Enphase Energy (ENPH) shares surged 17.5% on Monday, while SolarEdge Technologies (SEDG) rose 11% and Sunrun (RUN) gained 7% following a Reuters report that the Trump administration is drafting a ban on imports of foreign inverters over national security concerns. According to Investing.com reports, retail sentiment on ENPH turned 'neutral' and on SEDG changed to 'bullish' over the last 24 hours, with one user describing the report as 'gasoline to a fire that was already ripping.' The stocks have already delivered exceptional returns this year, with ENPH gaining about 91% and SEDG surging nearly 92% so far in 2025, significantly outperforming the S&P 500. Both stocks were among the top trending tickers on Stocktwits as investors reacted to the potential policy development.
The Trump administration is drafting rules to ban imports of certain foreign energy inverters, which connect solar projects and battery storage systems to the power grid, over concerns that China could use the equipment to disrupt electricity supplies. According to reports from Reuters, the proposed rule would specifically target Chinese manufacturers as the primary focus of the ban. The rule being drafted by the U.S. Federal Communications Commission (FCC) would apply to new foreign models of inverters and could be published as early as this year, according to five sources cited by Reuters. Inverters convert direct current into alternating current, enabling solar fields and battery systems to connect to the power infrastructure.
The proposed ban addresses growing concerns about potential security risks posed by Chinese-made energy equipment. As reported by Reuters, the Trump administration revived the effort in part after the European Commission decided in May to ban Chinese-made inverters from publicly funded energy projects. This coordinated international approach reflects shared concerns about the potential for foreign equipment to compromise critical power infrastructure, with Chinese manufacturers identified as the primary source of these security concerns. The administration has raised concerns that China could use these devices to disrupt power supplies, representing the latest precautionary step proposed by the U.S. to protect critical infrastructure and part of a broader measure to safeguard technology and national security interests.
The Chinese Embassy in Washington told Reuters it 'firmly opposes the overstretching of the concept of national security and its unjustified suppression of Chinese companies,' adding that the U.S. should provide 'a fair, just and non-discriminatory environment' for Chinese businesses. According to multiple sources cited by Reuters, the Trump administration previously mulled restricting the import of inverters from China, with the White House's National Energy Dominance Council instructing the Commerce Department to draft an expedited ban last summer, though those efforts stalled. The FCC and the White House declined to comment on the draft measure, while sources cautioned that the U.S. proposal could still be modified or shelved altogether. China is the world's largest maker of inverters, led by Sungrow Power Supply and Huawei, and has been growing its share in the Western inverter market by driving down prices.
The proposed rules would restrict imports of new foreign inverter models, potentially affecting the supply chain for solar and battery storage projects in the United States. According to sources familiar with the matter, the rule could be published as early as this year, though the specific timeline remains subject to regulatory processes. The initiative represents a significant policy shift in how the US approaches foreign technology imports in critical infrastructure sectors, with Chinese manufacturers being the primary target of these new restrictions. The move was influenced by Europe's May decision to ban Chinese-made inverters from publicly funded energy projects, demonstrating coordinated international action on these security concerns, though sources noted the U.S. proposal could still face modifications or be shelved entirely.
