Following a second national security determination from the Department of War (DoW), the Federal Communications Commission (FCC) updated the Covered List entry for foreign-produced power inverters on August 20 by narrowing the covered product category, clarifying the applicable connectivity criteria, and revising the definition of “foreign-produced.”  Specifically, the FCC: 

1. Limited Coverage to Utility-Interactive Inverters. The revised definition covers only utility-interactive inverters, as defined in sections 2.1.23 and 2.1.52 of Underwriter Laboratories (UL) 1741, a widely used safety standard for inverters and related equipment used with distributed energy resources.  These are devices that change DC power to AC power, including bidirectional devices, and are intended for use in parallel with an electric utility to serve common loads and sometimes deliver power to the utility.  DoW determined that inverters incapable of connecting to the utility grid generally do not pose risks to the public utility grid.  Instead, their risks are generally limited to local impacts that can be managed at the local-system level.
2. Clarified the Connectivity Criteria. A utility-interactive inverter is covered if it contains, or is designed, equipped, or configured to accept, a component enabling remote communication, control, sensing, data collection, or monitoring.  The revised definition expressly encompasses both wired and wireless connectivity, including Ethernet, Wi-Fi, cellular, Bluetooth, and similar connections.  Coverage may therefore apply even if the communications component is not installed, provided the inverter is designed, equipped, or configured to accept it.
3. Excluded Certain Inverters Treated as Domestically Produced. The FCC revised the definition of “foreign-produced power inverters” to exclude inverters that satisfy either of two domestic-production standards:
   • Section 45X tax-credit eligibility. Power inverters eligible for the Advanced Manufacturing Production Credit under 26 U.S.C. § 45X for domestic production are not treated as foreign-produced.
   • Buy American Act status. Inverters qualifying as “domestic end products” under 48 C.F.R. § 25.101(a) are also excluded.  As described in the notice, the inverter must be manufactured in the U.S., and the cost of its domestic components must exceed 65% of total component cost for items delivered in calendar years 2024 through 2028, increasing to 75% for items delivered beginning in 2029.
4. Preserved the Conditional Approval Process. Foreign-produced utility-interactive inverters that otherwise satisfy the revised definition may still receive a Conditional Approval from DoW or the Department of Homeland Security (DHS) determining that the devices do not pose unacceptable national security risks and exempting them from the Covered List.
5. Confirmed Continued Application of the Permissive-Changes Waiver. The FCC confirmed that its July 28 waiver continues to permit certain Class I and Class II permissive changes (minor changes that do not degrade authorized characteristics and more substantial changes that may affect them and generally require FCC review), specifically qualifying software and firmware updates intended to mitigate consumer harm, for covered power inverters authorized before their addition to the Covered List.