Trump Grid Order Puts Battery Storage

President Donald Trump's executive order restricting foreign-made bulk power equipment will likely cause delays and cancellations for U.S. battery energy storage projects. BloombergNEF analysts warned of near-term risk in a note published Friday.

The order, effective August 26, seeks to prevent certain foreign-made batteries, transformers, inverters, and related digital products from connecting to the U.S. power grid. It also grants Energy Secretary Chris Wright discretion to impose conditions on the continued use of equipment installed before that date.

Supply Chain Dependencies Create Vulnerability

U.S. battery deployments face significant exposure due to heavy reliance on Chinese manufacturing. China accounts for a large share of global lithium-ion battery supply chain production capacity. Many U.S. projects also use inverters made by Chinese companies.

Zoe Zakrzewska, a BNEF trade and supply chains analyst, said the new order compounds challenges from the Foreign Entity of Concern rules finalized by the U.S. Treasury Department in February. Those rules restrict reliance on Chinese-tied firms for projects seeking federal tax credits.

She added that the new executive order could likely be the nail in the coffin for Chinese battery and inverter manufacturers selling in the US market.

Project Developers Face Immediate Disruption

Deployment delays are likely as developers await administrative guidance, seek alternative suppliers, or redesign projects. The BNEF note states that developers who have procured but not yet installed equipment may wait to move forward until the order's application is clarified.

Some projects may be canceled altogether if the prohibition on lower-cost Chinese imports makes them uneconomical. The risk is heightened for projects that began construction before a January 1, 2026, deadline.

Lawyers with Morgan Lewis's energy practice advised developers and operators to map assets affected by the order, assess regulatory risk in supply contracts, expand supply chain diligence, and prepare to mitigate or replace affected equipment already installed.

Industry Seeks Clarity on Implementation

Electrical equipment manufacturers reacted cautiously to the order. Bridget Bartol, head of industry and regulatory affairs at the National Electrical Manufacturers Association, said there is a need for a lot more clarity, particularly regarding software products.

Zakrzewska said guidance on how the order applies should be issued at some point, providing developers with a path forward.

Long-Term Outlook and Domestic Manufacturing

The longer-term impact may be lessened by new manufacturing capacity coming online in the United States and in countries not covered by the order. Zakrzewska noted that several battery plants have started operations in the U.S. so far this year.

Manufacturers could see the new restrictions as an opportunity to add more domestic battery and inverter production capacity in the coming years. This shift would represent a significant move in grid hardening and supply chain diversification for the American power sector.

The order follows a narrower one signed during Trump's first term that blocked installations of bulk power system equipment with ties to a foreign adversary. Both Trump and former President Joe Biden have described China as a U.S. adversary.