What Clean Energy Developers Need to Know About the FCC’s New Inverter Restrictions

An inverter is restricted only when both conditions apply: it performs a grid-interactive power-conversion function and it has, or is designed to accept, remote-connectivity hardware. Even then, it can pass the screening if it qualifies under Section 45X, meets the federal domestic end product standard, or has a Conditional Approval.

The first condition is function. It generally includes grid-connected inverters used in solar arrays, battery energy storage systems and other equipment that converts direct current to alternating current while operating in parallel with a utility. A microgrid inverter meets this condition when the system is designed to operate in parallel with the utility; a purely islanded, off-grid inverter does not. The FCC definition draws from UL 1741 sections 2.1.23 and 2.1.52.

The second condition is connectivity. In clean energy projects, this includes communication hardware used for SCADA connections, remote dispatch, cellular monitoring, data collection, remote control and over-the-air firmware updates. Ethernet, Wi-Fi, cellular, Bluetooth and similar wired or wireless connections count. A model can meet this condition even when the connectivity component is removable or ships separately, as long as the inverter is designed or configured to accept it.

The FCC analysis focuses on the exact model and where it is produced, not the manufacturer’s name or headquarters. An inverter made at a U.S. plant owned by a foreign company is not automatically treated as foreign-produced; it may pass if it satisfies the Section 45X or domestic end product test.

The FCC is not revoking authorizations already granted. Models authorized before July 28, 2026 may still be imported, sold and used, and previously purchased equipment is not affected. New models, however, must qualify for authorization under the current restriction.

Previously authorized models can continue to receive qualifying software and firmware updates. The FCC waived the restriction for those Class I and Class II permissive changes, but the waiver does not cover hardware changes. If a project depends on future hardware modifications or long-term component availability, confirm the path with the supplier before procurement.

This is why verification must match the exact equipment being purchased to its FCC authorization record, configuration and the rules in effect at the time of review.

An inverter that meets both FCC conditions can still pass the screening in either of two ways: it can qualify for domestic production under Section 45X, or it can meet the federal domestic end product standard.

The first path is Section 45X. An inverter eligible for the Advanced Manufacturing Production Credit for U.S. production is not treated as foreign-produced for this FCC restriction. Section 45X eligibility is not established by a supplier statement alone. For eligible components sold in taxable years beginning after July 4, 2025, the material assistance rules limit content from a prohibited foreign entity. IRS Notice 2026-15 provides interim guidance and safe harbors for the required cost calculation and records.

The second path is the federal domestic end product standard at 48 CFR Section 25.101(a). This is not the clean energy domestic content bonus. It is a separate federal test. An inverter qualifies when it is manufactured in the United States and domestic components exceed 65 percent of total component cost for items delivered in 2024 through 2028, or 75 percent beginning in 2029.

Both paths require evidence tied to the specific model, production location, component costs and applicable eligibility rules. A general marketing claim that equipment is made or assembled in the United States does not prove that either test is met.

Yes. A manufacturer producing inverters outside the United States can request a national security review. The Department of War or Department of Homeland Security may grant a Conditional Approval for a specific device. Once the FCC receives that determination, it updates the Covered List and issues a public notice.

Submitting a request does not clear the inverter. Before relying on a Conditional Approval, confirm that the approved device appears on the current Covered List and retain the supporting documentation.

Authorization status determines whether the selected model can enter the U.S. market. An inverter may represent a small share of total project cost and still delay equipment delivery, interconnection or financing if its status is discovered too late.

Screening before final procurement gives the developer time to select another model, obtain stronger supplier support or add contract protections. It also creates a defensible record for financing parties and legal counsel.

The project file should show how the team reached its conclusion for the exact make and model under review. Depending on the facts, that record includes:

• The specific inverter make, model and configuration, including any connectivity components
• The FCC identifier and equipment authorization record, with its date. Models authorized through the Supplier’s Declaration of Conformity process carry no FCC ID, so confirmation may require manufacturer records
• Purchase and delivery timing relative to July 28, 2026
• Manufacturing and production-location information
• Support for Section 45X eligibility or domestic end product treatment, including component cost information where the domestic end product test applies
• Any applicable Conditional Approval
• The version and date of the Covered List and FCC guidance reviewed

The last item matters because the FCC updates the Covered List when it receives additional national security determinations. The power inverter entry changed twice in under a month, so conclusions should be reconfirmed at procurement and financing milestones.

Screen the exact inverter model before procurement closes, while alternative equipment and contract protections are still available. Early screening prevents an authorization issue from becoming a late equipment, schedule or financing problem.

Empact evaluates every path that can determine the outcome: the model and configuration, grid function and connectivity, FCC authorization history, production location, Section 45X eligibility, prohibited foreign entity restrictions, the domestic end product calculation, any Conditional Approval, and the limits on future software, firmware or hardware changes. Supplier claims are tested against FCC, IRS and procurement records so the conclusion is supported by evidence.

Empact is the market leader and largest provider of clean energy tax credit compliance. That experience extends across FCC, domestic content, prohibited foreign entity and supply chain requirements, giving developers one compliance partner and a clear, defensible record for procurement, financing and diligence.