ENPH, SEDG Stocks Surge After Reported Plan To Ban Chinese Inverters In US – Retail Says It Adds ‘Gasoline To A Fire That Was Already Ripping’

According to a Reuters report, the U.S. Federal Communications Commission is drafting a rule that would apply to new foreign inverter models and could be published as early as this year.

• The move was in part influenced by Europe’s May decision to ban Chinese-made inverters from publicly funded energy projects.
• The rule is the latest precautionary step proposed by the U.S. to protect critical infrastructure and is part of a broader measure to safeguard technology and national security interests. 
• The Trump administration previously mulled restricting the import of inverters from China.

Shares of Enphase Energy (ENPH) and SolarEdge (SEDG) climbed on Tuesday after a media report said the Trump administration is planning to ban imports of foreign inverters, citing concerns that China could disrupt power supplies by interfering with energy infrastructure that uses them.

At the time of writing, both stocks were up more than 10% in premarket trading, while ENPH was among the top ten trending tickers on Stocktwits.

FCC Said To Draft Rules To Ban Chinese Inverters

According to a Reuters report, the U.S. Federal Communications Commission is drafting a rule that would apply to new foreign inverter models and could be published as early as this year.

Inverters convert direct current into alternating current, enabling solar fields and battery systems to connect to the power infrastructure. Sources told Reuters that the move was in part influenced by Europe’s May decision to ban Chinese-made inverters from publicly funded energy projects.

Ban Was Previously Considered

The rule is the latest precautionary step proposed by the U.S. to protect critical infrastructure and is 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.

The Trump administration previously mulled restricting the import of inverters from China, the report said, citing multiple sources. Last summer, the White House's National Energy Dominance Council instructed the Commerce Department to draft an expedited ban, but those efforts stalled.

What Do Retail Traders Think About ENPH And SEDG?

On Stocktwits, retail sentiment on ENPH turned ‘neutral’ and on SEDG changed to ‘bullish’ over the last 24 hours, from ‘bearish’.

One user on the platform said that the report is a catalyst for both stocks and that this adds “gasoline to a fire that was already ripping.”

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Another sees the report as a huge positive for both companies.

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ENPH stock has gained about 91%, while SEDG has surged nearly 92 % so far this year, outperforming the S&P 500.

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