two years even under normal conditions.

The flip side is a potential windfall for domestic manufacturers. With foreign competitors facing new barriers, US-based producers of transformers, inverters, and grid control systems stand to capture market share they’ve been losing for decades. The order could accelerate investment in domestic manufacturing capacity, a trend already supported by Inflation Reduction Act incentives and other industrial policy measures.

What to watch

The 120-day window for DOE rulemaking will determine how aggressive the implementation actually becomes. The difference between “replace all Chinese inverters within three years” and “conduct risk assessments and remediate as needed” is enormous, both in cost and in practical impact on the grid.

The renewable energy sector faces a particularly complex adjustment. Solar and battery storage projects have been built around Chinese supply chains for years, not out of carelessness, but because no other country manufactures these components at comparable scale and cost.

Grid operators and regional transmission organizations will also be watching closely. If compliance timelines are tight, some regions could face difficult choices between maintaining reliability standards and meeting replacement deadlines, a tension that regulators will need to manage carefully to avoid creating the very vulnerabilities the order is designed to prevent.

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