On July 28, 2026, the Federal Communications Commission (FCC) took a regulatory action that could reshape the competitive landscape of the U.S. power inverter market for years to come.
The impact goes beyond any single Chinese manufacturer or a handful of inverter models.
What is changing is something much more fundamental:
The rules that determine which inverter suppliers will be able to compete in the U.S. market going forward.
Historically, when a distributor selected a hybrid inverter supplier, the key considerations were relatively straightforward:
Price. Product. Warranty. Margin. Brand.
After the FCC’s latest action, suppliers must answer another critical question:
Where is it made?
And, more importantly:
Will your next-generation product still be eligible to receive the FCC equipment authorization required for the U.S. market?
That question could become one of the defining competitive factors in the next phase of the U.S. hybrid inverter market.
First, it is important to clarify a common misunderstanding.The FCC did not simply announce:
“All foreign inverter brands are banned from the United States.”
What happened is more specific.
On July 28, 2026, the FCC added certain foreign-produced power inverters to its Covered List.
Then, on August 20, following a new national security determination, the FCC modified the definition and scope of the power inverter entry on the Covered List.
The significance of the Covered List is straightforward:Once equipment is considered “covered equipment,” it is prohibited from receiving FCC equipment authorization.
For manufacturers planning to introduce new products and new models into the U.S. market, the question is therefore no longer simply:
“Can my inverter pass FCC testing?”
It is increasingly:“Is my inverter eligible to receive FCC equipment authorization in the first place?”
Those are two very different questions.
This may be the most important and most frequently overlooked aspect of the new policy.
In its August 20 notice, the FCC clarified that the newly covered equipment is identified based on its:
“place of production.”
In other words, the analysis is not simply based on the nationality of the company or the location of its headquarters.
That distinction matters.
An American-owned brand does not automatically mean that every product carrying that brand is unaffected.
Likewise, a foreign-owned company does not automatically mean that it has no pathway to continue serving the U.S. market.
Going forward, the more relevant questions include:
Where is the inverter manufactured?
How is its supply chain structured?
Does it qualify under applicable U.S. domestic-production provisions?
Can it obtain a Conditional Approval?
The FCC action therefore does more than affect a list of brands.
It changes the manufacturing and market-access logic of the U.S. inverter industry.
Today’s hybrid inverter is no longer simply a device that converts DC power into AC power.
It can sit at the center of an increasingly complex energy ecosystem connecting:
Solar.
Battery storage.
The utility grid.
Backup generators.
Home loads.
EV charging.
And increasingly, these products incorporate communications and control capabilities such as:
Wi-Fi, Ethernet, Bluetooth, cellular connectivity, cloud monitoring, remote firmware updates, remote control, and energy management systems.
The hybrid inverter is evolving from a standalone power-electronics device into an intelligent control point connecting batteries, distributed energy resources, homes, businesses, and the grid.
That is precisely why the FCC’s latest action deserves the attention of the energy storage industry.
For hybrid inverter manufacturers, distributors and installers, the implications may be significantly larger than many market participants currently realize.
To understand the potential impact, it is important to understand how globalized the U.S. inverter supply chain has historically been.
According to a U.S. Department of Energy solar photovoltaic supply-chain assessment, U.S.-headquartered companies accounted for only about 7% of U.S. inverter shipments in 2020 when measured by company headquarters.
European-headquartered companies represented approximately 42%, Japanese companies 20%, Chinese companies 17%, and Israeli companies 9%.
But there is an even more important distinction:
Company headquarters do not necessarily indicate where the product is manufactured.
The same DOE assessment noted that U.S. and Israeli companies held significant positions in the U.S. residential inverter market, while manufacturing occurred in China and other overseas locations.
In other words, the U.S. inverter market has historically operated under a highly globalized model:
The brand may be American, while the supply chain is global.
This is exactly why the FCC’s emphasis on “place of production,” rather than simply company nationality, matters.
If we broaden the discussion from solar inverters to battery energy storage systems, the supply-chain picture becomes even more striking.
A U.S. Department of Energy BESS supply-chain assessment identified the supplier composition for power conversion systems (PCS) as approximately:
69% PRC suppliers, 4% U.S. suppliers, and 27% suppliers from other countries and regions.
PCS and residential hybrid inverters are not identical product categories, so this figure should not be interpreted as meaning that 69% of U.S. residential hybrid inverters come from China.
But it illustrates a larger structural reality:
The U.S. energy-storage power-conversion industry has historically depended heavily on global supply chains, with Chinese suppliers playing a significant role.
When the FCC introduces new market-access requirements for foreign-produced power inverters, that existing supply-chain structure will inevitably have to adjust.
Not necessarily.
It would be premature to say that these companies are simply “banned” or that they must immediately exit the U.S. market.
The FCC action is not merely a blacklist of Chinese inverter brands.
The relevant questions are much more specific:
Where is a particular product manufactured?
Does that product fall within the FCC’s definition of a foreign-produced power inverter?
Does it qualify under applicable domestic-production provisions?
Has the product already received FCC equipment authorization?
Will future models be eligible for new equipment authorizations?
And can the manufacturer obtain a Conditional Approval?
A more accurate conclusion is therefore:
For inverter companies that remain heavily dependent on overseas manufacturing, the barrier to introducing future products into the U.S. market has increased substantially.
If those companies cannot restructure their manufacturing footprint, qualify under an applicable exception, or obtain a Conditional Approval, future product introductions could face significant market-access obstacles.
The important question is therefore not:
“Will Growatt disappear from the U.S.?”
The better question is:
“Where will the next generation of Growatt products for the U.S. market be manufactured?”
The same question applies to GoodWe, FoxESS, SRNE, Megarevo and other manufacturers relying heavily on overseas production.
This distinction may become increasingly important for U.S. distributors.
Historically, seeing an American brand name often created an assumption that supply-chain and regulatory risk was relatively limited.
That assumption may no longer be sufficient.
For years, the U.S. solar and storage industry has successfully operated under a common model:
American brand + Asian engineering/manufacturing + U.S. distribution and support.
Historically, some brands serving the U.S. energy-storage market have used overseas manufacturing platforms.
For example, earlier FCC documentation for certain Sol-Ark hybrid inverter products identified Ningbo Deye Inverter Technology as the manufacturer.
At the same time, supply chains are changing.
As the U.S. policy environment evolves, some companies have already begun restructuring their manufacturing strategies and moving production into the United States.
That illustrates a broader transition in the industry.
The competitive question is shifting from:
“Who owns the brand?”
to:
“Who controls the manufacturing?”
The FCC action does not simply close the U.S. market to every overseas manufacturer.
The modified August 20 definition provides several important pathways.
One involves eligibility related to domestic production under 26 U.S.C. §45X, the Advanced Manufacturing Production Credit.
Another involves qualifying as a domestic end product under the applicable federal definition.
For products delivered between 2024 and 2028, one relevant domestic-content threshold requires manufacturing in the United States and domestic component costs exceeding:
65% of total component costs.
Beginning in 2029, that threshold increases to:
75%.
There is also another important pathway:
Conditional Approval.
Entities producing power inverters in foreign countries may request an evaluation by the relevant U.S. government authorities. Equipment receiving a Conditional Approval may be exempted from the Covered List restriction.
The message from Washington, therefore, is more nuanced than:
“Foreign companies, go home.”
For manufacturers intending to remain in the U.S. market over the long term, the more relevant message may be:
Your manufacturing strategy now matters as much as your product strategy.
One of the defining characteristics of the U.S. hybrid inverter market over the past several years has been increasing supplier competition.
For distributors, that has generally been beneficial.
More suppliers mean:
More product choices.
More price competition.
Better payment terms.
Higher dealer margins.
More opportunities for regional distribution agreements.
More competitive warranty programs.
And, importantly, greater negotiating leverage.
A distributor can tell Supplier A:“If your price or terms do not work, I have Suppliers B, C and D.”
That is bargaining power.
The FCC action could change this dynamic.
If a meaningful number of overseas-manufactured future products become unable to receive equipment authorization, while only a smaller group of manufacturers can satisfy U.S. manufacturing, supply-chain and regulatory requirements, the number of effective suppliers in the U.S. hybrid inverter market could decline.
This does not necessarily create a monopoly in the strict economic sense.
But it could create something equally important for the distribution channel:
A significantly more concentrated supplier market.
And when supplier concentration increases, one of the first things distributors risk losing is:
Bargaining power.
The most obvious concern for distributors is price.
Will hybrid inverters become more expensive?
Possibly.
But price may not be the most important risk.
The deeper issue is control over the supply chain.
Imagine that today a distributor can choose among 15 credible hybrid inverter suppliers.
That distributor can negotiate on:
Price.
Margin.
Warranty.
Payment terms.
Territory protection.
Marketing support.
Technical support.
Inventory.
Now imagine that, several years from now, only a much smaller number of suppliers can consistently launch new products that satisfy U.S. market-access requirements.
The relationship between manufacturers and distributors could begin to change.
Historically:Suppliers competed for distributors.
In a more concentrated market:
Distributors may increasingly compete for suppliers.
That is the strategic risk the channel should be considering today.
For U.S. distributors, wholesalers, installers, EPCs and system integrators, this may not be the time to wait for a definitive list of “winners and losers.”
Supply chains take time to restructure.
Moving from overseas production to U.S. manufacturing requires time.
Supply chains must be rebuilt.
Products must be validated.
Factories must ramp.
Certifications must be completed.
Grid-interconnection requirements must be addressed.
Distribution and service networks must be established.
The more useful question is therefore not:
“Which inverter brands will the FCC ultimately eliminate?”
It is:“If my primary inverter supplier cannot launch its next generation of products in the U.S. on time, who is my Plan B?”
That is the purpose of a Second Source.
Because by the time the entire market knows which suppliers are positioned for the new regulatory environment, many of the most valuable channel opportunities may already be allocated.
If the number of hybrid inverter manufacturers with credible U.S. production capacity remains limited, their ability to offer:
Regional distribution rights.
Exclusive territories.
OEM/ODM programs.
Private-label programs.
Pricing protection.
Inventory support.
Technical support.
will not be unlimited.
The next 12–24 months could therefore become an important period of channel realignment in the U.S. hybrid inverter industry.
Beginning discussions with manufacturers that are actively building U.S. production capabilities does not mean distributors need to replace their current suppliers today.
It simply means:
Keeping another option open.
This is exactly why we are investing in localized production for the U.S. market.
We are developing a U.S.-localized product and manufacturing platform covering hybrid inverters and energy-storage microinverters.
Our product roadmap spans from:
8 kW residential hybrid inverters
to:
125 kW commercial and industrial hybrid inverters,
together with:
energy-storage microinverters.
Our objective is not simply to take an overseas-produced inverter, change the packaging and put an American label on it.
We are focused on building a platform designed for the next phase of the U.S. market:
U.S. Manufacturing + Compliance + Supply Chain + Product Platform.
The U.S. market does not suffer from a shortage of inverter brands.What could become scarce is something different:
A manufacturing platform capable of supplying next-generation hybrid inverters to the U.S. market consistently, competitively and compliantly over the long term.
For distributors, we want to be a:
Second Source.
If your existing supplier continues to deliver reliable products and successfully adapts to the new regulatory environment, that is good news.
You may not need to change anything.
But if FCC requirements, equipment authorization, supply-chain restructuring, trade policy or other regulatory developments affect your current supplier’s ability to introduce new products, you will already have an alternative relationship in place.
That is the real value of a Second Source.
It is not about replacing your supplier today.
It is about making sure you are never left with only one supplier tomorrow.
July 28 may not represent an endpoint for the U.S. inverter industry.It may represent a new starting line.
Historically, hybrid inverter competition was largely built around:
Price + Product + Brand.
The next phase may increasingly be built around:
Technology + Compliance + U.S. Manufacturing + Supply Chain + Channel.
For manufacturers, this means reconsidering where products are made.
For brands, it means reconsidering how much control they actually have over their manufacturing and supply chains.
For distributors, it raises an even more important question:
Over the next three to five years, how many suppliers do you want your business to depend on?
If the answer is more than one, now may be the right time to begin building a Second Source.
We are developing U.S.-localized hybrid inverter and energy-storage microinverter production, covering residential applications from 8 kW through commercial and industrial applications up to 125 kW.
If you are a solar distributor, ESS distributor, wholesaler, installer, EPC or system integrator currently reassessing your inverter supply chain following the FCC’s latest actions, we welcome the conversation.
There is no need to commit to a partnership today.And there is no expectation that every conversation needs to result in a deal.
We are happy to start by discussing what the new FCC environment could mean for your existing supply chain, which products make sense for U.S. localization, how the hybrid inverter market may evolve, and how distributors can establish a reliable Second Source before the market structure changes.
Because the best time to manage supply-chain risk is not after a supplier disappears.
It is while you still have choices.
Make sure you always have a choice.
Contact our Director:Gia CHOW
📧 giachow@asg.energy