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US Power Equipment Restrictions Could Benefit Domestic Manufacturers, UBS Says

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US President Donald Trump signed an executive order on Wednesday targeting imported bulk power equipment, a move that could favor US manufacturers as customers seek greater supply certainty, UBS said in a note on Wednesday.

The order covers generation equipment, high-voltage transmission equipment, larger transformers, utility-scale inverters and large substations, while excluding local distribution equipment, UBS said.

UBS said the order directs the Secretary of Energy to define covered equipment and set an implementation schedule within 120 days, leaving key details unresolved.

The measure supports a broader US effort to reduce dependence on imported electrical equipment, driven mainly by national security concerns.

UBS expects investors to focus initially on the order's legal details, but said the policies could encourage customers to choose US-made equipment to reduce project risks.

UBS cited earlier measures, including 2018 tariffs on electrical equipment and a 2020 Trump executive order restricting bulk-power systems that the Biden administration paused in 2021.

The 2022 Inflation Reduction Act introduced Section 45X tax credits for domestic production of solar equipment, batteries, inverters and trackers, plus a 10% domestic-content tax credit.

The Biden administration raised tariffs on electric vehicles, chips, solar equipment, and batteries in 2024, while a 2025 law maintained tax incentives for US manufacturing and added limits on certain foreign suppliers.

The Trump administration added Section 232 tariffs in 2026 that set minimum import prices for polysilicon solar modules and components, while the Federal Communications Commission banned imports of new inverter models.

UBS said its favored stocks share strong US manufacturing footprints that can provide customers with greater price certainty and equipment availability as protectionist policies expand.

The bank highlighted Nextpower (NXT) for its US electrical equipment business spanning trackers, foundations, inverters and batteries, plus expansion into battery energy storage systems and artificial intelligence data center power infrastructure.

UBS also highlighted First Solar's (FSLR) US solar-module manufacturing position and raised its price target to $330, while SolarEdge (SEDG) could gain commercial and industrial market share through US manufacturing and potentially enter the utility-scale inverter market.

Price: $89.64, Change: $+2.41, Percent Change: +2.76%

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