The U.S. Federal Communications Commission’s (FCC) recent decision to add foreign-made power inverters to its “Covered List” is prompting the U.S. photovoltaic and energy storage markets to accelerate the shift toward domestically manufactured equipment.
An analysis shared Friday by Wood Mackenzie suggests the U.S. industry is well positioned to respond, with manufacturers’ announced plans indicating that domestic annual production capacity for PV inverters and power conversion systems (PCS) used in energy storage systems (ESS) could exceed 100 GWac by the end of 2027.
On July 28, the FCC added foreign-made power inverters to its list of equipment deemed to pose a national security risk. The decision prevents the authorization of new foreign-made models subject to FCC equipment authorization procedures, effectively restricting their import, marketing, and sale in the United States. The measure is based on concerns over cybersecurity and vulnerabilities in critical supply chains.
However, the scope of the regulation remains subject to technical questions. The current definition focuses on “power inverters” as well as specific wireless communication and remote-control functions. This creates uncertainty over how the rule will apply to certain categories of utility-scale inverters, both in PV plants but also in battery energy storage systems (BESS), that can operate through wired connections. Wood Mackenzie said future FCC guidance will be critical in determining which equipment falls under the regulation.
The potential impact of the measure is significant given the U.S. market’s reliance on foreign-made equipment. Over the past decade, more than 200 GWac of PV inverters have been supplied to the U.S. commercial, industrial and utility-scale markets. More than 90% of that equipment was imported, including more than 70 GW from China-based manufacturers.
The market share of Chinese manufacturers has also increased in recent years. According to Wood Mackenzie, Chinese suppliers accounted for nearly 50% of the U.S. inverter market in 2024 and 2025.
The U.S. industry now has a significantly larger domestic manufacturing base than it did a few years ago. Wood Mackenzie estimates that manufacturers’ announced projects could push annual U.S. production capacity for PV inverters and PCS above 100 GWac by the end of 2027, provided the planned investments materialize.
Shifting production to the United States is expected to have a direct impact on prices. Domestically manufactured equipment currently carries higher costs for components, labor and manufacturing processes. Consequently, Wood Mackenzie anticipates that average inverter prices will increase by 2027 as developers replace lower-cost imports with domestic alternatives.
In the medium to long term, however, prices could moderate as production scales up and competition among U.S. manufacturers intensifies. This trend could be partially offset from 2030 onward by the phaseout of U.S. manufacturing tax credits, particularly in the residential and commercial segments.
For PV and storage developers, the higher cost of domestic equipment represents an additional expense, but it could also reduce exposure to supply-chain disruptions and future regulatory changes.
Some project owners are already raising concerns about whether existing equipment will continue to receive certain firmware updates if manufacturers are affected by the new restrictions. For now, the FCC has indicated that the measure primarily affects new models that have not yet received authorization, although it retains the authority to revoke existing authorizations under certain circumstances.
ESS News has contacted Wood Mackenzie to seek further information about the relative size of the predicted PCS manufacturing in the 100 GW figure.
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