Washington declared foreign grid equipment a national emergency, and the list of who is banned is due by Christmas

On August 26, 2026 President Trump signed Executive Order 14421, “Declaring a National Emergency To Secure the United States Bulk-Power System,” under the International Emergency Economic Powers Act; it was published in the Federal Register on August 31, 2026 (91 FR 55995).

It prohibits any acquisition, importation, transfer or installation of foreign-produced bulk-power system electric equipment, for transactions initiated after that date, where the Secretary of Energy determines the equipment was designed, manufactured or supplied by persons owned by, controlled by or subject to the jurisdiction of a “Covered Foreign Entity” and poses an undue risk of sabotage, remote action or supply disruption.

The covered equipment is listed expressly: substation transformers, utility-scale and other grid-connected inverters, battery energy storage systems, uninterruptible power supplies for critical infrastructure, large and small generators, generation turbines, circuit breakers, protective relays, metering and industrial control systems. The order names no country and no company.

The Secretary must publish implementing rules within 120 days (December 24, 2026), may identify particular countries or equipment for scrutiny, may impose conditions on equipment already installed — up to isolation, disconnection and replacement, with phased compliance — and must recommend Federal Acquisition Regulation changes within 180 days to prioritize US-manufactured energy infrastructure in federal purchasing.

On September 9, 2026 the Department of Energy published a request for information (docket DOE-2026-HQ-2026-1123) with responses due October 9, 2026 and a public webinar on September 16.

It asks what voltage, capacity and connectivity thresholds should define covered inverters, battery storage, UPS and generators, what domestic “secure replacement capacity” exists, and how existing equipment should be mitigated. CATL alone shipped 125 GWh of storage cells in the first half of 2026, 27.1% of the global market. Between the August 25 and September 10, 2026 closes, Fluence Energy fell from $11.24 to $9.78, Eos Energy rose from $3.54 to $3.92, Enphase fell from $37.35 to $35.63 and SolarEdge rose from $29.88 to $35.35 — no common move.

Opportunity

The obvious reading is that this is a procurement-security order like the 2020 order of the same name, which was suspended in January 2021 and had its single prohibition order revoked that April, and the absence of any group move in storage and inverter shares suggests that is how it is being read. Two things are different.

The 2020 order was about transformers and controls; this one names battery energy storage systems and grid-connected inverters explicitly, at the moment grid batteries are the fastest-growing equipment category on the US grid and the one with the highest Chinese content. And it reaches backwards: it authorizes conditions on equipment already installed, up to disconnection and replacement.

The mechanism is categorical rather than priced. A tariff makes a Chinese cell more expensive — Section 301 duties on Chinese non-EV lithium-ion batteries rose from 7.5% to 25% on January 1, 2026 and projects kept buying them. A covered-entity determination makes the cell unusable in a bulk-power project at any price. If the December rule designates Chinese cell makers, every utility-scale storage project initiated after August 26, 2026 needs cells from Korea, Japan, the United States or a non-lithium chemistry, and developers holding Chinese-supplied backlog need licences or redesigns.

Hypothesis: the market is pricing the order as a threat that the rulemaking will narrow into irrelevance, and the storage names have traded on their own execution problems rather than on the rule.

If the December rule draws the line at Chinese cells rather than at Chinese-branded systems, the scarce asset becomes non-Chinese cell capacity already on US soil — LG Energy Solution’s Michigan and Arizona lines, Samsung SDI, AESC’s Tennessee plant that feeds Fluence, Tesla’s Nevada cell plant, Eos’s zinc line — and the losers are developers with Chinese-supplied pipelines. The reverse inference is as investable: a narrow rule that spares cells removes an overhang from those same developers. Either way, the responses filed by October 9 are where the industry states its exposure in writing.

How it could play out

The DOE webinar on September 16 and the responses due October 9, 2026 force utilities, developers and integrators to quantify how much Chinese content sits in the installed fleet and the project pipeline. The implementing rules due December 24 name the covered entities and the equipment thresholds and set up a licensing or prequalification regime.

If cells are covered, non-Chinese cell capacity is bid up, storage project timelines stretch, and the existing-equipment recommendations start a monitoring-and-replacement cycle that utilities recover through rates. The FAR recommendations due by February 22, 2027 add a federal preference for US-made equipment on top.

Questions worth asking

• Will the rule treat a battery system as “foreign-produced” by its cells or by its integrator? An American-assembled system built around Chinese cells is the typical US grid battery, and whether that is covered decides who wins and who loses.
• Which listed developers hold the most Chinese-supplied storage backlog initiated after August 26, 2026 — NextEra, AES, Constellation, Vistra — and what fraction of it can be re-sourced without repricing the project?
• How much non-Chinese storage cell capacity actually exists in North America today (LG Energy Solution, Samsung SDI, SK On, AESC, Tesla), and how much of it is contracted to carmakers rather than to grid projects?
• Do non-lithium chemistries — Eos zinc, ESS iron flow, Form Energy iron-air — become the compliant default, or stay too small to matter?
• Which foreign inverter suppliers are large in US utility-scale projects, Sungrow above all, and can SMA, GE Vernova, TMEIC and Power Electronics absorb the volume?
• Does the existing-equipment leg create a replacement cycle for substation transformers and controls that utilities recover through the rate base — in which case the regulated utilities are beneficiaries, not victims?
• Why did the 2020 order die without effect, and is there a legal or political path that kills this one the same way?

Where to look

• Fluence Energy (NASDAQ: FLNC) — the largest US-listed storage integrator, contract-manufacturing in the US with AESC cells but historically dependent on Chinese cells; fell from $21.62 on June 10 to $9.78 on September 10, 2026 on its own guidance cut, so the rule is not in the price either way
• Eos Energy (NASDAQ: EOSE) — US-made zinc batteries with no Chinese cells, the cleanest compliant-chemistry expression
• LG Energy Solution (KRX: 373220) and Samsung SDI (KRX: 006400) — Korean cell makers whose US plants become scarce capacity if Chinese cells are covered
• Tesla (NASDAQ: TSLA) — Megapack with a Nevada cell plant; storage is a small part of a very large company
• GE Vernova (NYSE: GEV), Siemens Energy (XETRA: ENR), Hitachi (TSE: 6501) — transformers, switchgear and controls that receive the “secure replacement” demand
• SMA Solar (XETRA: S92), Enphase (NASDAQ: ENPH), SolarEdge (NASDAQ: SEDG) — non-Chinese inverter makers; the residential business may fall outside the bulk-power definition, which is itself a question for the rule
• NextEra Energy (NYSE: NEE), AES (NYSE: AES) — the largest US storage developers, exposed if their pipelines are Chinese-supplied
• CATL (SZSE: 300750), BYD (HKEX: 1211), Sungrow (SZSE: 300274) — the entities most likely to be designated

Thesis check

The order is primary text, dated, and it names battery storage and inverters explicitly; a prohibition is categorical where a tariff is a price, and the Department of Energy has a hard December 24, 2026 deadline to say what it means. What would kill it: the Department can define “Covered Foreign Entity” narrowly or license freely, the 2020 predecessor died without banning anything, and an administration that wants power for data centres quickly may decide not to bar the cheapest batteries in the world — in which case the market’s non-reaction is simply correct.

Sources

Federal Register (Executive Order 14421), Aug 31 2026 · Federal Register (DOE request for information), Sep 9 2026 · Holland & Knight, Sep 2026 · mgrid.org, Aug 26 2026 · Energy-Storage.News, 2026 · Fluence Energy blog (Section 301 tariffs), 2026 · BigGo Finance (Fluence guidance cut), Aug 2026