Sungrow Shares Plunge as US Moves to Ban Chinese Solar Inverter Imports

Sungrow Power Supply, the world's largest maker of solar inverters, saw its shares fall sharply on July 1, 2026, after news that the United States is preparing to block imports of Chinese-made inverters on national security grounds. The stock, listed in Shenzhen, dropped by as much as 20 percent during the session, its steepest intraday fall in more than a year, erasing roughly 6 billion dollars in market value in a single day.

The sell-off followed a Reuters report published on June 30 that the Federal Communications Commission is drafting a rule to ban new foreign models of solar and battery inverters from entering the US market. Inverters convert the direct current produced by solar panels and batteries into alternating current that homes, businesses, and the grid can use. American officials worry that inverters built in China could contain hidden functions capable of disrupting the power grid. The proposed rule would target only new models seeking market entry and would not apply to equipment already installed. According to the report, the measure could take effect before the end of 2026, though the draft may still be revised or dropped.

China dominates global inverter production, with Sungrow and Huawei leading the sector. Roughly a quarter of the inverters imported into the United States in 2024 came from China, so a ban would cut off a significant share of supply and force US solar and storage developers to look elsewhere.

The move is part of a wider effort by Washington to reduce reliance on Chinese technology in critical infrastructure. In the summer of 2025, the White House National Energy Dominance Council asked the Commerce Department to prepare a fast-tracked ban, but that attempt stalled. The FCC has since taken its own path, having already restricted new foreign models of drones and routers in late 2025 and again in early 2026. The renewed push also follows a decision by the European Commission in May 2026 to bar Chinese inverters from publicly funded energy projects, a sign of growing alignment between Washington and Brussels.

Concern intensified after US researchers reported in 2025 that they had found undocumented communication components inside Chinese-made inverters during grid security inspections. The US Department of War is already barred from buying solar cells, modules, or inverters produced by companies deemed foreign entities of concern, a category that covers Chinese manufacturers.

The Chinese Embassy in Washington rejected the plan, arguing that the United States is stretching the idea of national security to unfairly target Chinese firms. As of July 1, 2026, the FCC rule remains in draft form and no final restriction has been issued, leaving suppliers, developers, and investors waiting to see how far the measure will go.