Solving the Gridlock: America’s Electric Supply Chain Opportunity

This policy brief by RMI examines the critical shortages in the United States' electric grid supply chain, noting that demand for hardware has surged since 2019 due to load growth and grid modernization. The document details the risks of high import reliance and proposes a three-pronged federal strategy—easing near-term bottlenecks, expanding domestic production, and promoting innovation—to secure the supply chain, reduce costs, and foster economic growth.

• The US electric grid supply chain is facing severe constraints, with demand for hardware increasing since 2019 due to load growth, new energy generation, and the need to modernize aging infrastructure. This has led to significant price increases—such as power transformer prices rising by approximately 75% and cable costs doubling—and extreme lead times, with large power transformers potentially taking up to four years to deliver.
• The United States is heavily dependent on imports for grid equipment, leaving it vulnerable to disruptions. As of 2025, domestic production covered only 20% of the demand for large power transformers (LPTs) and roughly 50% for distribution transformers. Primary import sources include Europe, Southeast Asia, and Mexico, with some exposure to China.
• Domestic manufacturing faces several structural barriers that hinder its ability to close supply gaps by 2030. These include a lack of domestic refining capacity for copper and limited suppliers for electrical steel (only two for GOES and NOES, and one for amorphous metal), technical labor shortages, and a high degree of design customization by utilities—with over 80,000 transformer types—which prevents economies of scale.
• Recent private sector investments, such as a $1 billion investment by Hitachi Energy in Virginia and Siemens Energy's target for new capacity by 2027, are noted as encouraging but insufficient to resolve the projected 2030 supply chain gaps.
• The document proposes federal policy interventions to address the crisis, including the use of the Defense Production Act (DPA) and a $375 million allocation to the DOE's Office of Electricity in January 2026. Recommended strategies include expanding manufacturing tax credits (such as 45X and 48C), providing low-cost scaling capital via the Energy Dominance Financing Program, and creating a virtual strategic transformer reserve to act as a purchaser of last resort.
• Subnational economic development is highlighted as a key opportunity, with an analysis suggesting that if California met 30% of its grid equipment demand through in-state production, it could create up to 12,000 full-time jobs. The document notes that states in the Southeast, including Virginia, Tennessee, South Carolina, and North Carolina, have successfully attracted investment through tailored workforce training.

APA

RMI (2026). Solving the Gridlock: America’s Electric Supply Chain Opportunity. https://rmi.org/resources/solving-the-gridlock-americas-electric-supply-chain-opportunity/

Chicago

RMI. Solving the Gridlock: America’s Electric Supply Chain Opportunity. 2026. https://rmi.org/resources/solving-the-gridlock-americas-electric-supply-chain-opportunity/.

Wikipedia

{{cite report |author=RMI |title=Solving the Gridlock: America’s Electric Supply Chain Opportunity |date=8 May 2026 |url=https://rmi.org/resources/solving-the-gridlock-americas-electric-supply-chain-opportunity/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2026solving, author = {{RMI}}, title = {{Solving the Gridlock: America’s Electric Supply Chain Opportunity}}, institution = {RMI}, year = {2026}, month = may, url = {https://rmi.org/resources/solving-the-gridlock-americas-electric-supply-chain-opportunity/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }