A New Order Restricts Foreign Grid Equipment. Most Commercial Buildings Are Below the Line It Draws.
By Keith Reynolds | Publisher & Editor, ChargedUp!
Executive Order 14421, signed August 26, lets the Department of Energy block or unwind purchases of foreign-made electrical equipment, and in some cases require equipment already installed to be removed. Early coverage has suggested every property owner needs to audit their energy suppliers. The order sets a voltage threshold that most commercial solar, battery and charging equipment falls well below. Knowing where that line sits determines whether this is your problem.
What the Order Does
The order declares a national emergency concerning foreign-made equipment used in the country's high-voltage electrical network, invoking emergency economic powers. It authorizes the Department of Energy to prohibit, place conditions on, or reverse transactions involving covered equipment connected to what it calls Covered Foreign Entities, a category that notably includes China. It builds on a similar order issued in 2020 and also directs changes to federal purchasing rules.
The equipment list is broad: transformers, inverters, generators and battery storage systems, along with the software, firmware and remote access built into them. The Department of Energy has 120 days to write the regulations that will define which foreign entities are covered, how licensing works, and which vendors are pre-approved. Until those rules are published, no specific transaction is actually prohibited.
The Line Is Drawn at 69 Kilovolts
The order applies to equipment operating at or above 69 kilovolts. That number is what separates the businesses affected from those that are not, and it is worth understanding plainly.
Electricity travels long distances at very high voltage, because high voltage loses less energy over distance. It then gets stepped down repeatedly as it approaches the end user. Transmission lines run at tens or hundreds of thousands of volts. By the time electricity reaches a typical commercial building, it has been reduced to 480 volts or less for use inside the building. The 69 kilovolt threshold, meaning 69,000 volts, sits up in the transmission portion of that chain.
Rooftop solar on a shopping center, a battery in a warehouse electrical room, and vehicle chargers in a parking structure all operate far below that level. They connect to the local distribution network, not to the high-voltage transmission network the order addresses. For the ordinary commercial property, this order does not reach the equipment on site.
Who Is Actually Exposed
Three categories of owner should be paying attention now.
The first is anyone developing a project large enough to connect directly to the transmission network. Large data centers, major industrial facilities and utility-scale generation and storage projects frequently connect at transmission voltage and own equipment on that side of the meter.
The second is owners of campuses or large industrial sites that operate their own substations. A private substation stepping electricity down from transmission voltage puts that equipment squarely within the order's scope.
The third is anyone with such equipment already installed. This is the provision that deserves the most attention, because the order does not automatically exempt equipment purchased before August 26. The Secretary of Energy may impose conditions on continued use, including requiring owners to inventory assets, isolate them from network connections, add monitoring, disconnect them, or replace them entirely. The order requires the Secretary to weigh reliability, the availability of secure replacements and continuity of service, and allows compliance to be phased.
The Indirect Effect Is Larger Than the Direct One
For most commercial owners, the consequence of this order arrives through pricing and availability rather than through compliance. Transformers and other electrical equipment already carry long delivery times, with some high-capacity units running years. Restricting a segment of global supply into a market that is already short does not shorten those queues.
Owners planning any project that requires a utility service upgrade should expect equipment cost and delivery time to be affected even though the order does not apply to the equipment inside their building. The transformer the utility needs to serve the site may well be covered, and that timeline belongs in project schedules.
A second indirect effect works in the opposite direction. Domestic manufacturing commitments become more valuable when foreign supply faces restriction, which is part of why supply agreements for domestically produced batteries and components have been announced at an increasing pace.
What to Do
1. Determine the voltage at which your property connects to the grid. If the answer is below 69 kilovolts, which it will be for the large majority of commercial buildings, the order does not reach your onsite equipment.
2. If you operate a private substation or have a project connecting at transmission voltage, inventory that equipment by manufacturer and country of origin now, before the regulations are published.
3. On any project requiring a utility service upgrade, ask the utility whether equipment availability or cost is expected to be affected, and build the answer into the schedule.
4. Add country-of-origin questions to procurement for large equipment even where the order does not apply, because federal purchasing rule changes and utility practices tend to migrate into general specifications over time.
5. Watch for the implementing regulations, expected within 120 days. The definitions in those rules, not the order itself, will determine actual obligations.
The Bottom Line
This order is significant for utilities, transmission developers and large industrial and data center projects. It is not, on its face, a compliance obligation for a landlord with solar panels on a roof or batteries in a utility closet. The realistic effect on ordinary commercial property runs through equipment prices and delivery schedules, which were already the hardest part of getting an electrical project built.
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Frequently Asked Questions
What does Executive Order 14421 do?
Signed August 26, it declares a national emergency regarding foreign-made high-voltage electrical equipment and authorizes the Department of Energy to prohibit, condition or reverse transactions involving covered equipment tied to designated foreign entities, including equipment already installed.
Does it apply to rooftop solar or a battery in my building?
Generally no. The order applies to equipment operating at or above 69 kilovolts, which is transmission-level voltage. Commercial rooftop solar, building batteries and vehicle chargers operate far below that.
What is the 69 kilovolt threshold?
It is 69,000 volts, a level found in the high-voltage transmission network rather than inside buildings, where electricity has been stepped down to 480 volts or less.
Can the government require removal of equipment already installed?
The order permits the Secretary of Energy to impose conditions on equipment installed before August 26, potentially including monitoring, disconnection or replacement, while weighing reliability and the availability of secure replacements. Compliance may be phased.
How does this affect a typical commercial property?
Mainly through the cost and delivery time of utility equipment such as transformers, which were already constrained. Owners planning service upgrades should expect schedule effects even though the order does not govern their onsite equipment.
