Staffing Losses Will Make it Challenging for DOE to Implement a Complex Order in 120 days

The U.S. has the largest interconnected power system in the world. The large scope of the EO and DOE’s RFI that cover a broad range of specific grid equipment make it clear that DOE will need sufficient staff with grid and supply chain expertise along with a robust, risk-informed prioritization of components in order to execute in this timeframe.

DOE’s Office of Cybersecurity, Energy Security, and Emergency Response (CESER) is tasked with leading development of the EO response and the implementing rules. CESER is tasked with responding to and preparing for energy sector threats (both physical and cyber) and had an annual budget of $190 million in fiscal year 2026. Other offices with grid equipment and supply chain expertise include the Office of Strategy and Technology Roadmaps, the Office of Critical Minerals and Energy Innovation (CMEI), and the Office of Electricity (OE). It is likely that DOE would need technical support from multiple program offices. 

However, it is not clear how much staff expertise remains in these offices to execute. DOE lost nearly 2,700 career staff from February 2025 to May 2026. CESER total staff fell from a total of 96 staff to 64 during the first six months of 2025 and the FY27 proposed budget published early in 2026 lists only 58 total full-time employees - a decline in full time staff of nearly 40% since the start of 2025. It is likely that DOE will supplement existing headquarters staff with national laboratory and Power Marketing Administration (PMA) staff in assessing and implementing the EO. The 120-day timeframe also does not provide adequate time for meaningful engagement with external experts and stakeholders, which is necessary for robust and practicable implementation.

The task is complex: staff need to evaluate threats for existing equipment; prioritize where and how to prohibit their use while fully understanding the possible implications of doing so; understand existing markets; incorporate full supply chain information; and examine domestic alternatives.

Even simply defining equipment, components, and subcomponents is very difficult. For example, implementing Build America, Buy America (BABA) and domestic-content provisions of the Inflation Reduction Act (IRA) shows that seemingly simple terms such as “component,” “subcomponent,” and “manufactured product” can require extensive guidance and industry engagement. DOE will need to establish clear functional boundaries, materiality thresholds, documentation expectations, and safe harbors so manufacturers and purchasers can determine compliance consistently. Uncertainty in definitions can delay compliance as firms don’t have the necessary specific guidance what is needed to secure procurement orders, and have cascading effects on power system maintenance and expansion.

The EO Adds Another Layer to Existing Supply Chain and Domestic Manufacturing Policies - Potentially Stymying Compliance 

EO 14421 imposes an additional layer of federal requirements for grantees, contractors, and taxpayers, on top of existing supply chain schemes relevant to certain grid equipment. If the lists and criteria DOE develops for the EO do not overlap and align with any existing compliance schemes, it will exacerbate the existing issue of a proliferation of layered and incompatible definitions for similar components and subcomponents of grid infrastructure - especially for federal contractors and federal awardees. 

Consider the following, overlapping schemes:

• Buy American statute and applicable FAR requirements apply to all direct federal procurement and restrict the acquisition of nondomestic supplies and generally require domestic or Trade Agreement Act compliant construction materials and equipment in covered federal contracts.

• The Build America, Buy America Act (BABA), applies to recipients and subrecipients of certain federal financial assistance awards for infrastructure, and are subject to its requirements for iron and steel, manufactured products, and construction materials where applicable. 

• Certain tax credit requirements for bonuses and elective pay for electricity generating equipment eligible for the production and investment tax credits (§§ 45, 45Y, 48, and 48E), are regulated under Treasury and IRS guidance, including Notice 2023-38 and subsequent guidance, which establishes specific tests, documentation, and certification requirements for those tax-credit purposes.

• The One Big Beautiful Bill Act (OBBBA) added further restrictions regarding Foreign Entities of Concern for certain taxpayers seeking tax credits and broader restrictions for certain facilities that receive “material assistance” from a Prohibited Foreign Entity, with IRS and Treasury again providing separate interim guidance. 

• Finally, parties contracting or receiving funding from DOE under the Infrastructure Investment and Jobs Act (IIJA) or annual appropriations may face additional restrictions under specific DOE award and contract terms. Specifically, a collection of battery manufacturing and recycling programs under IIJA are subject to DOE’s interpretation on Foreign Entity of Concern restrictions. 

The EO likely introduces a sixth compliance regime on top of the existing five above. A product's satisfaction of any one of the tests above does not necessarily establish that the product satisfies EO 14421, because the Order applies different concepts concerning foreign production; Covered Foreign Entities; national-security risks; and associated software, firmware, digital services, maintenance, and remote-access capabilities.

Without diligent policy efforts from DOE and other agency leadership, this definitional complexity will continue to increase in ways that undermine the intention of the policy and increase regulatory burden on grid expansion. 

Overall Impact Depends on the Details of DOE Implementation

The list of products and equipment covered by the order is very large. The unintended consequences of the EO on grid expansion; project development; developer uncertainty; and overall affordability and reliability depends on how broadly or narrowly the EO is implemented. 

A narrow implementation approach, truly targeting a limited set of high-risk components for which there are alternatives, could meaningly reduce risk. This would require close coordination with industry partners and original equipment manufacturers (OEMs), and harnessing thoughtful supply chain expertise from the national labs and across the United States Government (USG). 

DOE’s risk assessment could consider whether secure substitutes are commercially available; the lead time required to manufacture and qualify replacements; applicable safety and performance standards; warranty and interoperability implications; and whether removal of installed equipment would require planned outages. These factors do not eliminate security concerns, but they could inform mitigation requirements and implementation schedules. 

A broad implementation approach that covers a wide set of new and existing components will be very difficult to comply with quickly and could slow down grid expansion and scheduled replacement of existing equipment. For example, if there is a new approval process required for installation of foreign produced transformers, which previously did not require such a step for products from allied nations, it would likely slow down development of both data centers and new grid capacity already underway, as well as maintenance of existing grid capacity. If utilities cannot use transformers that they already have on hand or have on order, that can have significant and immediate impacts for the power system.

Even the uncertainty caused during the 120 day period when the requirements of any final rules/regulations are unknown may cause delays. This also highlights the critical need for DOE to be able to have the capacity not just to develop the rules/regulations but to continue to implement the EO after such requirements are published.

A workable implementation framework could include the following elements: 

1. Immediate attention to equipment presenting high consequences and exploitable remote-access risks; 

2. Mitigation or monitoring options for installed equipment where immediate replacement would threaten reliability; 

3. Transition periods for equipment lacking secure, qualified alternatives; and 

4. Periodic reassessment as domestic and allied capacity and threat information evolve, including a clear, public listing of restricted and/or allowable components and equipment with regular updates.

This would allow DOE to address the most consequential vulnerabilities first while providing industry with an administrable compliance pathway. 

DOE could establish clear eligibility criteria and, where feasible, publish regularly updated lists of prequalified equipment and vendors to reduce uncertainty for manufacturers and purchasers. Standardized manufacturer attestations, supported by appropriate verification and protection of confidential supply-chain information, could help inform this process. Existing third-party programs, such as the National Electrical Manufacturers Association’s (NEMA’s) “Make It American” certification, may provide useful domestic-content documentation, but should not be treated as establishing compliance with the EO’s separate national-security requirements.In the near-term, the Office of Management and Budget (OMB) Made in America Office should work with DOE to develop and publish a regularly-updated list of manufacturer self-attestations for approved inverters and grid components to support Federally funded projects.

DOE Implementation Could Have a Significant Impact on Solar, Wind, and Battery Deployment

It is important that DOE implementation addresses real supply chain vulnerabilities, and it is critical that the rules not be used to broadly disrupt and delay deployment of technologies like solar, wind, and storage. These technologies are a core component of the current power system and a significant source of planned power supply under development. Together, they are estimated to account for 92% of all new electric generating capacity in 2026 and are used both for meeting increasing load growth due to data center build-out and in providing additional supply to put downward pressure on electricity prices. 

While there is advancement in domestic manufacturing of these technologies, the supply chains are still reliant on overseas suppliers. For example, China, a covered foreign entity, accounts for around 85% of solar and 80% of lithium ion supply chain capacity respectively, as well as the manufacture of around 40% of PV inverters sold in the U.S. in 2025. As a result, these technologies may be more vulnerable to the set of rules that might be promulgated in response to this EO.  

A narrow implementation approach that addresses specific risks within specific hardware and software (and a pathway to clearing those concerns) would reduce uncertainty and balance security concerns with project development realities. However, a broad implementation approach that significantly impacts selected technologies would likely cause project development delay and cancellations, with subsequent negative consequences for grid reliability and affordability -- and diversion of investment away from the U.S. The impact on these technologies is key to monitor given the recent series of actions by federal agencies that have also disrupted wind and solar project development. 

Additional Policy Actions are Needed to Support Robust Domestic Manufacturing for Key Grid Components

Import restrictions and equipment prohibitions are only a piece of the puzzle if a robust domestic manufacturing industry for critical grid components is desired. More directed federal assistance and support for domestic manufacturing is needed to provide certainty and support for manufacturers to have the confidence to make long-term capital investments in new capacity -- especially if manufacturers are uncertain about the durability of tariffs and other actions carried out through other Executive Orders rather than more durable legislative actions. 

Sustained commitment beyond import restrictions are necessary for a number of reasons. U.S. producers are often disadvantaged over their foreign competitors due to high labor costs worsened by a workforce shortage. Tariffs on key inputs, including copper, steel, and aluminum, have risen at far steeper rates than the tariff on finished grid component goods, undermining the business case for increasing domestic manufacturing, despite a historic surge of demand from the AI sector. In addition, tariffs on specialty capital equipment imports have also raised costs for domestic manufacturing, which means that some specialty machinery used to produce domestic grid components is unavailable from domestic sources. 

Finally, even though there is some expansion in manufacturing capacity from domestic manufacturers, it takes years to be realized; investors want to be certain that existing policy support is durable. For example, domestic transformer manufacturer Delta Star announced expansion plans, but this additional manufacturing capacity will be added in phases over four years. 

DOE and the USG more broadly has a handful of other existing tools that could be used to more directly support domestic manufacturing including:

• Defense Production Act (DPA) funds provided by the OBBBA could be used to support domestic manufacturers, given there already exists a Presidential Determination granting DOE the authority to use it for critical grid components. However, a significant amount of the $1 billion in appropriations provided in the DPA account has already been obligated to coal projects, limiting the amount remaining for grid components. 

• The FY26 budget transferred $375 million of existing IIJA appropriations to DOE’s Office of Electricity (OE) to support domestic manufacturing of transformers and other critical grid components. OE recently launched the Grid SCALED solicitation for $273 million for projects that can refurbish and reuse transformers and other grid components and projects that can use alternative materials and subcomponents made domestically. 

• Title 17 Innovative Supply Chain loan authority under the Office of Energy Dominance Financing can be used for projects that use new or significantly improved technologies in the manufacturing of eligible grid components. 

• Expanding loan authorities across agencies could be used including at the Small Business Administration (SBA), DOW’s Office of Strategic Capital (OSC), Export-Import Bank of the United States (EXIM), and U.S. International Development Finance Corporation (DFC) – but to date these loan authorities haven’t focused on grid components. The White House could bring agencies together to map out interagency financing options for grid components–and perhaps introduce new programs or public-private partnerships to specifically incentivize domestic grid component supply chains.

In addition to domestic manufacturing, international cooperation with trusted foreign countries could provide a near-term solution. Such a collaboration could be modelled after the Icebreaker deal with Finland, which will train American shipyards and eventually bring ship manufacturing back to the U.S., or the Critical Minerals Ministerial, which unites mission-aligned countries against the threat of Chinese mineral dominance.

Finally, workforce investments are also needed to ensure skilled and trained workers are available to support scaling domestic manufacturing. DOE has successfully implemented programs like this in the past. For example, the National Energy Technology Laboratory Battery Workforce Initiative assessed specific battery workforce positions and skills common across the industry, developed core training programs, and created U.S. Department of Labor registered apprenticeship programs for battery manufacturing workers, which unlocks Federal workforce funding for firms that create new registered apprenticeship programs. DOE has recently recognized this need for other sectors, with the announcement of an intent to fund a $100 million program focused on workforce development for the critical minerals industry.

Power System Security is Critical 

The bulk power system underpins the rest of the economy and it is critical to protect it from risks posed by foreign supply chain threats. However, 120 days is an extremely short period of time for DOE to develop implementing rules with the possibility to impact nearly every grid component, both new and existing. Decreasing the risk posed by foreign-sourced grid equipment will take sustained effort over years, including fully staffing DOE with dedicated power system and supply chain experts. The details of the final rule will determine whether it is a positive step to address the most critical supply chain risks to the power system or whether it has a chilling effect on grid expansion.

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This piece was drafted by trusted and vetted alumni of the U.S. Department of Energy. Any views and opinions expressed are that of the author(s) and do not reflect those of the DOE Alumni Network.