Yesterday, following a second National Security Determination from the Department of War (“DoW”), the Federal Communications Commission (“FCC”) clarified the scope of its ban on foreign-produced “power inverters,” a category of devices added to the FCC’s “Covered List” in late July. This new determination revises and narrows the definition of power inverters to more “accurately reflect” the types of inverters that pose unacceptable national security risks—a move that, like its carve-out earlier this year of toy drones from foreign-produced unmanned aircraft systems, may signal a willingness to take a more nuanced approach to defining the classes of devices that pose national security risks. At the same time, this new determination clarifies which of these devices qualify as “foreign-produced,” a move that simultaneously (1) provides an alternate path for an inverter not to be foreign-produced and (2) may signal that the FCC and national security agencies are taking a more limited view of what devices are U.S.-produced and therefore outside the scope of the ban.
In a Public Notice issued yesterday, the FCC’s Public Safety and Homeland Security Bureau revised the Covered List definition of “power inverters.” The revised definition appears below alongside the earlier definition for reference:
| Original Definition (July 28, 2026) | New Definition (August 20, 2026) |
|---|---|
The term “power inverter” shall mean a device: (a) A bi-directional power device or system that converts direct current electricity to alternating current electricity, or converts alternating current electricity to direct current electricity, to include microinverters, string inverters, central inverters, and hybrid (battery-based) inverters; and (b) Contains components that enable remote communication, control, sensing, data-collection, or monitoring through Wi‑Fi, cellular, Bluetooth, or other similar connections. | The term “power inverter” shall mean an electronic device that: (a) Changes dc power to ac power, to include bidirectional devices, that is intended for use in parallel with an electric utility to supply common loads and sometimes deliver power to the utility, i.e., a utility-interactive inverter as that term is defined in UL 1741 sections 2.1.23, 2.1.52; and (b) Contains, or is designed, equipped, or configured to accept, a component that enables remote communication, control, sensing, data-collection, or monitoring through Ethernet, Wi‑Fi, cellular, Bluetooth, or other similar connections, whether wired or wireless. |
These qualifiers—“intended for use in parallel with an electric utility to supply common loads and sometimes deliver power to the utility”—together with the cross-reference to the relevant safety and certification standard (UL 1741), narrow the definition. As the underlying National Security Determination explains, the revised definition excludes power inverters “that are incapable of connection to the utility grid,” more closely tying that definition to the identified national security risks that focus on the introduction of vulnerabilities in the interconnected power system rather than local systems.
At the same time, for devices that fall within this narrower functional definition, the second prong expressly covers components that enable wired connectivity. That change brings within scope devices designed, equipped, or configured to accept network connections such as Ethernet, not just devices with wireless capabilities—again tying this definition more closely to the identified national security vulnerabilities that can be introduced regardless of the kind of connectivity.
The second clarification in yesterday’s action concerns the definition of “foreign-produced” power inverters. This matters because only foreign-produced devices are subject to the Covered List prohibition: once covered, they may not receive FCC equipment authorization and therefore cannot be imported, marketed, or sold in the United States.
The FCC has clarified that “foreign-produced” means (the earlier definition appears alongside the new definition for reference):
|
Original Definition (July 28, 2026) |
New Definition (August 20, 2026) |
|---|---|
|
The term “foreign-produced” refers to any article that does not qualify as a “domestic end product,” as that term is defined in 48 CFR § 25.101(a). | The term “foreign-produced power inverters” shall mean power inverters as defined above that are not either: (a) Eligible for the Advanced Manufacturing Tax Credit in 26 U.S. Code § 45X for domestic production; or (b) A domestic end product as defined in 48 CFR § 25.101(a) because they are manufactured in the United States and the cost of domestic components exceeds 65% of the total component cost for items delivered in calendar years 2024 through 2028 or 75% for items delivered starting in calendar year 2029. |
This change is notable for two reasons. First, by incorporating the domestic production standard of the Advanced Manufacturing Tax Credit under 26 USC § 45X, the Notice provides an alternate test for demonstrating that a power inverter is not “foreign produced.” This standard derives from the clean-energy tax incentive for certain energy-related components that was established under the Inflation Reduction Act in 2022 and amended last year by the One Big Beautiful Bill Act. Second, it specifies that within the Buy American Act’s (“BAA’s”) domestic end product standard set forth in 48 CFR 25.101(a), it is the “cost-of-components” test, in particular, that determines whether a product is or is not “foreign-produced.” By implication, this statement appears to foreclose the possibility of relying on the BAA’s commercially available off-the-shelf (“COTS”) waiver, which is also set forth in 48 CFR 25.101(a), to establish that a power inverter is not “foreign produced.”
Looking ahead, yesterday’s action could suggest that further Covered List-related definitional clarifications are forthcoming, particularly for “Advanced Robotic Devices,” the other category of equipment added to the Covered List in late July. In addition, the clarification to the definition of “foreign-produced” may signal that the FCC and national security agencies are preparing to exclude the COTS-based exception for other classes of devices on the Covered List. Under the original definition, that exception provided a limited carve-out from the cost-of-components test otherwise required to demonstrate that a device is a “domestic end product” under the BAA.