On November 4, 2026, Utility Dive reported that manufacturers, analysts and security experts are raising cost and practicality concerns about Executive Order 14421, a new pressure point for the battery storage supply chain. The federal order lets the Energy Secretary block foreign-produced grid equipment, including battery energy storage systems and inverters. The order directs the Department of Energy (DOE) to publish implementing rules, as needed, within 120 days of its August 26, 2026 signing, a deadline that falls on December 24, per the order itself and Utility Dive. For Southern California owners, developers and fleet managers buying batteries, inverters and switchgear for 2027 projects, that is a new variable, and DOE's first rules could come as soon as late December, per Utility Dive.
What the order does, and its status
Status: signed executive order; implementing rules pending. Executive Order 14421, signed August 26, 2026, declares a national emergency over foreign-produced equipment in the U.S. bulk-power system. It authorizes the Energy Secretary to prohibit the purchase, import or installation of equipment that poses an undue national security risk, and to set conditions on equipment already installed, with phased compliance allowed.
The equipment list in the order is broad. It names substation transformers, "utility-scale and other grid-connected inverters," battery energy storage systems, uninterruptible power supplies for critical infrastructure, generators, high-voltage circuit breakers, protective relays, metering and industrial control systems. Associated software, firmware, remote access and maintenance services can also be considered.
Two other provisions matter to buyers. The order lets DOE set criteria to prequalify equipment and vendors and publish a list, per the order text. And DOE has already gathered input: it published a request for information in the Federal Register on September 9, 2026 (docket DOE-HQ-2026-1123), with comments due 30 days after publication, asking how to treat existing equipment, prequalification and items that have uses beyond the bulk-power system.
Why the battery storage supply chain is under pressure
The concern is supply. The National Electrical Manufacturers Association said supply chains are "already approaching a breaking point" for many electrical products, as reported by Utility Dive. Wood Mackenzie estimates 2026 shortages of about 15% for power transformers and 8% for substations, and says China supplied nearly all U.S. bulk-power equipment imports since the start of 2025, per its August 31 release.
Storage is the most exposed segment. BloombergNEF expects deployment delays for many grid-scale battery projects while developers wait for guidance, find other suppliers or redesign, and says some projects could be canceled, according to Utility Dive reporting. The same report cites BloombergNEF data that Chinese companies supplied about 40% of U.S. inverter volumes in 2025, and International Energy Agency data that China holds about 80% of global lithium-ion supply chain production capacity.
There is a counterweight. BloombergNEF noted that four U.S. battery plants came online in 2026, with more expected by year end, per the same Utility Dive report. DOE launched a Battery Manufacturing Accelerator on October 28 with a goal of a domestic "mine-to-market" battery supply chain by 2030, as Utility Dive reported on November 3.
Does it reach a commercial building in Southern California?
The short answer: the text does not say, and DOE's rules will decide. The order defines the bulk-power system as transmission facilities and control systems, including lines rated at 69 kV or more, plus generation needed for reliability, and it excludes facilities used in local distribution. A law firm analysis from Morgan Lewis reaches the same reading: distribution networks and transmission below 69 kV are outside the order.
The DOE request for information does not use the terms behind-the-meter or distributed energy resources, and it does not mention EV chargers. It does ask how DOE should separate equipment used in the bulk-power system from items with broader uses. So a battery and solar system serving a single commercial building on a distribution circuit appears to sit outside the definition as written, though distribution equipment tied to the bulk system could still draw scrutiny, per Utility Dive. Larger projects that connect at substations or transmission voltage are closer to the order's core. That is a reading of the current text, not a ruling.
The indirect effects can reach everyone. When utilities compete for transformers and substation equipment, service upgrades and interconnection work can take longer. That matters for a California grid supported by 21,112 MW of battery capacity, including nearly 16,000 MW of utility-scale storage in the state and about 3,000 MW in smaller systems at homes, schools, farms, businesses and industrial facilities, per the California Energy Commission.
This order is separate from the Treasury foreign entity of concern (FEOC) rules that affect federal tax credits, which BloombergNEF said also apply to batteries and inverters, per Utility Dive. We covered the credit side in our post on the commercial solar tax credit 2027 deadline.
What this means for your project
The order does not by itself bar a purchase today; DOE still has to identify risky equipment and write rules, per the order text. The useful move now is asking better questions before equipment is ordered. Practical steps for owners, developers and fleet managers planning work in 2027:
- Know where the equipment comes from. Ask your contractor for the country of manufacture of batteries, inverters, switchgear and controls, and who provides remote monitoring and firmware updates.
- Review the change-in-law language with your attorney. Look at how your supply and construction contracts handle new federal restrictions on sourcing or continued use. Morgan Lewis flags this as a first step.
- Ask early about utility upgrades. If your project needs a new service, transformer or panel upgrade from SCE or SDG&E, request the timeline at the start, since Wood Mackenzie estimates a 15% power transformer shortage in 2026, per its release.
- Watch for DOE's implementing rules. The order sets a December 24 target. Look for how DOE treats customer-sited systems, any prequalified vendor list and any phase-in for existing equipment.
- Keep your records. Equipment data sheets, purchase dates and installation dates may matter if DOE sets conditions on equipment based on when it was bought or installed.
How Burge Energy can help
Burge Energy designs and builds commercial solar, battery storage and EV charging for new buildings and existing sites across Orange County and Southern California. We can help you compare equipment options with documented origin, plan schedules around utility upgrades, coordinate interconnection with SCE and SDG&E, and screen your project for available incentives on our Incentives page. Burge has been building in Southern California since 1977 and is licensed for solar, storage and EV charging work. Request an Energy Assessment to plan your project around the new rules, or learn more about Burge Energy.
Sources
- Executive Order 14421, Declaring a National Emergency to Secure the United States Bulk-Power System, The White House, August 26, 2026
- Securing the United States Bulk-Power System, Request for Information (FR Doc. 2026-18370), U.S. Department of Energy, September 9, 2026
- California surpasses 21,000 megawatts of battery resources supporting the state's electric grid, California Energy Commission, August 7, 2026
- US executive order banning Chinese bulk power equipment set to worsen critical transformer shortage, Wood Mackenzie, August 31, 2026
- Trump ban on foreign grid components sparks industry concern over cost, practicality, Utility Dive (reporting), November 4, 2026
- Trump grid order likely to cause energy storage delays, cancellations: BloombergNEF, Utility Dive (reporting), September 1, 2026
- Can 'BattMan' secure the US battery manufacturing supply chain?, Utility Dive (reporting), November 3, 2026
- Bulk-Power System Executive Order Adds a New Grid Supply Chain Compliance Layer, Morgan Lewis, August 28, 2026
Incentive eligibility depends on project specifics. Confirm with your tax advisor and the program administrator before relying on any figure here. This article is general information, not legal, tax or financial advice. Facts are current as of November 5, 2026; federal rules under the order are pending and can change.