A former Tesla executive is betting more than a hundred million dollars that America’s grid hardware gap is a manufacturing opportunity. On August 18, 2026, Heron Power — founded by Drew Baglino, Tesla’s former head of powertrain and energy engineering — announced it will build its first US power-electronics factory in Morgan Hill, California, converting a 286,000-square-foot former warehouse into a plant with more than $100 million in investment and a nominal annual capacity of 40 GW. The site will produce 10,000 units a year of a 5 MW medium-voltage power conversion system (PCS) called Heron Link, aimed squarely at large-scale energy storage and data-center projects, with production targeted for the end of 2027. Heron Link integrates a bidirectional inverter with a solid-state transformer (SST), and its launch lands at a moment when the US Federal Communications Commission has moved to treat foreign-made inverters as a national-security risk. For anyone weighing the best solar inverter brands 2026 question — at any scale — this is a story about who builds the power electronics that carry the clean-energy grid.
Overview of the Technology / News
A power conversion system is the muscle-and-brains of any battery plant: it converts direct current (DC) from the cells into the alternating current (AC) the grid runs on, and it does so in both directions, allowing the battery to charge and discharge. The medium-voltage tier Heron Power is targeting — around 5 MW per unit — sits above the residential inverter class and is the hardware that connects containerised grid-scale batteries directly to distribution or transmission lines.
The novelty is in what Heron Link pairs together. A conventional inverter sits behind a conventional iron-and-copper transformer to step voltage up to grid level. Heron Link folds that transformation into a solid-state transformer — a power-electronics device that performs the same voltage conversion using high-frequency switching instead of heavy magnetics, delivering a smaller, lighter and more controllable unit. The 40 GW figure is nominal nameplate capacity, an ambitious ramp for a startup whose first factory has not yet shipped a unit.
Why This Development Matters
It matters because the US is simultaneously electrifying everything and discovering it cannot build the grid hardware to keep up. Transformers — the most mundane and essential grid component — have been in chronic short supply for years, with lead times stretching past three years for some large units. Inverters and PCS face the same squeeze, and the FCC’s designation of certain foreign-made inverters as a national-security threat adds a strategic overlay to a supply problem that was already economic. Heron Power is a direct, well-capitalised answer to that gap.
The founder matters too. Drew Baglino spent nearly two decades at Tesla scaling its energy business — Powerwall, Powerpack, Megapack and the associated power electronics — from prototype to mass production. That is precisely the manufacturing-execution track record the US grid-hardware sector has been missing, and it is why a 40 GW ambition, audacious on its face, is being taken seriously by an industry that watched him do it before.
Technical Deep Dive
The solid-state transformer is the technical centrepiece, and it is worth understanding what it actually changes. A conventional transformer steps voltage through electromagnetic induction at line frequency — 50 or 60 Hz — which is why it is heavy with iron and copper and physically large. A solid-state transformer converts the incoming power to a high-frequency AC or DC first, steps it through a much smaller high-frequency transformer, and converts back. The result is a fraction of the weight and volume, plus something a passive transformer cannot offer: active, real-time control of voltage, current and power factor. That controllability is exactly what a modern grid, flooded with inverter-based resources, increasingly needs.
The bidirectional inverter half of Heron Link is what makes it a storage and data-centre device. Grid-scale batteries and AI data centres both want clean, fast, controllable power conversion, and both increasingly need to move power in two directions — charging and discharging a battery, or importing grid power and, in future, exporting surplus. The solar inverter efficiency comparison dimension matters here because efficiency losses in a 5 MW unit compound into real dollars: a percentage point of conversion loss on a gigawatt of capacity is megawatts of heat that must be shed and paid for.
There is a residential echo in all of this. The same principles that make a grid-scale PCS reliable — clean switching, low losses, and safety features like grid-tied inverter anti-islanding protection that disconnect a unit instantly when the grid drops — are the exact qualities that define the best solar inverter brands 2026 tier at the home scale. A household inverter is a miniature of Heron Link, and the manufacturing muscle being built at Morgan Hill ultimately feeds the same learning curve that keeps home power electronics improving.
Real-world Applications
The immediate application is large-scale battery storage. A 5 MW medium-voltage PCS is the building block that lets a 100 MW or 1 GW BESS connect to the grid cleanly, and the solid-state transformer shaves the civil-engineering and real-estate costs that conventional substation hardware imposes. For the data-centre market, Heron Link’s controllability and compact footprint address the precise pain points of a hyperscale buildout that is scrambling for power-electronics supply.
The broader application is supply-chain resilience. Every Heron Link that ships replaces a foreign-sourced inverter and transformer on US soil, reducing the strategic exposure the FCC flagged. For the residential and commercial segments, the same domestic manufacturing capacity — once it matures — supports a more robust, lower-cost supply of the best solar inverter brands 2026 hardware that every distributed installation depends on.
Industry Impact / Market Implications
For the power-electronics industry, Heron Power is a shot across the bow of the established inverter incumbents. A well-funded domestic entrant targeting the medium-voltage tier with a differentiated solid-state architecture could reset pricing and accelerate the industry’s migration toward smarter, more controllable power conversion. Expect incumbent suppliers to respond with their own domestic expansion and solid-state roadmaps.
For the wider energy transition, the factory is a test of whether American grid-hardware manufacturing can be rebuilt fast enough to match the buildout. Transformers and inverters are the chokepoint the whole clean-energy pipeline flows through, and a successful Morgan Hill ramp would prove that the gap is closable — with knock-on benefits for every segment, including the best solar inverter brands 2026 market that runs on the same core components.
Future Outlook
The near-term watch-item is execution: hiring the workforce, retooling a warehouse into a high-precision electronics line, and hitting the end-of-2027 production target. The first orders and any marquee storage or data-centre customers will be the strongest signal that the technology can compete on cost, not just capability.
Over the next two to five years, expect solid-state transformers to move from a novelty to a standard option in grid-scale power conversion, and expect domestic manufacturing to take a durable share of the US inverter and transformer market. The strategic lesson for the whole market is that power electronics is the quiet bottleneck of the energy transition — and the firms that solve it, from Morgan Hill down to the best solar inverter brands 2026 rack, will define how fast the clean grid actually gets built.
