Why Credit Access Makes or Breaks Clean Tech Adoption and What Policy Makers Can Do About It

Building Blocks to Make Solutions Stick

For clean energy to reach everyone, government can’t just regulate behavior. It has to actively shape credit markets in partnership with the private sector.

Implications for democratic governance

Capacity needs

Access to affordable credit is a necessary condition for an equitable energy transition and an inclusive economy. Markets naturally concentrate capital where risk is low and returns are predictable, leaving low-income communities, rural areas, and smaller projects behind. Well-designed federal policy can change that dynamic by shaping markets—reducing risk, creating incentives, and unlocking private capital so clean technologies reach everyone, everywhere. This paper explores how policy-enabled finance must be part of the toolkit if we are going to drive widespread adoption of clean technologies, and can be summarized as follows: 

The critical role of policy-enabled finance to drive widespread economic opportunity  

Access to affordable credit is not just a financial tool—it is a cornerstone of economic opportunity. It enables families to buy homes, entrepreneurs to launch businesses, and communities to invest in technologies that reduce costs and improve quality of life. Yet, across the United States, access to credit remains deeply uneven. Nearly one in five Americans and entire regions – particularly rural and Tribal communities – are excluded from the financial mainstream, limiting their ability to thrive.

Private-sector financial institutions—banks, private equity firms, and other lenders—are designed to maximize profit. They concentrate on markets where risk is predictable, transaction costs are low, and deals are easy to close. This business model leaves behind borrowers and communities that fall outside these parameters. Without intervention, capital flows toward the familiar and away from the places that need it most.

Public policy can change this dynamic. By creating incentives or mitigating risk, policy can make lending to or investing in underserved markets viable and attractive. These interventions are not distortions — they are strategic investments that unlock economic potential where the market alone cannot, generating economic value and vitality for the direct recipients while yielding positive externalities and public benefit for local communities. And, importantly, these policy interventions act as a critical complement to regulation. Increasing access to credit is often the carrot that can be paired with, or precede, a regulatory stick so that people are not only led to a particular economic intervention, but they are also incentivized and enabled.  

For decades, policy-enabled finance has delivered measurable impact through multiple programs and agencies designed to support local financial institutions – regulated and unregulated, depository and non-depository – that are built to drive economic mobility and local growth. These policies and programs have taken multiple forms, but can generally be put in three categories: 

These tools enjoy broad recognition and bipartisan support because they work. They increase access, availability, and affordability of credit—fueling job creation, housing stability, and economic resilience. Policy-enabled finance is not charity; it is a proven strategy for broad and inclusive economic growth and a key tool for the policy-maker toolkit to support capital investment, project development, and adoption of beneficial technologies in a market-driven context that can increase the effectiveness of a regulatory agenda. 

Most importantly, policy-enabled finance has led to major improvements in wealth-building and quality of life for millions of Americans. The 30-year mortgage was created by the Federal Housing Administration in the 1930s as a response to the Great Depression. Before this intervention, only the very wealthy could afford to buy a home given the high downpayment requirements and short-term loans. Since this policy change, thousands of financial institutions have offered long-term mortgages to millions of Americans who have bought homes that provide safety and security for their families, strong communities, and an opportunity to build wealth through appreciating assets. Broad home ownership is a public good, but until the government created the right policy and regulatory framework for the markets, it was out of reach for the majority of Americans. 

Similarly, the Small Business Administration’s loan guarantee programs started in the 1950s supported financial institutions, including banks and non-bank lenders, in extending credit to small businesses that would otherwise be difficult to serve with affordable credit. These programs have collectively helped millions of small businesses access the credit they need to grow their businesses, create wealth for themselves and their families, provide critical goods and services in their communities, and create a diverse and vibrant local tax base. 

The financial markets, without these types of interventions, are not structured to prioritize access and affordability. Well-designed policy and complementary regulatory interventions have been proven to drive different behaviors in the capital markets that yield real benefits for American families and businesses.  

The role of access to credit in driving an equitable energy transition 

The public and private sectors have spent decades and billions of dollars investing in the development of clean technologies that reduce greenhouse gas emissions, create economic benefits, and deliver a better customer experience. Now that these technologies exist, the challenge is to deploy them for everyone, everywhere. 

The barrier to widespread deployment is that most clean technologies require an upfront investment to yield long-term benefits and savings (i.e., an initial capital expense to reduce ongoing operational expenses) – technologies like solar and battery storage, electric vehicles, electric HVAC and appliances, etc. – which means that people and companies with cash or access to credit are adopting these better technologies while those without access to cash or credit are being left behind. This is yielding an even greater divide – creating economic savings, health benefits, and better technologies for those who can afford them, while leaving dirty, volatile, and increasingly expensive energy sources for the lowest-income communities. 

Many of the federal policy interventions to support deployment of these new technologies to date have been through tax credits. These policies have been very popular, but are not often widely adopted, particularly in rural and lower-income communities, because, (a) they are complex, (b) they often require working with individuals or businesses with large tax liabilities, and (c) they typically come with high transaction costs, making smaller, more distributed projects harder to make work. The energy transition is a huge wave of change, but it is made up of many small component parts – individual buildings, machines, vehicles, grids – so if our policies fail to enable small projects to get done, we will fail to transition quickly and equitably.

To deploy everywhere, households and businesses need credit to offset capital expenses. To expand access to credit, we need supportive clean energy policies that work within and alongside local financial services ecosystems – just like we’ve seen with housing and small businesses. 

Regulation is insufficient to drive widespread adoption 

Pursuing a carbon-free economy is a massive undertaking and, understandably, much of the state and federal government’s toolkit has focused on regulation of people and businesses to drive behavior change – policies like fuel economy standards, pollution restrictions, renewable energy standards, and electrification mandates. This is an important piece of the puzzle – but insufficient to drive broad (and willing) adoption. 

Take, for example, the goal of electrifying heavy-duty trucks in and around port communities. States like California have attempted to set a date at which all new trucks on the registry must be zero-emissions vehicles. Predictably, this mandate was met with a lot of pushback from truck drivers, small operators, and industry associations who struggled to see a path to complying with this regulation without a major increase in cost. 

It wasn’t until the regulation was paired with direct incentives for truck purchases and an attractive and feasible financing package for vehicle acquisition and charging infrastructure that the industry actors started to come around. This has helped change behavior of both buyers and incumbent sellers in the market. 

Policy-enabled finance creates tools – often used in conjunction with other policy mechanisms – that can more effectively meet people where they are with affordable, appropriate, and tailored solutions and can help demonstrate a feasible path to adoption that can help buyers and sellers in these markets adapt accordingly. 

The Greenhouse Gas Reduction Fund as an innovative policy-enabled finance program 

The Greenhouse Gas Reduction Fund (GGRF) is more than an emissions initiative—it is a strategic investment in economic equity and market innovation that took lessons in program design from many sectors and programs of the past. Designed with three core objectives, the program aims to:

GGRF programs, including the National Clean Investment Fund, the Clean Communities Investment Accelerator, and Solar for All, were built to complement other Inflation Reduction Act (IRA) programs by occupying a critical middle ground between grant programs and tax credits. Grant programs provide direct, one-time support for projects and programs that are not financeable (i.e., not generating revenue). Tax credits are put into the market to incentivize private investment for anyone interested in taking advantage but are not typically targeted to any specific project or population. 

GGRF bridges these approaches. It channels capital into markets where funding does not naturally flow in the form of loans and investments, ensuring that clean energy and climate solutions reach every community—but does so in a way that often extends the benefits of the tax credits and incentive programs so that they reach a broader set of projects and communities where the incentive is insufficient to drive adoption. GGRF focuses on increasing access to credit and investment in places that traditional finance overlooks by reducing risk and creating scalable financing structures, empowering local lenders, community organizations, and national financing hubs to deploy resources where they are needed most. Also, because the program makes loans and investments, it recycles capital continuously – akin to a revolving loan fund – so that the work filling gaps in market adoption can continue for decades. 

GGRF’s design was built on a strong foundation of successful direct investment programs for local lenders, such as CDFI Fund awards and USDA programs. What makes it unique is its scale—tens of billions of dollars—and its centralized approach, leveraging national financing hubs to drive systemic change with and through new and existing local financial capillaries (i.e., credit unions, community banks, green banks, and loan funds). This program was not built to drive incremental progress; it is a market-shaping intervention designed to accelerate the clean energy transition while promoting widespread economic growth.

Unfortunately, the program was stopped in its tracks when the Trump administration illegally froze funds already disbursed to awardees, leading to multiple lawsuits to restore funding. Without this disruption, awardees and their partners across the country would be driving direct economic benefits for families and communities across all 50 states. In the first six months of the program, awardees had pipelines of projects and investments that were projected to create over 49,000 jobs, drive $866 million in local economic benefits, save families and businesses $2.7 billion in energy costs, and leverage nearly $17 billion in private capital. The intention and mechanics of the program were working – and working fast – to deliver direct economic, health and environmental benefits for millions of Americans.  

Moving at the speed of trust: Bringing the public and private sectors together for effective implementation 

For a program like the Greenhouse Gas Reduction Fund to succeed, both the private and public sectors need clarity, confidence and accountability. But most importantly, they need a baseline of trust between the parties to support ongoing creative problem solving to implement a new, scaled program with exciting promise and a limited blueprint. 

For the private sector, certainty is paramount. Investors and lenders (and importantly, their lawyers) require clear definitions, consistent requirements, and transparency about the availability of funds, requirements of use, and the ability to forward commit capital to projects and businesses. They need mechanisms to leverage public dollars with private capital and assurances that counterparties will be shielded from political, compliance, and policy risk. Flexibility is equally critical, allowing actors to adapt to rapid market shifts and technological innovations without being constrained by rigid program structures. Understanding these requirements – and the needs of the financial market actors involved – is outside the comfort zone of most government agencies and employees and requires significant experience and capacity building to strengthen this muscle. Nimble thinking is not often associated with government agencies, but in policy-driven financial services, it is paramount. 

At the same time, the public sector has its own requirements which require patience and understanding from the private sector. Policymakers and the EPA, the implementing agency of the GGRF, must ensure that funds are used properly and that Congressional and public oversight is robust. This means designing programs that comply with all laws and regulations while advancing policy priorities. It requires mechanisms for accountability—certifications, reporting, and transparency in how funds flow – along with safeguards against undue influence from purely profit-motivated private actors. Balancing these needs is not optional when managing taxpayer funds; it is the foundation for building trust and ensuring that the program delivers on its promise of reducing emissions, benefiting communities, and transforming markets. 

Implementation requires striking the balance between the needs of the private and public actors; this was difficult and time consuming for both the federal employees and for us as private recipients. There was pressure to deploy quickly to demonstrate impact and the value of the program, but it took a long time to get contracts signed and funds in the market because of the many requirements of the public and private parties involved. We speak different languages, are solving for different constraints, and work in drastically different environments – all which led to complexity and delays. 

Internal EPA requirements and federal crosscutters (i.e., federal requirements from other related laws that applied to this program) increased time to market and transaction costs. Many of these requirements came with high-level policy objectives without the ability to get to a level of detail required for capital deployment. 

For example, two of the major policy crosscutters were the Davis Bacon and Related Acts (DBRA) requirements around labor and workforce, and the Build America Buy America (BABA) requirements for equipment manufacturing and component parts. While the agency and private awardees were aligned at a high level on policy intention – good-paying jobs and domestically-manufactured goods – down streaming these requirements to borrowers and projects required significantly more detail and nuance than was available to the agency, adding weeks and months onto implementation and frustration among private counterparties. 

Clear expectations up front on how to manage the trade-offs – policy priorities versus capital deployment – could have helped create a high-level framework for implementation, which was a one-by-one review of use cases to determine feasibility and applicability. This added complexity and friction to the process without driving outsized results. 

More requirements and complexity led to slower, more costly deployment, which meant fewer communities would benefit from the program’s goals of cutting emissions, creating jobs, and cutting household and business costs. 

Another key feature of the program for the National Clean Investment Fund and Clean Communities Investment Accelerator was the ability for the federal government to leverage a Financial Agent to administer the funds. This arrangement was developed between the EPA and Treasury, leveraging a long-standing practice of the Treasury Department of contracting with external banks to provide financial services that were hard for the government to provide directly. This was particularly important for the National Clean Investment Fund program because the disbursement of funds into awardee accounts enabled the awardees to meet a core statutory requirement to leverage funds with private capital. Without this function, the cash would not be available on the balance sheet of the awardees and would be difficult to leverage with private investment. 

Lastly, the reporting requirements for the program were complex, making it hard to provide clarity on what data collection was required for early transactions. Again, both parties recognized the importance of transparent data collection and dissemination but implementing that intent in practice was time consuming. A simple, standardized framework to get started that could evolve over time would have helped reduce uncertainty and supported faster deployment. 

Altogether, the cross-sector translation – finding common ground between two disparate worlds – added many months onto the process of getting the program to the market which, in the current political climate, was time not spent doing the important work to educate a broad set of stakeholders on the program’s promise, potential, and purpose. A lot of this complexity could have been reduced by developing a baseline of trust between the parties through the application and award process, complemented by a common goal to improve program implementation over time. 

Strange bedfellows create weak alliances 

In addition to the programmatic elements of translation, the actors involved in implementing direct investment strategies tend to be unknown entities to government agencies and Congress. Even though many of the implementing organizations – the “awardees” – have been around for decades doing similar work, there were weak ties with Congress, federal agencies, and other related stakeholders. Similarly, there was a lack of understanding of the role that nonprofit and community-based financial organizations play in addressing market gaps. This mutual lack of understanding and engagement leaves room for misunderstanding, distrust or generalizations that can hinder the ability to make collective progress. 

Within the agency, this was a new program type for the EPA, so requirements and design process took many months before anything was shared publicly. The Notice of Funding Opportunity was released nearly a year after the legislation was signed. 

The unique form and function of the program and limited direct engagement with lawmakers and other stakeholders about the program left a vacuum of information, which led to skepticism and confusion. Because the funds were provided to awardees as grants, many interpreted this as just another grant program – a large federal spending package that would lead to “handouts” – instead of what it was, the federal government seeding a sustainable fund with “equity” that would be lent out, returned, and reinvested in perpetuity. For example, here is the Wall Street Journal editorial page,and later, the EPA press release conflating investments with “handouts”: 

“Imagine if Republicans gave the Trump Administration tens of billions of dollars to dole out to right-wing groups to sprinkle around to favored businesses. That’s what Democrats did in the Inflation Reduction Act (IRA). The Trump team’s effort to break up this spending racket has led to a court brawl, which could be educational.”

The fact that this policy structure and the private sector entities charged with implementing it were relative strangers led to confusion and delay during a period that could have been spent on outreach, engagement, and education. Without that broad base of support, the program unnecessarily became a political punching bag.

To mitigate this risk going forward, there needs to be greater investment in relationship building, education, stakeholder engagement and capacity building within and among the implementing partners across all relevant government actors and their private sector counterparts, especially after award selections are made. This connective tissue would go a long way in creating a baseline of common understanding of the policy objectives, program design, and implementation partners involved so all parties are aligned on strategic intent and path forward. 

Making policy-enabled finance programs work in the future 

If we agree that policy-enabled finance is essential to drive the energy transition and deliver broad benefits, the next step is asking the right questions about how to design these interventions for success, drawing lessons from the GGRF and other related programs.

First, what mechanisms should we use, and what are the trade-offs for each? Federally supported direct investment programs, such as managed funds, can deploy capital quickly and target underserved markets, but they require strong governance, thoughtful program design, and radical transparency, otherwise they are susceptible to the “slush fund” narrative or similar risks (i.e. conflicts of interest and political favors). 

Tax credits and incentives have proven effective in attracting private investment, yet they often favor actors with existing tax liability and can leave smaller players behind. Guarantees reduce risk for lenders and unlock private capital, but they demand careful structuring to avoid moral hazard and can struggle to reach communities that are truly under-resourced. 

Despite the many pitfalls of direct investment programs, they address a challenge that has plagued many of the more distributed policies: centralization and market making. Often in an attempt to let a thousand flowers bloom, policymakers underestimate the need for centralized or regional infrastructure to help with asset aggregation, data collection, product standardization, and scaled capital access. This yields local infrastructure that is sub-scale, inefficient, and unable to access the capital markets for private leverage – too small to truly shape markets.

While the GGRF’s future is uncertain given pending litigation, its purpose and role as a set of centralized financial institutions within the broader community-based financial ecosystem is critical – and needs to be more broadly understood as policymakers set future priorities. 

Second, should government manage funds and programs internally or partner with external experts? Internal management within an agency offers control and accountability but can strain agency capacity and impede the ability to be an active market participant. It is also difficult to attract the right talent within the government’s pay scale, leading to an inability to recruit and high turnover. This model has been attempted through programs like the Department of Energy’s Loan Programs Office (LPO), but even that market-based program has been slower to execute, delaying critical infrastructure and technology investments by months, if not years.   

On the other hand, external management brings specialized expertise and market agility, yet it raises questions about oversight and influence. No matter who the private party is, there is skepticism around the use of funds, their personal or professional gain, and their intentions with taxpayer money. In our deeply politicized world, this puts a target on the leaders of these organizations that may limit who is willing to play this role. 

Quasi-public Structures

Despite the challenges, on balance it seems that internal agency management or a quasi-public structure is the most feasible path. Internal management pushes the boundaries of public agency function but goes a long way to build trust and accountability. Quasi-public structures seem to be a good compromise when feasible. Other countries have figured out how to manage these programs within a government or quasi-government agency (see the Clean Energy Finance Corporation and Reconstruction Finance Corporation, both in Australia). We can too. 

At the federal level, credit programs should be managed by agencies with the skills and capacities to hold an investment function, like the Department of Energy or the Treasury Department, and leverage lessons learned from programs like DOE’s LPO and EPA’s GGRF to structure new entities. Or – like many of the state and local green banks have done – create quasi-public entities that have public sector governance and appropriations but otherwise operate independently as financial institutions with their own balance sheets, bonding authority, and staffing structure. 

Lastly, if public-private partnerships are preferred, who should the government work with to implement policies meant to expand access to capital and credit? Nonprofit financial institutions often prioritize mission, community impact and are willing to arrange complex financings that require a higher touch approach but often lack scale and institutional capital access. For-profit firms bring scale and expertise but often find it hard to manage a government program with a mindset or culture that differs from their typical profit-maximization frameworks. 

Depository institutions such as banks offer stability and regulatory oversight, whereas non-depositories can innovate more freely to reach the hardest to serve communities. Regulated entities provide robust and trusted infrastructure and controls, but unregulated actors may move faster and can be more creative in supporting traditionally under-resourced opportunities. Specialty firms bring deep sector or asset-class knowledge, while generalists offer broad reach and experience in managing across asset classes. 

To identify the optimal path, it is helpful to look to existing programs for lessons. The U.S. Treasury’s Emergency Capital Investment Program (ECIP) demonstrates how direct investment into regulated depository institutions can mobilize significant capital for underserved communities through an existing financial ecosystem. The Loan Programs Office shows what internal management can achieve for large-scale projects. Tax credit programs like the New Markets Tax Credit (NMTC) and Investment Tax Credit (ITC)/Production Tax Credit (PTC) illustrate how incentives can transform markets, while guarantee programs such as the U.S. Department of the Treasury’s Community Development Financial Institutions Fund (CDFI) Fund Bond Guarantee and SBA 7(a) and 504 guarantees highlight the power of risk mitigation in activating and standardizing products to support secondary market access. These precedents offer valuable insights as we design future policies to accelerate a broadly beneficial energy transition.

Educating policymakers to build trust in the community finance ecosystem

Regardless of path forward, one thing remains critical – building better relationships between policymakers and the community finance industry, including community banks, credit unions, loan funds, and green banks. These are the boots-on-the-ground organizations that share a mission with many policymakers to expand economic opportunity and broaden access to capital and credit. And they are often the organizations navigating multiple public products and programs to bring affordable, quality financial services to communities. 

The challenge is that most advocacy and educational work for these organizations has been siloed – there are groups representing credit unions big and small, those representing housing lenders, loan funds, green banks, and community banks. The disaggregation of these efforts has diluted the potential for policymakers to look at this ecosystem as a whole to determine how best to leverage it for public good. This is not to say that each of these individual groups does not have a role to play for their members – they all have different needs and requirements and deserve representation. But the broader industry would benefit from collaboration across these organizations to create a mechanism for these institutions to help with outreach, advocacy and education around policy-enabled finance overall. This would bring a strong and powerful group of actors together for a higher collective purpose and, ideally, create a large and diverse constituency with common goals. 

State and local governments stepping up  

In the near-term, the absence of federal support for clean technology deployment through policy-enabled finance creates an enormous opportunity for state and local governments to step up and push forward. Hundreds of local financial institutions were doing work to prepare for the delivery of GGRF funds to and through local projects and businesses to drive broader adoption of clean technologies. These organizations continue to have the skillsets, capacity, and pipeline to finance these projects – but need access to flexible and affordable capital to do so. 

State funding efforts could mirror the program and product design of the GGRF to get deals done locally, working with one or more of the constellation of financial institutions preparing to deploy federal funds. Just because the GGRF’s programs were cut short, it doesn’t mean that the infrastructure and learnings generated should go to waste – if there are public institutions willing to commit capital, there should be many financial institutions across the country ready to put it to good use. 

Conclusion 

If our shared goal is an equitable, rapid energy transition, policy must do more than regulate — it must enable finance and focus on deployment, or getting great projects done. The Greenhouse Gas Reduction Fund showed both the promise and the pitfalls of large-scale, policy-enabled finance: when designed and governed well, these tools can unlock private capital, deliver measurable local benefits, and sustain long-term market transformation. When implementation gaps and weak relationships persist, even well-intentioned programs become politically vulnerable and ripe for attack. To make these programs successful within our current political context, future efforts should prioritize clear governance, cross-sector capacity, and sustained stakeholder engagement so public dollars can catalyze private investment that reaches every community. 

Policy-enabled finance snapshot (illustrative, not exhaustive)

ProgramDirectTax IncentiveGuaranteeFederal agencyImplementing entit(ies)
CDFI Fund Financial Assistance ProgramXTreasuryCertified nonprofit loan funds
Emergency Capital Investment ProgramXTreasuryCommunity banks and credit unions
Opportunity ZonesXTreasuryPrivate funds and other financial intermediaries
Low-income Housing Tax Credit (LIHTC) ProgramXIRS, State Housing Finance AgenciesPrivate housing developers, lenders and syndicators
New Markets Tax Credit (NMTC) ProgramXTreasuryPrivate Community Development Entities (CDEs)
Investment and Production Tax Credit (ITC/PTC) ProgramXTreasuryPrivate developers, investors, and syndicators
USDA Business and Industry Loan GuaranteeXUSDABanks, credit unions, and farm credit lenders
USDA Single Family Loan GuaranteeXUSDAPrivate mortgage originators
SBA Loan Guarantees (7a, 504, etc.)XSBABank and non-bank private business lenders
DOE Loan Programs Office Guarantee ProgramXDepartment of EnergyDOE direct to companies, alongside private lenders and investors
CDFI Fund Bond Guarantee ProgramXTreasuryCertified Community Development Financial Institutions (CDFIs)
Greenhouse Gas Reduction Fund National Clean Investment Fund and Clean Communities Investment AcceleratorXEPANational nonprofit specialty finance organizations in partnership with local lenders (community banks, credit unions, green banks, and loan funds)

DOE 4.0: Rethinking Program Design for a Clean Energy Future

DOE’s mission and operations have undergone at least three iterations: starting as the Atomic Energy Commission after World War II (1.0), evolving into the Department of Energy during the 1970s Energy Crisis to focus on a wider range of energy research & development (2.0), and then expanding into demonstration and deployment over the last 20 years (3.0). The evolution into DOE 3.0 began with the Energy Policy Act of 2005, which authorized the Loan Programs Office (LPO), and accelerated with the infusion of funding from the American Recovery and Reinvestment Act of 2009. Finally, the Bipartisan Infrastructure Law (BIL) and the Inflation Reduction Act (IRA) crystallized DOE 3.0’s dual mandate to not only drive U.S. leadership in science and technology innovation (as under DOE 1.0 and 2.0), but also directly advance U.S. industrial development and decarbonization through project financing and other support for infrastructure deployment.

While DOE continues to support the full spectrum of research, development, demonstration, and deployment (RDD&D) activities under this dual mandate, the agency is now undergoing another transformation under the Trump administration, as a large number of career staff leave the agency and programs and budgets are overhauled. The Federation of American Scientists (FAS) is launching a new initiative to envision the DOE 4.0 that emerges after these upheavals, with the goals of identifying where DOE 3.0 missed opportunities and how DOE 4.0 can achieve the real-world change needed to address the interlocking crises of energy affordability, U.S. competitiveness, and climate change. 

Crucial to these goals is rethinking program design and implementation to ensure that DOE’s tools are fit for purpose. BIL and IRA introduced new types of programs and assistance mechanisms, such as Regional Hubs and “anchor customer” capacity contracts, to try to meet the differing needs of demonstration and deployment activities compared to R&D. Some were a clear success, while others faced implementation challenges. At the same time, the majority of funding from these two bills was still implemented using traditional grants and cooperative agreements, which did not always align with the needs of the commercial-scale projects they sought to support. Based on lessons learned from the Biden administration, this report provides recommendations to DOE to improve the implementation of different types of assistance and identifies opportunities to expand the use of flexible and novel approaches. To that end, this report also advises Congress on how to improve the design of legislation for more effective implementation.

The ideas and insights in this report were informed by conversations with former DOE staff who played a role in implementing many of these programs and experts from the broader clean energy policy community.

Distribution of BIL and IRA Funding

Before diving into program design, it’s helpful to first understand the range of technologies and activities that BIL and IRA programs were meant to address, especially where that funding was concentrated and where there may have been gaps, since programs should be tailored to the purpose.

Authorizations and Appropriations

Congress intentionally provided the lion’s share of BIL and IRA funding to demonstration and deployment activities. The table above shows the distribution of BIL and IRA authorizations and appropriations for DOE. The table excludes DOE’s revolving loan programs – the Tribal Energy Financing Program (TEFP), the Advanced Technology Vehicles Manufacturing Loan Program (ATVM), the Title XVII Innovative Energy Loan Guarantee Program (Title 1703), the Title XVII Energy Infrastructure Reinvestment Financing Program (Title 1706) – which are discussed in the following section.1 The Carbon Dioxide Transportation infrastructure Finance and Innovation program (CIFIA) was included in the table above because that program’s appropriations could be used for both grants and loan credit subsidies. 

The technology areas that received the most DOE funding from BIL and IRA (excluding loans) were building decarbonization, grid infrastructure, clean power – combining solar, wind, water, geothermal, and nuclear power, energy storage systems, and technology neutral programs – carbon management, and manufacturing and supply chains, which each received over $10 billion in funding. 

Below is a breakdown of the funding distribution for each sector/technology. 

Grid Infrastructure received a total of $14.9 billion, second only to building decarbonization. All of the funding went towards demonstration and deployment programs, the majority ($10.5 billion) of which went towards the Grid Resilience and Innovation Partnerships (GRIP) program. The remainder of the funding went towards Grid Resilience State and Tribal formula grants, the Energy Improvement in Rural and Remote Areas, Transmission Facilitation Program, and transmission siting and planning programs. No funding went to R&D or workforce programs. Grid infrastructure was also eligible for the Title 17 and Tribal loans programs.

Power Generation received a total of $13.2 billion, with funding unevenly distributed across technologies and stages of innovation. Nuclear power received the largest share, with over $9.2 billion allocated to the Advanced Reactor Demonstration Program and the Civil Nuclear Credit Program, supporting demonstration of advanced reactors and production incentives to maintain existing nuclear plants, respectively. Geothermal energy received the least funding among power generation technologies, with only $84 million allocated to the Enhanced Geothermal Systems (EGS) Demonstration Program and no other support for R&D or deployment. 

Modest amounts were provided for RD&D in solar ($80 million), wind ($100 million), and water power technologies ($146 million). For deployment, hydropower also received production and efficiency incentives to support existing facilities ($754 million); wind energy received funding for Interregional and Offshore Wind Electricity Transmission Planning and Development ($100 million); and solar qualified for the Renew America’s Schools program ($500 million). To complement these technologies, $505 was provided for energy storage demonstration programs to enable reliable deployment of variable renewables. 

Power generation was also eligible for the Title 17 and Tribal loan programs.

Manufacturing and Supply Chains received $10.8 billion in funding from BIL and IRA. The majority of that funding, $6.3 billion, went towards battery supply chains, primarily for the Battery Materials Processing Program ($3 billion) and the Battery Manufacturing and Recycling Program ($3 billion). Additional focus areas for funding included EV manufacturing ($2 billion), advanced energy manufacturing and recycling ($750 million), high-assay low-enriched uranium (HALEU) supply chains for nuclear power plants ($700 million), and heat pump manufacturing ($250 million). Energy manufacturing and supply chains are eligible for Title 1703 loans, while EV and battery manufacturing and supply chains are eligible for ATVM loans. 

Critical Minerals received a total of $6.9 billion, of which $6 billion was allocated for the Battery Materials Processing Program and the Battery Manufacturing and Recycling Program, which funded demonstration and commercial-scale critical minerals processing and recycling projects. The remainder of the funding went to R&D programs on mining, processing, and recycling technologies; technologies to recover critical minerals from coal-based industry, mining and mine waste, and other industries; and technologies that use less critical minerals or replace them with alternatives. Critical minerals were also eligible for all of DOE’s revolving loan programs, except for CIFIA.

Industrial Decarbonization and Efficiency received a total of $7.5 billion. Six ($6.0) billion of this funding went towards the Industrial Demonstrations Program (IDP), which was sector and solution agnostic and accepted projects for both new facilities and retrofits, making the money extremely flexible. Much smaller funding amounts were allocated to deployment and workforce programs like rebates for energy efficient technologies and systems, decarbonizing energy manufacturing and recycling facilities, and Industrial Training and Assessment Centers. No funding was allocated to R&D programs. 

Hydrogen and Clean Fuels received $8 billion for the Regional Clean Hydrogen Hubs program to support near-term demonstration and commercialization of hydrogen production, transportation, and usage. Hydrogen and clean fuels were also eligible for all of the loan programs, except for CIFIA. Investment across the full research-to-deployment (RDD&D) continuum was lacking. Dedicated funding for clean fuels besides hydrogen was also missing. 

EVs and Transportation funding from BIL and IRA was largely focused on light-duty personal EVs. By contrast, investments in medium- and heavy-duty vehicles and urban transportation were limited. 

EV manufacturing and supply chains received $8.3 billion in funding. The largest single allocations went to the Battery Materials Processing and Battery Manufacturing & Recycling Programs ($6 billion), strengthening domestic battery supply chains for EVs. Domestic Manufacturing Conversion grants ($5 billion), further supported downstream manufacturing of advanced EV technologies. Additional funding supported R&D for battery recycling and second-life applications. EV and battery manufacturing were also eligible for ATVM loans. 

A notable new focus for DOE under BIL was the deployment of EV charging infrastructure. Charging infrastructure was eligible for $1.05 billion in DOE funding through the Renew America’s Schools program and the Energy Efficiency and Conservation Block Grant Program. DOE played a key role in the Joint Office of Energy and Transportation’s implementation of the National Electric Vehicle Infrastructure (NEVI) Formula Program, funded by DOT ($5 billion), and other charging programs. This marks a shift from DOE’s previous focus on developing vehicle technologies and fuels to a broader focus on all of the technology and infrastructure needs for widespread EV adoption. 

Building Decarbonization and Efficiency received the most non-loan funding from BIL and IRA at $15.2 billion. The largest share of this funding, $12 billion, went towards deployment and affordability programs such as the Home Energy Efficiency Rebate Program, High-Efficiency Electric Home Rebate Program, and the Weatherization Assistance Program – all of which aim to reduce energy costs for low-income households by increasing the energy efficiency of their homes. Additional funding supported workforce training and the improvement of building codes. Little to no funding went to R&D and demonstration programs, signaling the relative maturity of building decarbonization and efficiency technologies compared to other sectors. District heating and cooling facilities are eligible for TEFP loans. 

Carbon Management received a total of $11.6 billion. The majority of the funding went towards demonstration and deployment activities, of which $2.1 billion went towards CIFIA to support the deployment of transportation infrastructure, $2.5 billion went towards carbon storage validation and testing, $3.0 billion went towards carbon capture pilots and demonstrations, and $3.5 billion went towards the development of Regional Direct Air Capture (DAC) Hubs. Carbon management was also eligible for loans from the Title 17 programs. 

Loans

DOE’s loan programs operate differently from the way authorizations and appropriations work for traditional assistance programs, which is why they are not included in the chart above. These programs receive both a certain amount of loan authority, which set limits on the size of their portfolios, and appropriations for program administration and credit subsidies, which allows the office to provide low-cost financing. The IRA appropriated $13.8 billion total for these four programs and provided an additional $310 billion in loan authority for Title 1703, Title 1706, and TFP. CIFIA was established in the IRA without a cap on its loan authority. The IRA also repealed the cap on ATVM’s loan authority, which remains uncapped.2

During the four years of the Biden administration, the Loan Programs Office (LPO), now renamed the Office of Energy Dominance Financing (EDF), issued a total of 24 loans and 28 conditional commitments, worth over $100 billion in total. Energy storage, battery manufacturing, clean power, and the grid received the greatest number of loans and conditional commitments, while nuclear energy, carbon management, and non-battery or EV manufacturing received the least. No loans were issued for CIFIA, which is why that program is not shown in the following figures.

Program Design & Implementation

Flexible Contracting Mechanisms: Grants vs. Other Transactions

The majority of BIL and IRA funding (excluding loans) was implemented in the form of grants and cooperative agreements governed by 2CFR 200 and 2CFR 910. Even for programs for which the legislation did not specify the exact type of assistance mechanism that DOE should use (i.e., unspecified or “financial assistance”), the agency largely defaulted to those grants and cooperative agreements. One argument for this approach was that program officers and contracting officers are trained and experienced in using these mechanisms, which may have helped programs deploy faster. 

However, these grants were originally designed for R&D programs and faced some drawbacks when used for demonstration and deployment programs. 2CFR 200 and 2CFR 910 are almost 200 pages long, requiring extensive compliance that smaller organizations and organizations new to federal applications may not be equipped to navigate. Additionally, some terms and conditions required by those rules (e.g. for intellectual property, real property, and program income) were not compatible with private sector needs for demonstration and commercial-scale projects. Most consequentially, they require a termination for convenience clause, which allows the government to cancel an award without providing a reason. The Trump administration is now using that clause to terminate awards. 

Alternatively, DOE could have more frequently used its Other Transaction Authority (OTA) to enter into contracts without 2CFR regulations, allowing the agency to negotiate contracts more like the private sector would, developing terms and conditions as they make sense for the purpose of the specific purpose. This can enable DOE to design and implement more creative arrangements, such as for demand-pull or market-shaping mechanisms. DOE could have also leveraged OTs to make process improvements, rethink the traditional solicitation and evaluation process, and potentially accelerate implementation.3

DOE 3.0 missed a major opportunity to leverage these benefits of OTs. The few exceptions were the Hydrogen Demand Initiative (H2DI), the Advanced Reactor Demonstration Program, and Partnership Intermediary Agreements. Towards the end of the Biden administration, DOE discussed transitioning some of OCED’s awards to OT agreements, but did not get a chance to follow through before the presidential transition.4

DOE 4.0 should pick up where DOE 3.0 and deploy OTs more broadly among demonstration and deployment programs to overcome the challenges of traditional financial assistance regulations and processes. Congress should ensure that future authorizing legislation is designed to enable this flexibility–for example, by not specifying the type of assistance that DOE should use to implement new programs. 

Flexible Funding

BIL and IRA authorized and appropriated funding for a wide range of programs, many with very specific goals and eligible uses. That approach allows Congress to provide detailed direction to DOE on legislators’ priorities. However, DOE should also be able to respond dynamically to industries and markets as they develop. For example, when BIL and IRA were being developed, next-generation geothermal technologies were still quite nascent and received very little funding from these bills. Within two years though, the technology rapidly advanced, thanks to the success of the first few demonstration projects, and now shows enormous potential for meeting clean, firm energy demand, but DOE has limited funding available to support the industry.

In future legislation, Congress should consider establishing a few flexible funding programs that would give DOE a greater range of options to support the development of energy technologies and infrastructure as the agency’s experts know best. This could look like a pooled pot of funding with broad authority for DOE to use across technologies and/or activities, such as a single fund for demonstration and deployment activities broadly, or a single fund for grid infrastructure needs. If Congress is wary about this, legislators could start with creating flexible funding programs designed to fit within the scope of a single DOE office, before testing programs that cross multiple offices, which may come with intra-agency coordination challenges.

Program Design: Regional Hubs

The Hydrogen Hubs and Regional Direct Air Capture (DAC) Hubs were a new type of program established by BIL, designed to fund clusters of projects located in different regions rather than individual, unrelated projects. BIL invested $7 billion and $3.5 billion in these programs, respectively, and they made some of the largest awards by dollar amount – on the order of $1 billion per award – out of all of the BIL and IRA programs. 

The hub approach aimed to foster an industrial ecosystem, including not only multiple projects aiming to deploy the technology, but also future suppliers, offtakers, labor organizations, academic partners, and state, local, and Tribal governments. Concentrated regional investment and greater coordination would not only accelerate commercialization of hydrogen and DAC technologies but also help distribute the benefits of new clean energy industries across the nation. 

Due to the ambitious size and complexity of their goals, the Hydrogen Hubs and DAC Hubs required, and still require, a long timeline to develop. The structure and oversight DOE applied to the hub development process also extended timelines further. When the Trump administration began re-evaluating Biden-era programs and Congress started looking for funds to rescind, these two programs became appealing targets because of the large amount of funding they held and the lack of on-the-ground deployment progress – even though that was to be expected based on the program timeline.5 

Project cancellations and funding rescissions are a massive waste of both federal and private sector resources. In the future, before creating any other large-scale programs modeled on the Hydrogen Hubs and DAC Hubs, policymakers should first determine whether there is long-term bipartisan commitment to the program’s goals to avoid the possibility that a change of administration will jeopardize the program. If that commitment isn’t guaranteed, this model may simply be too risky to use; other types of assistance may be easier to implement or more resilient to changes in administration.

An alternate regional hub model that Congress and DOE could consider is the CHIPS and Science Act’s Regional Technology and Innovation Hubs and NSF Engines. These programs had a much lower level of ambition, providing awards – on the order of tens of millions instead of one billion – to seed early-stage innovation, build a research ecosystem, and support workforce development, rather than deploying specific technologies. 

Program Design: Demand-Pull 

Demand-pull mechanisms have emerged in conversations between FAS and former DOE staff as a very underutilized but promising tool for enabling the scaling and deployment of clean energy technologies and large-scale infrastructure projects. Confidence in long-term offtake is a requirement for private lenders to provide financing at a viable rate for projects. DOE can help provide that certainty through a wide range of tools, including purchase commitments and capacity contracts, contracts-for-difference, and other financial arrangements. 

By unlocking private sector investment, demand-pull mechanisms can reduce or eliminate the need for DOE to provide additional financing for project construction. However, public sector funding is still useful for pre-construction stages of project development, such as planning, siting, and permitting, which can be hard to get private sector financing for when other risks to a long-term revenue model have not been addressed yet.  

There are three primary use cases for demand-pull mechanisms: building shared infrastructure, demonstrating innovative technologies, and expanding industrial capacity. 

Shared infrastructure projects require a large number of customers and can sometimes struggle with securing them: customers are afraid to commit without the developer demonstrating that they’ve secured other customers first. DOE can help address this challenge by serving as an anchor customer for these projects and help attract additional customers. This also makes it easier to finance the project. 

A successful example of this from BIL is the Transmission Facilitation Program, which authorized DOE to purchase up to 50% of the planned capacity of large-scale transmission lines for up to 40 years. Once the transmission line is built, DOE can then sell capacity contracts to actual customers who need to use the transmission line and recoup the agency’s investment. This approach could be used for other types of shared infrastructure, such as hydrogen or carbon dioxide transportation, or even large clean, firm power plants (e.g., nuclear) for their generation capacity. 

First-of-a-kind projects often struggle to secure offtakers due to the unproven nature of their technology and the lack of a pre-existing market. For example, H2DI was designed to complement the Hydrogen Hubs program by directly supporting demand for select hydrogen producers and also helping establish a transparent strike price for the nascent market that would benefit all hydrogen producers. Other demonstration programs (e.g. IDP) would have also benefited from DOE support for demand and market formation.

Lastly, the development of new industrial capacity for producing energy technologies and their inputs can also face demand challenges because while there may be a pre-existing global market, the domestic market may be small or nonexistent, and existing offtakers may not be willing to reroute their supply chains without market or policy pressure to do so. This was most obvious with the critical minerals and battery supply chain projects that DOE tried to support. 

One successful model from the IRA was the HALEU availability program. DOE set up indefinite delivery, indefinite quantity contracts with companies developing HALEU production capacity and set aside $1 billion to procure HALEU from the five fastest movers. The purchase commitment created demand certainty, while the competitive model incentivized faster project development and ensured that the DOE’s funding would only go towards the most viable projects. More programs like this would be transformative for domestic supply chain development.

In designing demand-side support programs for these latter two categories, DOE must tailor the programs to the unique challenges of different technologies or commodities, and whether or not there are additional goals of domestic market formation and/or market stabilization. For example, auctions are a great tool for price discovery, while contracts-for-difference can help projects hedge against price volatility and overcome domestic price premiums. 

There are also double-sided market maker programs where DOE serves as an intermediary between producers and buyers, entering into long-term offtake commitments with project developers up front to provide demand certainty, and then reselling the product to buyers on a shorter-term basis when the project comes online This helps make supply chain connections and address mismatches between project developer vs. buyer timelines. For example, for low-carbon cement and concrete, buyers typically procure building materials on a short-term basis as needed for each project, but developers of first-of-a-kind production facilities require long-term offtake commitments in order to secure project financing.

Authorizing language and/or appropriations can be a barrier to DOE using demand-pull mechanisms. To address this issue, Congress should factor the following considerations into the design of legislation:

  1. Flexible Authorities. Due to the variety of demand-pull mechanisms and the need to tailor them to the unique market challenges of different technologies or commodities, they are best implemented using OT agreements. Statutory language that prescribes the exact type(s) of assistance (e.g., grants) for a program can prevent DOE from using demand-pull. Instead, Congress should provide clear goals for a program to achieve and leave DOE with the flexibility to determine the best type of assistance mechanism. 
  2. Budget Scoring and Timelines. Demand-pull mechanisms often involve multi-year advance commitments of funding, but the exact amount and timing of transactions may be uncertain, since it is conditional upon project performance and overall market conditions (e.g. contracts-for-difference payments are based on the market price at the time of the transaction). This results in budget scoring issues. Legally binding commitments of money can typically only be made if the agency has enough funding to obligate the full amount of the contract when it is signed, even if that funding probably won’t be paid out until much later.6 This results in the need for a significant amount of upfront funding, which can be difficult to obtain from Congress, and long timelines before the outcome of that funding is fully realized, which can make it difficult to manage congressional expectations. These long timelines also mean that no-year funding is ideal for DOE to be able to run demand-pull programs without the funding expiring.7
  3. Revenue Management. Some demand-pull mechanisms are designed with the potential for revenue generation, so legislation should ideally be designed to include the authorization of a revolving fund to allow revenue to be reused for program costs. Alternatively, DOE may contract with an external entity to manage the program funds, as it did with H2DI, so that the revenue can stay with the partner entity and be reused. 

Program Design: Prizes

Unlike most financial assistance, which operates on a cost-reimbursement basis and requires cost-share, prizes reward performance and are awarded after activities are completed and criteria have been met. This means there are no strings attached to the funding and no IP requirements, making these programs easier for applicants to work with.8 Prizes are also of a fixed amount, which incentivizes innovators to find least-cost solutions in order to maximize revenue from the award. On the flip side, innovators are responsible for any cost overruns, and DOE is not required to shoulder that risk. 

In the past DOE has used prizes wrongly to try and reach potential applicants that struggle with the application process for traditional assistance. It’s important to keep in mind the best use cases for prize programs. For example, prize programs rely on clear milestones, but are agnostic on the approach, making them great for interdisciplinary innovation. They can be beneficial for incentivizing new innovators to get involved with problem areas that don’t have many pre-existing solvers. They are also well-suited for small dollar amount awards that otherwise may not be worth the administrative overhead, since the overhead costs for prize programs are lower than traditional assistance programs once they have been designed.

Moving forward, DOE should keep in mind best practices for designing equitable prize programs. Prize programs should ideally be designed as stage-gated competitions with incremental prize payments for each phase, rather than one big payment at the end, so that innovators with fewer financial resources can participate. For example, the first stage could be the submission of a whitepaper with a proposed plan for developing and testing the technology, then the second stage could be lab work, and so on. Participants would be whittled down between each stage to hone in on the most competitive projects.

Program Design: Loans

DOE 4.0’s loan programs could be improved by setting clearer expectations on risk, clearer guidance on State Energy Financing Institution (SEFI) projects, and a strategy for using additional tools such as equity. 

Risk Tolerance. Discrepancies between statutory language and congressional oversight for DOE’s loan programs have historically made it difficult for the agency to determine the right balance of risk. For example, Title 1703 is designed by legislation to fund innovative, higher-risk, hard infrastructure projects that the private sector is typically reluctant to fund. A high-risk, high-reward program should, by nature, be allowed to have some failed projects and still be considered a success. However, Congress has historically been extremely critical of any defaulted loans, making DOE hesitant to use Title 1703 and ATVM to its full potential.

DOE 3.0 made some attempts to improve communications on its approach to risk management, but the agency could do more to communicate the success of its loan programs. Congressional authorizers should help the agency by building risk into the statute of DOE’s loan programs and budgets and better managing the expectations of oversight members.

State Energy Financing Institution (SEFI) Projects. Another area of reform that DOE 4.0 should tackle is the SEFI-supported projects under Title 17, authorized by BIL, which allows DOE to finance any energy project that also receives “meaningful financial support” from a SEFI, such as state energy offices or green banks. However, ambiguity in the statute behind this new carveout caused confusion among states on how exactly to partner with DOE’s loan program. What is considered meaningful financial support? What qualifies as a SEFI? To clarify these questions from states, either DOE 4.0 should create model SEFI guidance or Congress should amend the statute with clear definitions. 

Equity and Other Financing Tools. The Trump administration’s restructuring of the Lithium Americas Thacker Pass loan to include an equity warrant, which gives DOE the right to acquire equity of the company at a set price in the future, has raised questions as to what DOE’s role should be if it were to become an equity owner in a company and what guardrails and visibility is needed in such a scenario.9 Policymakers may also want to consider the risks and benefits of expanding DOE’s loan program authorities to include direct equity investments and other financing tools that agencies like the International Development Finance Corporation (DFC) have access to.10

Program Design: Technical Assistance

DOE 4.0 should expand its technical assistance offerings in three primary ways: technical advising and verification, navigating federal funding, and talent and workforce needs.

Technical Advising and Verification. DOE’s in-house scientific and engineering expertise is a major draw for funding applicants. For example, according to FAS conversations with former agency staff, the project developers behind Vogtle Units 3 and 4, which received a loan guarantee from DOE, would seek advice from LPO engineers when they had engineering questions. Private investors, who may lack the expertise needed for technical due diligence, often use DOE awards as a proxy for assessing project risk. As a result, some project developers will apply for DOE funding to prove their credibility to private financiers and negotiate lower financing rates. 

In the face of potential budget cuts, DOE 4.0 could leverage this strength by offering project certifications that would entail the same technical support and verification as a demonstration award or loan, without the funding support. This would provide a similar market signal to private investors, without costing DOE as much – just staff time. And since DOE is not taking on any project risk, the application and negotiation process could also be simplified and streamlined to align better with private-sector timelines. 

Navigating Federal Funding. DOE should dedicate increased resources to conducting outreach to underserved communities, small businesses, innovators, and new applicants about funding opportunities and shepherding them through the application process. For example, despite awareness of available funding opportunities, some Native American tribal organizations in Alaska were unable to pursue them due to a lack of bandwidth or expertise to participate in resource-intensive (and often times confusing) application processes, and the awards sizes were too small to make them worth the costs of external private consultants to support. Community Navigator Programs and other forms of technical assistance could help communities overcome these barriers to accessing federal support. PIAs can also help with reaching small businesses and new applicants to apply for programs.

Talent and Workforce Needs. DOE has had success with placing talent at state energy offices and other critical energy organizations like public utility commissions through the Energy Innovator Fellowship to embed expertise in under-resourced offices. DOE should consider expanding this program or establishing new programs to place experts at other institutions, such as grid operators, investor owned utilities, and local governments, to advise and support them in adopting new energy technologies and accelerating infrastructure deployment. 

Program Design: Community Benefit Plans

For all of its demonstration and deployment programs, DOE 3.0 introduced a new requirement that awardees create community benefit plans (CBPs) to ensure that communities would share in the benefits of local clean energy projects. CBPs have been both lauded and criticized by community and labor organizations: they praised their intent, but expressed frustration over their limited influence on companies’ plans and that allowable cost limits constrained what could be included in awards. Where CBPs were most effective, they encouraged developers to consider local communities and jobs, though this often required significant internal coordination to use DOE’s funding contracts as leverage. At the same time, CBPs were seen as an additional administrative burden on program implementation, contributing to delays. Under the Trump administration, CBPs will no longer be enforced and are no longer required for future funding opportunities. 

DOE 4.0 presents an opportunity to restore and improve CBPs as a mechanism for both distributing the benefits of federally-funded projects and improving project quality. To maximize impact, DOE 4.0 should focus on a smaller set of high-priority outcomes with clear, measurable success metrics. DOE 3.0’s broad mandate, which spanned jobs, justice, climate, and deployment across multiple programs, sometimes diluted effectiveness and created confusion for staff managing both program design and operations. In DOE 4.0, these outcomes should be closely linked to actual project success, whether through facilitating social license to ease permitting, or supporting workforce development to train and retain workers, as developers themselves emphasized when aligning with program goals. Providing actionable guidance, including templates and real-world examples of successful community benefits plans, can further improve project outcomes. The advocacy community can help lay the groundwork for DOE 4.0 by documenting successful case studies and model agreement language. Congress could help embed key priorities in statute, providing clear, practical guidance that reflects DOE’s administrative capacity and enhances the likelihood of successful implementation.

Additionally, it is critical that future CBP mechanisms account for community preferences, including local prohibitions on certain technologies and other expressions of community priorities. By proactively respecting local concerns, DOE can foster trust and strengthen the long-term impact of projects. DOE 4.0 will also need to navigate tensions around labor preferences. While the department cannot explicitly require union labor, questions about labor practices may signal preferences that vary across states, including right-to-work contexts. This underscores the importance of sensitivity to local norms and expectations.

Where resources allow, DOE 4.0 should hire and dedicate staff with expertise in labor engagement and community partnerships to review applications and provide technical assistance, supporting applicants in navigating the CBP process and designing high-quality, community-centered projects. Technical assistance needs to be done carefully though to avoid perceptions of bias and influencing the award selection process. 

Lastly, clear and consistent guidance across DOE offices is essential. For example, applicants have reported a lack of clarity about what activities qualify as “allowable costs” in CBPs, and different offices have applied inconsistent standards. Establishing a unified, expansive approach to allowable costs—including activities that indirectly support clean energy workforce development, such as community child care programs—can unlock transformative opportunities for local communities. This standardization should be done for other aspects as well. In general, official guidance needs to find a better middle ground between the overly technical, lengthy documents and vague webinars produced by DOE 3.0, so that ideally applicants can understand requirements without staff intervention. 

Conclusion

Good program design is fundamental to effectively engaging with researchers, industry, state and local governments, and communities, in order to realize the full potential of DOE funding. Though much of the real-world impact of BIL and IRA is still yet to come, DOE can already begin learning from the challenges and successes of program design and implementation under the Biden administration. The recommendations in this report are just as applicable to the remaining funding from BIL and IRA that DOE has yet to implement, as they are to future programs. Moving forward, Congress has the opportunity to reconsider the way that programs are designed in future legislation, especially those targeting demonstration and deployment activities, and make sure that DOE has clear direction and the right authorities and flexibility to maximize the impact of federal funding.

Acknowledgements

The authors would like to thank Arjun Krishnaswami for coining the idea of DOE 4.0 and his insightful feedback throughout the development and execution of this project. The authors would also like to thank Kelly Fleming for her leadership of the clean energy team while she was at FAS. Additional gratitude goes to Claire Cody at Clean Tomorrow, Gene Rodrigues, Keith Boyea, Kyle Winslow, Raven Graf and all the other individuals and organizations who helped inform this report through participating in workshops and interviews and reviewing an earlier draft.

Appendix A. Acronyms

ATVMAdvanced Technology Vehicles Manufacturing Loan Program
BILBipartisan Infrastructure Law (a.k.a the Infrastructure Investment and Jobs Act)
CBPsCommunity Benefits Plans
DACDirect Air Capture
DFCInternational Development Finance Corporation
DOEDepartment of Energy
DoWDepartment of War
EDFOffice of Energy Dominance Financing
EGSEnhanced Geothermal Systems
FEOCForeign Entity of Concern
FERCFederal Energy Regulatory Commission
FORGEFrontier Observatory for Research in Geothermal Energy
GDOGrid Deployment Office
GETsGrid Enhancing Technologies
GRIPGrid Resilience and Innovation Partnerships
GTOGeothermal Technologies Office
H2DIHydrogen Demand Initiative
HGEOHydrocarbons and Geothermal Energy Office
IDPIndustrial Demonstration Program
IRAInflation Reduction Act
LPOLoan Programs Office
NARUCNational Association of Regulatory Utility Commissioners
NASEONational Association of State Energy Officials
OBBBAOne Big Beautiful Bill Act
OCEDOffice of Clean Energy Demonstrations
ORISEOak Ridge Institute for Science and Education
OTOther Transactions
OTAOther Transactions Authority
PPAsPower Purchase Agreements
SEFIState Energy Financing Institution
TEFPTribal Energy Financing Program
TFPTransmission Facilitation Program
Title 1703Title XVII Innovative Energy Loan Guarantee Program
Title 1706Title XVII Energy Infrastructure Reinvestment Financing Program
USGSU.S. Geological Survey

Appendix B. BIL and IRA Funding Distribution Methodology

The funding distribution heat map at the beginning of the report includes all of the BIL and IRA programs with funding authorized and/or appropriated directly to DOE, excluding loan programs. The following were not included in this table:

  1. Loan programs, which are funded differently than traditional programs;
  2. Tax credits that DOE helped design (e.g., 45X), which are also funded through a different mechanism; and
  3. Programs implemented by DOE, but funded by other agencies’ appropriations, such as the Methane Emissions Reduction Program funded by the Environmental Protection Agency.

Programs were tagged according to their sector or technology area, their activity area, and type of assistance based on key words in their statutory language. Programs could be tagged with multiple sectors/technologies, activity areas, and/or types of assistance.

To determine the amount of funding for each sector/technology and activity area combination, all of the programs with the corresponding tags were included in the sum. Because of this duplicative counting, the sum of the dollar amounts in the table exceeds the total amount of funding for all of these programs. Sector/technology totals were calculated without this duplication, which is why those amounts are less than what one would obtain by summing all of the activity area amounts for a sector/technology. 

Activity area categories:

Sector/technology categories:

One Year into the Trump Administration: DOE’s FY26 Budget Cuts and the Path Forward

This piece is the last in a series analyzing the current state of play at DOE, one year into the second Trump administration. The first piece covers staff loss and reorganization; the second piece looks at the status of BIL and IRA funding and the impact of award cancellations.

Overview of DOE Funding for FY26

On January 15th, Congress passed the FY26 E&W Appropriations as part of a second minibus along with the Commerce, Justice, Science and the Interior and Environment Appropriations (bill text and joint explanatory statement). Assuming the President signs this package into law, it will dictate DOE’s funding through the rest of FY26, which ends in September, and potentially into FY27 if any continuing resolutions are passed in the next appropriations cycle. 

Though the administration originally requested drastic cuts to all of DOE’s offices involved in clean energy RDD&D, the FY26 E&W Bill takes a much more restrained approach to budget cuts and reprograms some BIL funds to bolster EERE, NE, FE, and SC budgets. Notably, Congress increased appropriations levels for SC, NE, and SCEP, despite DOE’s request to zero out the budget for SCEP. Overall, compared to FY25, the FY26 Appropriations enact a 1.4% cut to the agency’s budget – a modest amount compared to DOE’s original request for a steep 7.0% cut. 

The passage of the FY26 E&W Appropriations is a major accomplishment for Congress, especially given the short timeline over which the conferenced bill came together and the rejection of the deep cuts advocated for by this administration. Nevertheless, even minor cuts threaten to decelerate progress on energy innovation, manufacturing, and infrastructure necessary for the United States to meet energy demand growth, reliability, affordability, and security challenges – precisely when we need it the most. As we begin the FY27 appropriations process this year, it’s all the more important that Congress not only maintain stable funding levels for DOE, but also begin to rebuild momentum for energy innovation and technological progress.

Reallocation of Unobligated BIL Funds

Section 311 of the FY26 E&W bill repurposes $5.16 billion in unobligated funding from BIL for the following programs:

The Civil Nuclear Credit Program is a new addition that was not present in either the House or the Senate’s original versions of the E&W bill. The other programs targeted for reallocation and the corresponding amounts were all proposed in either the House and/or the Senate’s original versions of the E&W bill. Notably, funding for the Hydrogen Hubs was spared after conferencing, despite previous inclusion in both chambers’ E&W bills.

The reprogrammed funds are to be used as follows:

These moves reflect Congress’ emphasis on advanced nuclear demonstration projects, growing concern over grid supply chain bottlenecks, and continued commitment to funding EERE activities, as well as skepticism about the goals and execution of carbon management demonstration programs. 

Zooming in: EERE Suboffices

DOE’s FY26 budget request proposed a major contraction of the EERE portfolio, explicitly requesting zero funding for four sub-accounts Hydrogen and Fuel Cell Technologies, Solar Energy Technologies, Wind Energy Technologies, and Renewable Energy Grid Integration. For the first three, the Department argued that these technologies had reached sufficient market maturity to rely primarily on private capital—which is definitely not the case for hydrogen and fuel cell technologies, and inconsistent with DOE’s continued funding for more mature technologies such as nuclear, coal, and gas. For Renewable Energy Grid Integration, DOE argued that the work would be absorbed into other programs. DOE also sought to near-eliminate the budget for the Building Technologies Office (BTO) and the Vehicle Technologies Office (VTO) by requesting only $20 million and $25 million, respectively, signaling a broader retreat from technologies that would support electrification, energy efficiency, and affordability.

Congress largely rejected wholesale eliminations in the FY26 bill they passed. Compared to FY24 and FY25 enacted levels, the deepest cuts for FY26 were for Solar Energy Technologies (31%) and Wind Energy Technologies (27%). Hydrogen and Fuel Cell Technologies was also targeted for deep cuts in the original House and Senate appropriations bills, but ended up with only a 6% budget cut after conferencing and passage, putting the office in a better position than many of the other EERE suboffices that lost more than 10% of their annual budget. The only two offices that received budget increases were Geothermal Technologies (27%) and Water Power Technologies (10%), reflecting Congress’ prioritization of clean firm energy technologies. 

EERE suboffice funding amounts are dictated in the Joint Explanatory Statement, a report that accompanies annual appropriations bills and provides detailed guidance on how funds are to be allocated within the topline account numbers set by the appropriations bill. Historically, agencies have always adhered to report language; even under full-year continuing resolutions, agencies would still follow the funding guidance set in the prior fiscal year’s report language. 

The second Trump administration broke this precedent: DOE’s FY25 spend plan – released more than three-quarters of the way through the fiscal year – shifted more than $1 billion away from core clean energy programs under EERE, disregarding Congressional direction in the FY24 appropriations report.1 DOE moved funding away from Vehicle, Hydrogen and Fuel Cell, Solar, Wind, and Building Technologies, towards Renewable Energy Grid Integration and Water Power, Geothermal, Industrial, and Advanced Materials and Manufacturing Technologies. These actions have raised concerns about whether the administration will attempt to do the same in FY26.

Zooming in: National Labs

The Joint Explanatory Statement does not provide guidance on how DOE allocates funding to national labs, though there tends to be a trickle down effect depending on which offices labs are reliant on funding from. DOE proposed drastic cuts to the FY26 budgets of many national labs, particularly those that get a significant amount of funding from EERE. Under the proposed budget cuts, the national labs would reportedly plan to lay off 3,000 or more scientists and other staff. 

The National Renewable Energy Laboratory (NREL) – recently renamed the National Lab of the Rockies, or NLR for short – faces the largest proposed budget cut of 72% because it’s affiliated with EERE and gets the majority of its funding from that office. Such deep cuts would require NLR to lay off up to a third of its staff and shut down many of its facilities and ongoing activities. 

With the passage of FY26 appropriations, hopefully, DOE will reconsider funding for national labs and adjust budgets upwards to reflect the much milder cuts that Congress passed.

Long-Term Impacts

Sustained budget cuts to DOE pose significant long-term risks to the nation’s scientific enterprise and ability to compete globally. Because DOE is the federal government’s primary engine for energy research and advanced technology commercialization, reductions in funding have both immediate operational consequences, as well as lasting structural ones. 

Budget cuts translate directly into workforce attrition across DOE program offices, national laboratories, and partner institutions. When staffing levels fall, the federal government’s capacity to execute world-leading scientific research diminishes. Essential functions like managing user facilities, overseeing complex R&D portfolios, and ensuring the continuity of long-term research programs are all jeopardized, slowing the pace of innovation and limiting the nation’s ability to respond to emerging scientific and energy challenges.

Loss of program funding and workforce capacity raises a broader strategic concern: the U.S. may no longer retain the scientific and engineering talent necessary to develop next-generation energy technologies. DOE plays a critical role in cultivating and sustaining technical talent pipelines through early-career research programs, national lab fellowships, university partnerships, and long-term R&D initiatives that span decades. When the continuity of these programs is disrupted, students, postdocs, and mid-career researchers may exit the field entirely or shift their expertise abroad, diminishing the domestic talent base. These losses cannot be quickly reversed as rebuilding a skilled scientific workforce takes sustained investment, stability, and opportunity signals that cuts fundamentally undermine. 

Attrition is not limited to DOE itself. The broader U.S. science and innovation workforce – spanning clean energy startups, universities, private-sector R&D, and communities that host national laboratories – absorbs the shock of federal retreat. Reduced research funding forces universities to shrink labs, scale back graduate cohorts, and limit collaborations with DOE facilities. National laboratory communities, often in rural or specialized high-tech regions, face economic consequences when jobs disappear or major facilities reduce their operating capacity. The ripple effects of lost researchers, technical staff, and support personnel weaken the entire innovation ecosystem that underpins clean energy deployment. 

Quantifying these long-term losses is essential. Each scientist or engineer who leaves the field takes with them years of specialized training, intellectual and institutional capital, and future contributions to technological advancement. The economic value of these foregone innovations – from delayed commercialization timelines to missed breakthrough discoveries – can be substantial. A shrinking innovation pipeline also slows private-sector investment domestically and increases dependence on imported technologies at a moment when global competition in clean energy, advanced computing, and critical minerals is accelerating. 

In the long run, sustained budget cuts compromise the United States’ ability to remain a global leader in science and innovation. They jeopardize advancements in energy innovation, undermine national competitiveness, and reduce the nation’s capacity to deliver affordable, secure, and clean energy solutions. Protecting DOE’s workforce and research infrastructure is therefore not only a matter of annual appropriations, but also a long-term investment in America’s economic strength and technological leadership. 

Conclusion: The Path Forward

As we begin the second year of the second Trump administration, DOE sits upon the precipice of transformation. Over the past year, the rapid pace and unprecedented scale of changes to the agency’s staff, organizational structure, programs and awards, and budget have generated waves of uncertainty and volatility that has rippled out across the energy sector, destabilizing commercial projects worth billions of dollars, as well as DOE’s relationship with the private sector, state and local governments, its own career staff.

After all these changes, whether DOE transforms for better or worse will depend on the decisions this administration makes over the next three years. Realizing this administration’s priorities of energy dominance and abundance will require DOE to rebuild its technical and organizational capacity to design and implement programs, oversee loans and awards, and engage in public-private and intergovernmental partnerships. 

This should start with carefully managing the agency’s reorganization and providing clearer, more detailed explanations to the public on the mandate and internal structure of new offices and where existing programs and activity areas have been moved, and guidance to employees about how the reorganization will impact their roles and the programs on which they work.  DOE leadership should then evaluate the functions and capacities missing under the new organizational structure and rehire for those roles, ideally with the reinstatement of remote work flexibility.

As the agency rebuilds internal capacity, it should reorient efforts away from reacting to the previous administration and towards actions that will build the infrastructure necessary to modernize and expand the energy system, ensure reliability and affordability in the face of demand growth, secure energy supply chains, and maintain U.S. leadership in energy innovation. The wave of funding opportunity announcements for BIL critical minerals programs over the past few months was a good start, but that is not DOE’s only mandate. DOE must also restart activities across other technologies and sectors. Luckily, the agency still has $30 billion plus in funding from BIL and IRA that has yet to be awarded. In implementing the remaining funding, DOE can learn from the many lessons learned reports on the previous administration’s experience and adopt internal reforms. The agency should also make sure to adhere closely to the statutory intent behind this funding.

Lastly, stable year-to-year funding is essential for progress. As Congress begins the FY27 appropriations process this month, congress members should also turn their eyes towards rebuilding DOE’s programs and strengthening U.S. energy innovation and reindustrialization. Higher DOE funding levels will be necessary to put the United States back on a growth trajectory with respect to global energy leadership and competitiveness. 

Acknowledgements

The authors would like to thank Megan Husted and Arjun Krishnaswami for their pivotal roles in shaping the vision for this project, planning and executing the convenings that informed this report, and providing insightful feedback throughout the entire process. The authors would also like to thank Kelly Fleming for her leadership of the project team while she was at FAS. Additional gratitude goes to Colin Cunliff, Keith Boyea, Kyle Winslow, and all the other individuals and organizations who helped inform this report through participating in workshops and interviews and reviewing an earlier draft. 

One Year into the Trump Administration: DOE Awards Cancelled and Programs Stalled

This piece is the second in a series of analyzing the current state of play at DOE, one year into the second Trump administration. The previous piece on staff loss and reorganization can be read here.

Introduction

$25.8 billion in BIL appropriations, over a third of the total amount, have yet to be awarded, plus up to $4.3 billion in IRA funding left after OBBBA rescissions. Yet, for the entire first year of the Trump administration, DOE has focused primarily on undoing the work of the prior administration. Politically motivated award cancellations and the delayed distribution of obligated funds have broken the hard-earned trust of the private sector, state and local governments, and community organizations. DOE also carried out a significant internal reorganization that eliminated many of the commercialization and deployment focused offices and moved their programs into other offices, leaving their futures unclear. 

The implementation of remaining BIL and IRA funding has been stalled across the board (except for critical minerals-related programs), and the administration has attempted to push the limits of legislative interpretation by redirecting funds for carbon capture and rural and remote energy improvements towards bringing inactive coal power plants back into service and/or extending the life of coal plants near retirement. 

Overview of BIL and IRA Funding Status

BIL and IRA appropriated $71 billion and $35 billion, respectively, in funding for DOE clean energy programs. Once appropriated, DOE funding moves through three phases before being received by awardees:

  1. First, funding is awarded when DOE selects and announces the recipients for a program. Only 57% of BIL funding and 52% of IRA funding was awarded by the end of the previous administration.
  2. Then, funding is obligated when DOE legally commits the amount to the recipient through a contractual agreement. Obligations may be made in phases over time, especially if the award is of a large amount. Thirty-three percent (33%) of BIL funding has been obligated as of December 17th, 2025.
  3. Finally, funding is outlayed when the money is paid to the recipient(s) and officially transferred out of the federal government’s account. This can occur in installments over the course of the period of performance or through a single up-front payment. Four point eight percent (4.8%) of BIL funding has been outlayed as of December 17th, 2025.

Under the current administration, at least $11 billion, or 32%, of unobligated IRA funding was rescinded through the One Big Beautiful Bill Act (OBBBA), including the IRA credit subsidy appropriations for DOE’s loan programs, while $5.16 billion in BIL funding was transferred for other purposes by the Fiscal Year 2026 (FY26) Energy and Water Development (E&W) bill. Mass rescissions and reallocations of funding on this scale have been unheard of in the past.

A further $6.8 billion in BIL awards and $2.5 billion in IRA awards have been cancelled by the Department of Energy, primarily because they do not align with the new administration’s priorities. For BIL, the cancellations will impact 17% of awarded funding, 14% of obligated funding, and 3% of outlayed funding. For IRA, the cancellations will impact 7% of awarded funding. While DOE has in the past made one-off cancellations of individual awards for various reasons, mass cancellations on this scale are unprecedented and uniquely destructive to the relationship between DOE and the private sector, not to mention state and local governments and community organizations.

Award Cancellations

The first round of DOE award cancellations were announced in May 2025. The 24 cancelled awards, worth $3.7 billion, all came from OCED programs funded by BIL and IRA. The Industrial Demonstration Program (IDP) was the most severely impacted: 18 awards worth $3 billion, half of the total for the program, were cancelled. The other primary targets from this round of cancellations were the Carbon Capture Demonstrations Program and the Carbon Capture Large-Scale Pilots Program.

In early October 2025, DOE announced the cancellation of another 321 awards, worth over $8 billion. Of those awards, five from the IDP were duplicates from the May announcement. Once again, OCED’s programs were the most heavily impacted, with GDO a close second. The largest awards cancelled were the two west coast Hydrogen Hubs, each worth at least $1 billion and three of the Grid Resilience and Innovation Program (GRIP) awards located in California, Minnesota, and Oregon. Unlike the first round, other DOE awards not funded by BIL or IRA, roughly half of the list, were also cancelled. These awards primarily came from EERE and FE.

Only about 1.5% of the funding for these BIL and IRA awards was outlayed before they were cancelled. Non-BIL and IRA awards fared slightly better, with 38% of funding outlayed before they were cancelled. As a result of these cancellations, awardees may decide to abandon their projects entirely, which would end up wasting the hundreds of millions of dollars of federal funding that has already been spent.

The most direct impact of these cancellations is that communities that were promised jobs and other benefits will no longer get them. DOE is breaking its commitment to companies, workers, and other stakeholders, taking away the economic opportunity that new investments provided. 

Moreover, federal funding would not be the only funding wasted: many of the canceled awards came with matching private-sector investments, totaling over $5.7 billion. In order for those private-sector investments to be put to use, project developers would need to seek additional funding to close the gap left by cancelled DOE awards. Even in the best case scenario, that process requires additional time and effort, resulting in delays and higher overall project costs. 

The vast majority of these private-sector investments were intended to fund grid resilience and modernization projects. In the face of demand growth and grid reliability challenges, particularly from data centers, it seems counterintuitive to pull funding from these projects rather than doubling down on investments to improve and expand our grid infrastructure. These cancellations also run counter to the administration’s stated priority of “unleashing American energy” and will make it harder to provide the electricity needed to power the AI applications and innovations touted by this administration.

An additional list of projects has been circulating since the beginning of October, said to contain an additional $16 billion worth of projects being considered by DOE for cancellation. In late October 2025, Politico’s E&E News reported that DOE confirmed the cancellation of five of the projects on that list, totaling $718 million in funding, because they were not “economically viable.” All of the projects were funded by the Office of Manufacturing and Energy Supply Chains (MESC), which had been largely spared by the previous rounds of cancellations. Four of the cancelled awards were from the Battery Materials Processing and Battery Manufacturing Grant Programs, while the other award came from the Advanced Energy Manufacturing and Recycling Program. Since then, at least one of the projects, a lithium iron phosphate plant in Missouri, has folded, partially as a result of the DOE award cancellation.

In response to the cancellations, most companies are challenging the decision and seeking as much compensation as they can through the courts. The Supreme Court has ruled that challenges to the termination of specific awards must be filed through the U.S. Court of Federal Claims, which is understaffed and struggling with significant backlogs and delays. However, while large companies may be able to wait six months or up to one year for compensation, many small businesses and startups will go under if they cannot get recourse in time and run out of funding to keep paying their employees. Furthermore, the Federal Claims Court does not have the authority to reinstate terminated grants or contracts, which is what companies actually want.

A coalition of energy and environmental organizations filed a lawsuit over seven of the cancelled grants and won, arguing that DOE’s termination decisions were politically motivated and thus illegal, targeting awards primarily because they were located in blue states and/or funded clean energy technologies that the administration opposes. Those seven award cancellations have now been blocked by the judge’s decision, but the hundreds of other cancellations will continue unless additional lawsuits are brought forth.

All of this has resulted in a growing belief across the private sector (and also local governments and community organizations) that federal grants and contracts are no longer guaranteed to survive a change in administration. This destroys the trust built by 50 years of DOE upholding its contracts and commitments to the private sector. The Biden administration expanded this partnership with the private sector further, conducting significant outreach to improve interest from top tier companies in BIL and IRA programs. Now, all of that hard-won trust has been undone. 

Members of Congress from both sides of the aisle have been watching these cancellations with concern. Section 301 of the FY26 E&W Bill introduces a new requirement that DOE must notify both the House and Senate Appropriations Committees at least three full business days before the agency issues a letter to terminate a grant, contract, other transaction agreement, or lab call award in excess of $1 million. The same requirement applies to any letter to terminate nonoperational funding for a national lab if the total amount is greater than $25 million.

Loan Cancellations, Delays, and New Terms

In addition to reevaluating and cancelling awards, DOE leadership also reevaluated the loans and conditional commitments made under the Biden administration, slowing down the evaluation process. So far, DOE has publicly terminated a $4.9 billion conditional commitment for the Grain Belt Express transmission. DOE was also reported to have plans to cancel six more conditional commitments and one active loan, totaling $8.5 billion. Former LPO staff have shared that these terminations were mutually agreed upon between the borrowers and DOE due to project economics. Some of this administration’s policies (e.g. the permitting ban on wind energy projects) may have indirectly contributed to worsening project economics.

Under the current administration, DOE has moved some projects that align with the White House’s priorities from conditional commitment to close – namely, AEP’s transmission upgrades and Wabash Valley Resources’ Coal-Powered Fertilizer Facility – and fast tracked a loan to restart the Three Mile Island Crane nuclear unit directly to close. However, for other projects less aligned with this administration’s priorities, DOE appears to be delaying the process to move conditional commitments forward and close out the loans. Former agency staff from the office claim that this is a way to softly cancel loans by putting timelines in limbo and waiting out the borrower, since conditional commitments have a maximum window of two years to either move to close or be rejected.

Changes to the term sheet when closing a loan is another way to force applicants out of the pipeline. Applicants typically receive an initial term sheet with the conditional commitment and then a final term sheet when closing the loan; applicants may not be able to accept or accommodate drastic changes between the two.

Notably, this administration restructured Lithium Americas’ Thacker Pass loan after it was closed, but before funds were disbursed. LPO has the right to restructure loan terms and get new conditions or concessions to protect taxpayer resources if there are concerns, but this is rarely done. LPO negotiated the right to 5% equity in Lithium Americas and 5% equity in the Thacker Pass joint venture in the form of a warrant. The agency statement points to LPO’s loan to Tesla in 2010 as precedent for using warrants. This move raises the question of whether LPO will be negotiating additional equity stakes in future loan agreements, given this administration’s many other equity deals. 

Remaining BIL & IRA Funding and Awards

Loans are not the only thing DOE has slow-walked: recipients of active BIL and IRA awards have complained that DOE also delayed the distribution of obligated funds and was not paying invoices in a timely manner. This issue was especially acute in the beginning of 2025, when many grants and contracts were frozen and recipients were told to stop all work while new DOE leadership reviewed their funding. While some projects were allowed to move forward, some remained in limbo even towards the end of 2025, causing significant uncertainty and financial stress to awardees.

As for the remaining unobligated BIL and IRA funds, DOE has not issued any new funding opportunity announcements (FOAs), except for critical minerals-related programs, which have been favored by this administration, and a repurposing of BIL funding to support coal power plants:

Acknowledgements

The authors would like to thank Megan Husted and Arjun Krishnaswami for their pivotal roles in shaping the vision for this project, planning and executing the convenings that informed this report, and providing insightful feedback throughout the entire process. The authors would also like to thank Kelly Fleming for her leadership of the project team while she was at FAS. Additional gratitude goes to Colin Cunliff, Keith Boyea, Kyle Winslow, and all the other individuals and organizations who helped inform this report through participating in workshops and interviews and reviewing an earlier draft. 

Appendix: Methodology for BIL and IRA Funding Analysis

Data on total BIL and IRA appropriations and award amounts was obtained from the archived Invest.gov website created by the Biden administration’s White House. Loan amounts were not included, since loan authority is separate from appropriations. The archived Invest.gov website has not been updated since the end of the Biden administration. As of December 17th, 2025, the Trump administration has not made any new awards yet with BIL or IRA funding, so the data should be accurate up to that date.

Data on obligations and outlays came from the Department of Treasury’s USA Spending database. The total amount of obligations and outlays of BIL funding for DOE was determined by filtering for the Disaster Emergency Fund Codes for Infrastructure Spending associated with BIL and DOE as the Awarding Agency. All assistance awards and contracts that resulted from these filters were included in the total amounts. 

The obligations and outlays for cancelled BIL and IRA awards in October were determined by searching the database for each unique award ID found in the list obtained by Latitude Media. The total amount of obligations and outlays for cancelled BIL and IRA awards in May was determined by searching the database for the awardees in the list reported by The New York Times and matching the award amounts, award location, and/or award description. All available data up until December 17th, 2025 was included. USA Spending tracks the amount of obligations and outlays for each award that came from BIL; this data was used to determine whether or not a cancelled award was funded by BIL. Whether or not a cancelled award was funded by the IRA was determined based on whether or not the award description explicitly mentions IRA and/or searching official DOE announcements and other public documents for the specific award using the recipient name and award description available on USA Spending. Any remaining awards were assumed to be funded by neither BIL nor IRA.

In this report, the total amount of unobligated funding rescinded by OBBBA is a minimum estimate. The minimum rescission amount for every loan program listed in Section 50402 of the OBBBA was determined by subtracting the total funding obligated from the loan program account between FY23 and FY25 (found on USA Spending) from the total appropriations for the program from the IRA (found in the bill text). The minimum rescission amount for every other program listed in Section 50402 of the OBBBA was determined by subtracting the total funding awarded for the program from the total appropriations for the program (both obtained from Invest.gov).

One Year into the Trump Administration: DOE’s Diminished Organizational Capacity

This piece is the first in a series analyzing the current state of play at DOE, one year into the second Trump administration.

As the heart of energy innovation and infrastructure policy in the federal government, the Department of Energy (DOE) and its national labs play a crucial role in ensuring that the energy sector can meet the needs of the American people and the economy. DOE serves as a key funder of R&D for not just energy technologies, but also basic science and emerging technologies like AI and quantum computing. DOE’s 17 national labs are key supporters of that mission, conducting R&D in house and hosting facilities used by tens of thousands of researchers and innovators from the private sector and academia. 

Over the course of 2025, the second Trump administration has overseen a major loss in staff at DOE; the cancellation and slow-walking of awards across the agency, primarily from Bipartisan Infrastructure Law (BIL) and the Inflation Reduction Act (IRA) programs but also others; the rescission of billions of dollars from IRA programs through the One Big Beautiful Bill Act (OBBBA). Most recently, Congress passed FY26 appropriations for DOE, reducing funding levels and reallocating BIL funding.

These changes will not deliver the energy and innovation impacts that this administration, or any administration, wants. The departure of seasoned career staff takes with them significant technical expertise and institutional knowledge; while the loss of new talent recruited from the private sector diminishes DOE’s industry and project finance expertise. Reducing DOE’s organizational capacity like this undermines DOE’s fundamental ability to carry out its mission and implement programs crucial to U.S. energy security, innovation and abundance. 

Staff Loss

DOE has experienced deep and systematic cuts to its career staff. Early in the administration, the President issued an executive order calling for “large-scale reductions in force” (RIFs) across all executive branch agencies.1 As a part of that effort, the administration launched the Deferred Resignation Program (DRP), which was first offered on January 28th, 2025 and then again at the end of March 2025. This “fork in the road” gave career staff the option to resign or, if eligible, retire voluntarily in return for retaining their pay and benefits through September or December 2025, respectively. Expectations of upcoming RIFs incentivized many career staff to opt in to the program, rather than risk being laid off without the DRP benefits. Congressional leaders have questioned the legality of this program.

Nevertheless, the DRP was fully implemented by the Trump administration over the course of 2025, driving the majority of staff departures at DOE during the first six months of the administration. Staff data obtained by FAS indicate that 21% of DOE staff departed the agency between January 16th, right before the Trump administration began, and June 6th of 2025.2 Nineteen percent (19%) of DOE staff participated in the DRP, far outnumbering those who left the agency through other paths (e.g. layoffs, other resignations or retirements, etc.).3,4

The largest number of departing staff came from the offices under the former Under Secretary for Infrastructure (S3), which lost 52% of its staff due to the DRP and 55% of staff overall. At the most extreme end, the Office of Clean Energy Demonstrations (OCED), established by BIL under the Biden administration, lost 80% of its staff due to the DRP and 84% of its staff overall.  Other new offices established under the Biden administration, such as the Grid Deployment Office (GDO) and the Office of State and Community Energy Programs (SCEP), also suffered heavy losses.

In addition to the DRP, the S3 offices lost a number of staff to the Trump administration’s decision to end remote work, despite a Government Accountability Office (GAO) report finding that remote work policies improve talent attraction and retention, while reducing costs and enhancing productivity. Under the Biden administration, remote work policies enabled DOE to hire early- and mid-career staff who were unable or unwilling to move, especially those from the private sector who had valuable experience with commercial project development and finance.5 The new S3 offices established under the Biden administration benefitted the most from this, since they needed to rapidly hire qualified staff to design and implement programs for the large amounts of funding they received from BIL and IRA.

By attracting many industry leaders from the private sector, the S3 offices were able to build trust with major energy companies, leading to much higher participation from top companies in BIL and IRA programs compared to the American Recovery and Reinvestment Act (ARRA). Many of the staff responsible for this heightened private sector trust have now left the agency. 

Offices under the former Under Secretary for Science and Innovation (S4) also suffered greater than average loss of staff: 28% due to the DRP and 29% overall. Even the Office of Fossil Energy (FE) and the Office of Nuclear Energy (NE) lost nearly a third of their staff. According to former DOE staff, some people moved from S3 to S4 in anticipation of the transition to the Trump administration.6 In particular, many of them moved to NE, which is why the number of staff in NE on January 16th actually exceeded the number of total positions the office was supposed to have.

During the October government shutdown, the Trump administration directed agencies to move forward with another round of RIFs. DOE leadership informed staff in OCED, the Office of Energy Efficiency and Renewable Energy (EERE), the Office of State and Community Energy Programs (SCEP), and the Office of Minority Economic Impact that they may be fired, transferred, or reassigned due to their involvement in implementing programs under the Biden administration. The Data Foundation estimated that 187 staff were impacted by the RIF. However, the Continuing Resolution, passed on November 12th to end the shutdown, rescinded the RIF notices and guaranteed backpay to impacted federal workers.

The Impacts of Staff Loss

Staff changes and resignations at DOE will inevitably slow down implementation and threaten DOE’s ability to fulfill its mandate. DOE has struggled over the past few years to obligate funding from its budget due to its lengthy application and award negotiation process. Crucial to that process are the institutional knowledge and cohesion between technical and legal contracting teams that career staff build up over time. Every staff member lost creates a gap in the implementation process; the loss of so many staff members threatens to break down DOE’s operations entirely. Even if new staff are hired, that institutional knowledge and working dynamic can’t be recovered.

Contracting in particular is a major bottleneck for implementation. Career staff with decades of contracting experience have now left the agency and national labs. In particular, this loss will make it more difficult to implement demonstration and deployment programs like those funded by BIL and IRA, which require novel and very detailed contracting work.

Furthermore, the deep cuts to S3 call into question DOE’s ability to implement the remaining BIL and IRA funding for demonstration and deployment programs, not to mention DOE’s ability to oversee the billions of dollars worth of demonstration and deployment awards it has already made. Many of the new S3 staff were intentionally hired from the private sector for their industry knowledge and connections. These federal workers were subsequently the first to leave after the presidential transition. They took a risk in working for the federal government, and then were made to feel expendable by the new administration’s heavy-handed attempts to push people out. That experience will color any future attempts by DOE to rehire private sector talent.

The damage to implementation from staff losses will have direct impacts on peoples’ lives. For example, a 63 percent cut to SCEP staff means that whichever new office in charge of its programs post-reorganization (see next section) will not have enough capacity to run key energy affordability programs, like rebates to low-income households for cost-saving appliances or weatherization programs that keep peoples’ homes warm and reduce utility bills. Gutting of OCED and GDO will mean that major projects have a smaller chance of getting built, denying communities the new jobs and energy infrastructure they were promised. 

In addition to implementation capacity, DOE is losing technical expertise that is crucial to informing its research and innovation agenda. DOE’s S4 offices have historically housed the top experts on technology areas from battery chemistry to solar panel design to advanced turbines. Many of these industry-leading experts have now left the agency, which will hamstring DOE’s ability to support private sector innovation in technologies that are critical to building an affordable and reliable energy sector and maintaining U.S. leadership globally.  

The loss of crucial staff can also be expensive. For example, DOE has traditionally relied on internal counsel for the majority of its programmatic work. Now, however, roughly 50% of the field lawyers at DOE who run contracting and oversee the national labs are gone. In September 2025, DOE issued a solicitation for up to $50 million worth of external counsel in support of the agency’s day-to-day needs.

Lastly, the management of national labs (NLs) from DOE headquarters is becoming significantly harder. As seasoned program managers leave, DOE is losing the deep institutional knowledge necessary to manage the Government-Managed Laboratory Complex and to execute core functions, especially the allocation and oversight of funds that Congress intends for the labs. The flow of funds requires experienced staff who understand authorizing statutes, lab agreements, and budget execution mechanics; losing them creates the risk of both bottlenecks and misalignment.

Reorganization

In November 2025, DOE leaders announced a sweeping reorganization that eliminated, consolidated, and rebranded major program offices while creating several new ones, formalizing a significant shift in the Department’s priorities (see Figures 1 and 2).7 Several of DOE’s most recognizable clean energy innovation and deployment offices — including EERE, OCED, SCEP, the Grid Deployment Office (GDO), and the Office of Manufacturing and Energy Supply Chains (MESC) — were dissolved as standalone entities. Their programs were redistributed across a new set of divisions organized around broad technology themes rather than the previous approach of differentiating between developmental stages (i.e. R&D vs. demonstration and deployment).

Figure 1. DOE organization chart prior to November 20th, 2025 (Source: DOE).

Figure 2. DOE’s new organizational structure after November 20th, 2025 (Source: DOE)

As part of this shift, DOE created or elevated new offices focused on emerging priorities. A new Office of Critical Minerals and Energy Innovation now centralizes critical minerals programs, which were previously spread across EERE, FE, and MESC, while also seeming to be a catch-all office for remaining EERE, OCED, MESC, and SCEP programs. A Hydrocarbons and Geothermal Office merges FE with the Geothermal Technologies Office. The reorganization also expanded the department’s work on emerging technologies by splintering off programs that used to be contained within the Office of Science: pairing AI and quantum programs into a new office and creating a dedicated fusion office with a more prominent role than before.

These changes significantly alter DOE’s internal map. Programs that once lived together are now split apart, while other functions have been consolidated under new leadership structures. The result is a department whose mission areas are organized very differently than they were even a few months ago, leaving open questions about how core clean energy, deployment, and innovation functions will be staffed and managed going forward.

Though previous administrations, including the Biden administration, have conducted reorganizations of DOE in the past, this reorganization was implemented with significantly less transparency. As of late December, the brief initial announcement and new organization chart are the only information the public has received on the reorganization. DOE’s website is currently inaccessible. Career staff have reported that they still lack clarity as to how their chains-of-command will be affected and whether or not the programs they work on will continue or change. 

These structural changes are unfolding at the same time DOE is experiencing substantial workforce losses, which heightens uncertainty about staff capacity. It remains unclear how remaining staff are being reassigned within the new organizational chart. With offices being renamed or re-scoped — and in many cases merged, split, or relocated — advocacy and stakeholder communities cannot easily determine whether DOE retains the necessary expertise or institutional knowledge to carry out ongoing work. 

Basic information like program areas and suboffices within each office, program leadership, and staffing data is now outdated, making it difficult to track where core functions have moved. Managing this transition is essential for retaining remaining staff and preventing further loss of expertise. DOE leaders must clearly communicate roles, reporting lines, and program continuity to restore internal morale and ensure the agency can continue driving energy innovation and promoting energy abundance amid an unprecedented U.S. energy affordability crisis.

This uncertainty underscores the need for greater transparency from DOE. Providing updated information on each new office’s missions and internal structure, staffing data, and explanations of how programs map onto the new structure would help rebuild trust and give stakeholders a clearer understanding of the agency’s operational capacity. Without this information, questions about DOE’s ability to execute its mission will persist at precisely the time when federal leadership on clean energy, innovation, and energy affordability is most needed.

Acknowledgements

The authors would like to thank Megan Husted and Arjun Krishnaswami for their pivotal roles in shaping the vision for this project, planning and executing the convenings that informed this report, and providing insightful feedback throughout the entire process. The authors would also like to thank Kelly Fleming for her leadership of the project team while she was at FAS. Additional gratitude goes to Colin Cunliff, Keith Boyea, Kyle Winslow, and all the other individuals and organizations who helped inform this report through participating in workshops and interviews and reviewing an earlier draft.

Appendix: DOE Staff Data

Barriers to Building: A Framework for the Next Era of Electricity Policy

The American power grid in 2025 faces a set of challenges unlike any in recent memory. The United States is deploying clean energy far too slowly to meet load growth, avoid spikes in electricity prices, and combat climate change. To get within striking distance of the Paris climate goals and plan for the lowest electricity costs, we must build 70 to 125 gigawatts of clean energy per year, much higher than the record 50 gigawatts built in 2024. 

Grid upgrades, too, are proceeding far too slowly. To meet growing electricity demand and integrate new clean power at lowest cost, transmission capacity must more than double within regions and increase more than four-fold between regions by 2035. But large transmission projects frequently take 7 to 15 years from initial planning to in-service operation and only 322 miles of new high-voltage transmission lines were completed in 2024—the third slowest year of new construction in the last 15 years.

Even before the One Big Beautiful Bill Act (OBBBA) gutted federal clean energy incentives, non-cost challenges like uncertain and lengthy interconnection and siting processes, local restrictions on development, and supply chain bottlenecks led to lower levels of clean energy deployment than projected and slowed down grid upgrades. Now, clean energy and transmission face additional cost and financing barriers from Congressional rollbacks and permitting restrictions from the Trump Administration.

Past federal and state clean energy policies, including the Inflation Reduction Act (IRA) and the Bipartisan Infrastructure Law (BIL) as well as state renewable portfolio standards, have leaned heavily on financial incentives to drive deployment and incentivize grid upgrades and expansion. These incentives successfully attracted massive investment in clean energy projects, but they largely did not grapple with non-cost challenges—like siting restrictions—to building projects.

Political challenges have made it difficult to pass, implement, and defend clean energy policies. A mismatch between public needs, government programs, and industry incentives has led to unsatisfactory outcomes and degraded public trust in the government. 

Now, policymakers, industry, and the advocacy community are paying more attention to non-financial issues that can impede deployment, like siting and permitting. The abundance movement, for example, has identified two causes of America’s building problem: ineffective government programs and burdensome permitting processes. This diagnosis is incomplete. Getting to a world where we can build things quickly and make government work will require us to identify the full suite of problems, not just these convenient two. 

To maximize clean energy deployment, we must address the project development barriers that slow down investment and construction. And to build more durable and effective energy policies, we must interrogate and address the political barriers that have held us back from smart policymaking and implementation that can withstand political change. Overcoming these challenges is necessary to address the climate crisis, rein in rising utility bills, and ensure that government can deliver on its energy promises to the public it serves. 

In early 2025, the Federation of American Scientists (FAS) set out to identify and categorize these barriers through research and interviews with experts and practitioners. Following this research, at the 2025 Climate Week NYC, FAS convened a group of researchers, advocates, industry leaders, and policymakers to solicit feedback on this framework. 

The outcome of that convening allowed us to ground-truth the following report—which we intend to use as a rubric for state-level electricity policies and efforts to rethink federal energy policy. We should ask: to what extent do new policies under consideration reduce the major barriers to building clean energy and transmission while addressing the shortcomings that have made past policy less durable? 

A future paper will detail the priority solutions that make progress on each of the project development barriers while improving our toolkit to overcome the political barriers that impede durable policy.

Contents

Jump to chapter
Interconnection
Siting & Permitting
Misaligned Incentives
Financing
Grid Planning
Supply Chains
Jump to chapter
Energy Affordability
Incumbent Interests
Delayed Impact
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Project Development Barriers: Making it Harder to Build

Clean energy technologies are mature and cost competitive, if not least cost, across the country. Yet we are not building clean energy as fast as necessary, and in many places we are building new gas plants instead, raising costs for customers and intensifying the climate crisis. This trend is the result of several barriers that make it more difficult to build clean energy. 

The Barrier

The interconnection process is one of the most significant constraints on clean energy deployment in the United States. At the end of 2023, nearly 2,600 gigawatts (GW) of generation and storage were queued, which is more than double the U.S. installed capacity (~1,280 GW). Today’s grid was built around a small number of large, centralized fossil fuel plants; the grid must now accommodate thousands of diverse, geographically distributed projects. Processes that were designed for a handful of large plants per year are now evaluating orders of magnitude more proposals, each with more complex grid interactions. These processes are not able to adequately handle the current grid, nor have they kept pace with development in grid planning and analysis tools. The result is a massive backlog of projects waiting to interconnect to the grid and a review system that is fundamentally misaligned with the scale and pace of the energy transition. 

Developer experience confirms that interconnection challenges rank among the most decisive barriers to clean energy buildout. In the 2024 Lawrence Berkeley National Laboratory (LBNL) developer survey, respondents ranked interconnection delays and network upgrade costs higher than permitting, supply chain constraints, or workforce shortages as reasons for project cancellations or deferrals. Many projects face cost uncertainty on the order of tens to hundreds of millions of dollars as interconnection studies shift responsibility for broad system upgrades onto single developers. Interconnection costs are rising, and it is difficult for developers to predict what their interconnection bill will be at the end of the process. This unpredictability increases financing risk, reduces developer participation, and leads to large-scale attrition. 

Outdated processes for evaluating and approving new projects have led to enormous project delays, averaging 4-5 years from request to commercial operation. This delay has raised prices and led some grid operators to keep old, expensive coal plants online in lieu of new capacity. Both of these trends benefit incumbent transmission and generation companies, who have significant decision-making power over the entities that control interconnection, making it difficult to update the processes. Clean energy projects also face higher interconnection costs than gas projects because they are more likely to need transmission upgrades to connect to the grid, which increases the chances of project cancellation.

These barriers have direct system-wide consequences. Only about 15 to 20 percent of projects that enter the queue ultimately reach commercial operation, meaning most of the clean energy capacity counted as “planned” will not materialize unless interconnection processes are reformed.  Long queue timelines and uncertainty also make it more difficult to finance projects. The result is slower emissions reductions, delayed IRA-driven investment and job creation, and higher costs for consumers as operators extend the life of aging coal and gas resources to meet growing load. 

The Past Playbook

Federal interconnection policy has largely gone through the Federal Energy Regulatory Commission (FERC). In 2023, FERC issued Order 2023, which made significant changes intended to speed up interconnection and increase certainty for new projects. The rule (1) replaced outdated serial studies, in which operators study projects one by one as their applications come in, with cluster studies, in which operators study projects in batches, (2) required grid operators to speed up study timelines and imposed penalties for failing to meet deadlines, and (3) directed grid operators to update rules to reflect technological advancements, like grid-enhancing technologies and hybrid solar-plus-storage projects. Some grid operators have gone further than Order 2023 to improve interconnection processes, and some states have pushed grid operators for more ambitious reform. In addition to FERC rules, the federal government has also provided limited resources to grid operators to improve interconnection processes. 

To date, federal efforts have largely fallen short of what’s necessary to reform interconnection processes to enable adequate buildout of clean energy, and in most places states have limited tools. For one, FERC rules rely on effective implementation from grid operators, which has been a mixed bag. Order 2023 also strayed from making more fundamental changes to the interconnection process, like fixed entry fees that provide certainty to developers or proactive modeling and transparency of information to allow projects to connect quickly in places with transmission headroom. It fully does not address the fundamental problem that rising, variable interconnection costs are killing projects. The federal government has limited resources to support grid operators through, for example, funding for increased staffing or new technology to automate studies. 

Where Do We Go From Here?

The next era of energy policy must radically transform the way we connect projects to the grid to enable faster, greater deployment of clean energy, including through an expanded role for federal and state governments. Policy must shorten study timelines using automation and other new technology, enable smarter planning with proactive modeling and greater transparency for developers, increase upfront cost certainty, and reduce the amount that projects end up paying for interconnection. And in addition, the next playbook must address governance and decision-making structures that favor incumbents who benefit from a congested grid. 

The Barrier

Siting and permitting processes have become two of the most visible friction points in the clean energy buildout. While federal policy receives the most attention, most clean energy siting and permitting decisions are made at the state and local level, where zoning boards, planning commissions, county supervisors, and community members have significant influence over whether a project proceeds. In many states, local jurisdictions have adopted new ordinances that restrict or outright ban wind, solar, and transmission development. According to recent analyses, roughly one-fifth of U.S. counties now have formal restrictions on clean energy, and many more are considering them. Even in states with strong climate and clean energy targets, municipal-level land use rules can effectively halt projects that align with statewide goals.

These local barriers are often rooted in concerns about landscape change, perceived impacts on property values, agricultural land use, wildlife, or community identity. But they are also a reflection of who benefits and who bears the immediate impacts of clean energy development. Benefits like lower system-wide electricity prices, cleaner air, and national decarbonization progress tend to be distributed widely, while the visual and land-use impacts are concentrated locally. Developers may not readily have the resources to meet community needs to come to agreement on projects, and federal and state governments often do not have adequate resources to support community benefits. Misinformation and disinformation—spread by incumbent interests who stand to lose money with greater clean energy or transmission deployment—also seed opposition in communities.

Permitting requirements add an additional layer of delay and uncertainty. Most clean energy projects, particularly solar and storage projects—which make up the bulk of new planned capacity—rarely trigger major federal environmental statutes and primarily deal with state-level permitting. Developers must navigate state statutes governing clean water, conservation, and environmental impacts, which serve important purposes but are often still implemented through outdated processes (e.g., many states still require paper permits; in Arizona, digitization reduced timelines for one permit process by 91 percent) administered by understaffed agencies. Projects such as transmission lines, offshore wind facilities, pumped storage hydropower, nuclear plants, geothermal projects, and any project on federal land or receiving federal grants generally must also navigate federal permitting processes. When new projects trigger federal review, they must comply with the National Environmental Policy Act (NEPA) and sometimes other federal permitting statutes, like the Marine Mammal Protection Act, the National Historic Preservation Act, and the Endangered Species Act. These reviews can take multiple years, particularly when agencies have limited staffing or when studies must coordinate across several state and federal entities and jurisdictions. 

Delays from local siting and state and federal permitting translate directly into cost escalation and canceled projects. Developers report that siting challenges can add years to development schedules and millions of dollars in carrying costs before a shovel ever hits the ground. For technologies like wind and solar, where the business model depends on tight capital cost margins, extended pre-construction periods can be the difference between a viable project and one that never breaks ground. Transmission development is even more exposed: large lines can spend a decade or more navigating route identification, landowner negotiations, environmental review, and litigation. Without new transmission capacity, interconnection backlogs grow, power costs increase, and states are forced to rely on older fossil resources simply because they are already in place.

Yet, the challenge isn’t so simple. It is not simply “local opposition” or “slow permitting.” It is that the scale of clean energy land use today is fundamentally different from the past century of centralized fossil energy development. We are building more projects, in more places, at a pace that communities have not previously experienced.

The Past Playbook

Siting and permitting reforms have increasingly been part of the federal and state policy agenda. Reforms have largely focused on process changes and improving coordination across agencies, with some focus on building capacity for analysis and review in some federal agencies and states. In general, these reforms are insufficient and not widespread enough to match the urgency and scale of the U.S. energy transition. 

The federal government has pursued a range of reforms over the past few years to improve the permitting process for projects that involve federal land, funding, or regulatory triggers. Key cross-agency initiatives include the Coordinated Interagency Transmission Authorizations and Permits Program, which made the Department of Energy (DOE) the lead agency for coordinating environmental review and permitting for transmission lines, and FAST-41, which aims to align multiple agency reviews and reduce duplicative permitting processes. Agencies have taken additional steps to improve individual permitting processes. For example, the Bureau of Land Management (BLM) designated solar and wind energy zones on public lands to reduce conflicts and expedite approvals, and the Bureau of Ocean Energy Management modernized offshore wind leasing and programmatic NEPA reviews (although the Trump Administration overhauled these reforms by halting all offshore wind leasing). 

Several states have attempted to reduce delays and uncertainty by centralizing siting authority and standardizing permitting rules. For example, New York’s Office of Renewable Siting and Massachusetts’ Energy Facilities Siting Board can override local opposition for large projects, while other states provide model ordinances to guide counties on setbacks, noise, and environmental protection. DOE has also helped states: the agency provided a small amount of technical assistance to states to help local governments with planning, siting, and permitting decisions and a larger tranche of funding for transmission projects to provide benefits to local communities to help with siting and community buy-in. In some places, these reforms have improved consistency across counties and reduced the influence of NIMBY-driven delays.

This playbook, while directionally correct, has fallen short of what is necessary. Local restrictions on clean energy continue to proliferate, siting power plants and large transmission lines remains a major challenge, and many state and federal permitting processes still pose significant barriers. Existing efforts have several gaps: (1) many states have not addressed local restrictions on development, (2) process improvements, especially at the state level, have happened in a piecemeal fashion and have not extended to the full suite of state-level permitting requirements, (3) existing efforts often do not cover the full set of solutions (e.g., broken permitting for customer-owned solar is a huge impediment that keeps U.S. solar costs much higher than other countries), (4) governments and developers have insufficient tools to ensure that local communities get what they want out of projects, and (5) efforts to increase state and federal government capacity (i.e., hiring and training the right staff and increasing analytical capabilities) have fallen far short of what is needed to have a fast, effective, and responsible permitting and siting process. 

Where Do We Go From Here?

The next era of energy policy must wrestle with the fundamental siting and permitting challenges and introduce new frameworks for planning, permitting, and building projects. That means upfront planning to make major decisions about tradeoffs between clean energy, water, conservation, and other goals, expanding the tools and resources necessary to ensure that local communities benefit from projects, dramatically improving government capacity to do siting and permitting well, and taking a holistic approach across federal, state, and local governments to prevent new bottlenecks from emerging. 

The Barrier

Most clean energy and grid upgrade projects are financed by private capital and procured or built by companies, either utilities or independent power producers. The profit motives of those financiers and companies determines the solutions they invest in, within the bounds of policy requirements. Across states and regions, outdated utility regulations and market designs have created flawed incentives that have limited investment in some necessary solutions and resulted in overinvestment in others. Utilities have wielded significant political power, built by lobbying with ratepayer money, to maintain today’s incentive structure. 

For example, in vertically integrated states, utilities are incentivized to prioritize capital expenditures that earn them the highest returns, within the bounds of commission approval. This incentive structure deprioritizes solutions like increasing imports of clean energy through new transmission and leveraging distributed resources like customer-owned solar. 

Most commissions are often not well-equipped or willing to ensure that utilities pursue the full toolkit. In most states, utility planning is driven by the utilities, who conduct detailed analysis and provide proposals on planning and ratemaking to their commissions. Commissions have more limited capacity to conduct analysis and interrogate utility proposals. 

Organized markets also have flawed incentive structures. For example, incentive structures in organized markets were generally designed around an electricity grid made up of a small number of large power plants. As a result, market rules and incentive structures provide limited to no support for distributed energy resources, which makes it harder to finance these projects. Governance structures exacerbate this issue. In some organized markets, incumbent generators have significant decision-making power in important determinants of clean energy deployment, including interconnection and transmission planning. Some organized markets have maintained rules that make it difficult to connect new power plants.

Misaligned incentives reduce the effectiveness of other policy solutions. For example, tax credits to reduce the cost of clean energy projects are most effective if utility companies have a profit incentive to build those projects instead of other generation types. The effectiveness of bulk transmission grant programs is limited by the willingness of utility companies to collaborate on projects. 

The Past Playbook

Federal policy has largely ignored utility incentive structures and instead attempted to influence private-sector behavior by working within existing incentive structures (e.g., by making it easier for utility companies to use tax credits to build clean energy). Federal agencies have attempted to overcome misaligned incentives through regulations (e.g., pollution standards on power plants that require generation owners to make changes). Some efforts to change incentives structures (e.g., the Clean Electricity Payment Program included in the 2021 Build Back Better Bill) have gained momentum but failed to pass. 

Many states have also used tools that operate within existing incentive structures, like renewable portfolio standards that require utilities to procure an increasing share of their electricity from clean sources. States have attempted to change incentive structures to varying extents. More than 15 states have adopted some form of performance-based ratemaking to align utility incentives with desired outcomes. However, these efforts vary in how comprehensively they have changed the dominant incentives for companies. 

Where Do We Go From Here?

The next era of energy policy must reform incentives to realign private sector interests with public benefit, including affordable bills, reliability, and decarbonization. To achieve the scale, speed, and depth of transformation needed to address the challenges facing our grid, policy must address misaligned incentives for distribution utilities, generation owners, and integrated utilities in different regulatory contexts. That requires a greater focus on realigning incentive structures at the state and regional level (through organized market reform) as well as creative federal tools to directly change incentives or help states and organized markets to do so. Increasing regulator scrutiny of utilities and bolstering capacity at commissions must also play a larger role moving forward to ensure that utilities are focusing on the best solutions, not just what is most profitable. Greater use of publicly owned or publicly financed projects can also ensure investment in solutions that are underutilized by private companies. 

The Barrier

The federal government has created new financial barriers for clean energy projects.  OBBBA’s changes to tax incentives and increased regulatory and permitting uncertainty make clean energy projects more expensive and harder to finance. Macroeconomic changes like persistent inflation and other uncertainty, including on tariffs and interest rates, have also affected investment. 

While the clean energy industry has continued to move forward (2025 investment in solar, storage, and wind is similar to 2024 levels, and the industry is benefiting from demand growth, as many projects are able to find offtakers like tech companies willing to pay higher prices), the full effects of federal policy changes are likely delayed, as the tax credits have not fully expired. Moving forward, financing may become a larger barrier. In addition, rising utility bills have opened a conversation about the cost of private finance for grid projects and whether there are alternative approaches that come with lower costs for customers. 

Financing less mature clean energy technologies, like advanced nuclear, enhanced geothermal, and aggregated distributed generation (i.e., virtual power plants), remains a major issue. 

The Past Playbook

Financial support has played a dominant role in the federal energy policy playbook. Tax incentives, which were dramatically expanded by the IRA and pared down by OBBBA, have been central to energy policy for decades. Grant and loan programs, also dramatically expanded by the IRA, have also been a core driver of clean energy deployment, grid upgrades, and large-scale demonstrations and commercialization of advanced energy technologies. States have also used tax incentives, grant programs, and green banks to finance and incentivize clean energy and grid projects. This model has largely been successful at deploying mature technologies like wind, solar, and storage, but it has fallen short when it comes to commercializing some newer clean energy technologies. Gaps also remain in financial support for projects that struggle to get private capital.  

Where Do We Go From Here?

Financing and financial support should continue to be a major pillar of clean energy policy. The next era must incorporate a broader, more diverse set of financing tools in the capital stack, including state-led public financing for more types of projects and state efforts to create demand certainty for clean energy by leveraging procurement and working with corporate buyers. 

The Barrier

Today, the U.S. bulk transmission system faces significant constraints that limit where new clean energy projects can be built and threaten reliability. Congestion already causes curtailment of low-cost low-carbon power, higher consumer electricity prices, and dampened investment in clean energy. Many regions with abundant clean energy resources simply do not have enough high-voltage transmission capacity to deliver that power to population centers. As a result, developers are increasingly unable to move generation projects forward even when siting, permitting, financing, and interconnection queue positions are in place. 

These challenges stem in large part from fragmented and inadequate planning processes. Coordinated planning is essential to ensure that transmission is expanded in the right places and that new clean energy investments flow to areas with sufficient transmission capacity. Despite the need for coordination, the United States conducts virtually no interregional transmission planning, and regional planning has been lacking in many regions. The result is piecemeal grid planning, as transmission providers and developers focus on smaller lines which meet near-term needs and are profitable within their own footprint. Planning for these smaller lines is easier as fewer parties are involved. Where we have successfully built larger regional lines, they are the result of transmission providers conducting robust planning processes. And because no unified authority or planning framework exists to shepherd large, high-impact projects across regions, the U.S. has built essentially zero major interregional transmission lines in recent history.

Lack of coordination between transmission and generation planning also creates inefficiencies and prevents smart development. In deregulated markets (and some vertically integrated states), transmission and generation planning processes occur largely in isolation without systematic processes to align long-term clean energy expansion with major grid upgrades. 

Together, these gaps make expanding the transmission system an inefficient process at best, and an unworkable process at worst, at precisely the moment when the need for additional capacity is growing most rapidly. 

The Past Playbook

Policymakers have made progress in addressing transmission planning bottlenecks, but these reforms remain far short of what’s needed. FERC Order 1920 is the most significant recent step: it requires long-term, forward-looking, multi-value regional planning. It was designed to improve transparency in the planning stages and help regions identify beneficial projects earlier. Yet the rule stops at regional borders and thereby doesn’t meaningfully advance interregional planning. 

A patchwork of state and regional efforts has emerged alongside federal reforms. New Mexico created a new entity called the Renewable Energy Transmission Authority to map and finance new lines. Similarly, Colorado created the Colorado Electric Transmission Authority to plan and develop transmission lines to meet power needs, unlock clean energy, and lower costs. California conducts long-term transmission planning intended to incorporate transmission needs to accommodate clean energy deployment required to meet the state’s climate goals. Federal tools like National Interest Electric Transmission Corridors (NIETCs) were designed to accelerate siting of critically important lines, and part of DOE’s Grid Resilience and Innovation Partnerships (GRIP) funding has helped bring utilities, states, and developers together to plan large projects. On the interregional front, DOE has conducted analysis to demonstrate where new capacity would create the greatest benefits and inform planning.

These efforts certainly make progress and will likely result in expansion of local and regional transmission capacity. The magnitude of progress will depend in large part on how transmission providers implement Order 1920—for most regions, compliance filings will be submitted this month (December 2025) or by June 2026. 

However, this playbook had significant gaps and pitfalls. Lack of interregional planning is the most glaring gap, but other tools had limitations, too. GRIP had limited funding and power to solve cost allocation disputes. NIETCs did not translate into built infrastructure. In many places transmission planning will not take into account the long-term clean energy expansion required for deep decarbonization, leaving high-value opportunities—like pairing wind resources with long-distance transmission—unrealized. The result is a set of reforms that move in the right direction but still fall short. 

Where Do We Go From Here?

The next era of energy policy must tackle interregional planning, while following through on Order 1920 with effective implementation. We must require transmission providers to plan decisively for futures with significant load growth and levels of clean energy deployment necessary for deep decarbonization. Future federal policy must also expand the government’s tools to bring parties to the table for smart, effective planning. In parallel, states should continue to use creative policies, like Colorado and New Mexico’s transmission authorities, to strategically plan new transmission lines to maximize benefits. And the next era must also include national, forward-looking land-use planning for clean energy deployment, in sync with transmission planning. 

The Barrier

Grid components, such as electrical steel and transformers, are necessary to increase grid capacity to support additional generation and load. However, grid component supply chains are still suffering from disruptions caused by the COVID-19 pandemic and lack of domestic manufacturing capacity. The rising demand for grid components and battery technology have further stressed supply chains, drawing out lead times and increasing prices. For example, across transmission and distribution equipment, the lead time for components averaged 38 weeks in 2023, nearly double from the year prior, with costs escalating nearly 30 percent year-over-year. Bottlenecks in the supply chains from upstream suppliers to manufacturers among these components risk power system stability, the ability to deploy clean energy, and the ability to build new industrial production and technology facilities at scale. 

The Past Playbook

Federal policy has increasingly focused on building secure supply chains for clean energy technologies. The IRA included tax credits, grant programs, and loan authority to build out domestic supply chains for clean energy and storage technologies. The federal government has also used demand-side pressure to bolster supply chains (e.g., through a bonus tax incentive for clean energy projects that use domestic content and Build America Buy America requirements on federal grant programs). These policies led to major investment in domestic supply chains. 

This playbook was quite successful at building out domestic supply chains for some industries, but it had major gaps. For example, the IRA and BIL included no dedicated support for grid components, and the minimal support that was embedded in larger programs was insufficient. Federal demand-side programs were structured as incentives for downstream industries to use domestic content, but this design had too much uncertainty to sufficiently derisk upstream domestic supply chains.  

Today’s programs have also struggled to respond quickly when conditions change. For example, the federal government had limited tools with which to respond when the utility industry faced a debilitating shortage of large power transformers or when it became clear that incentives were not large enough to drive domestic investment for some clean energy components. 

Where Do We Go From Here?

The next era of energy policy must build on the same financial tools to support secure supply chains that enable clean energy deployment and grid upgrades. The playbook must include policies that more directly create demand for domestic components to provide certainty for manufacturers and derisk new investments. Future policy must also provide more flexible and dynamic tools to rapidly address supply chain shortages as they arise. 

Political Barriers: Making it Harder to Pass, Implement, and Defend Policy

Clean energy advocates have focused on economic competitiveness, climate, and public health benefits as the winning messages to support and defend policies. The BIL and IRA came out of this model, and the architects of those policies hoped that the industry that benefitted from these policies would step up to defend them. While this strategy has enabled passage of significant new policies, it has failed to withstand changing political dynamics. The swift rollback of major parts of BIL and IRA is the prime example. Our ability to successfully implement and defend clean energy policies—and make further progress—has been hampered by several key political barriers. The next era of clean energy policy must address these barriers to be successful. 

The Barrier

Rapidly rising utility bills have become an urgent cost-of-living issue. People pay 13 percent more for electricity in 2025 than they did in 2022, and nearly 40 percent of households sometimes have to choose between paying for food and medicine or keeping the lights on. 

Rising electricity prices are a political barrier to some clean energy policies. For example, states have struggled to follow through on procurement of advanced clean energy technologies like nuclear and offshore wind as prices have risen. New York recently cancelled a planned transmission line, using affordability as a justification. Clean energy opponents are using prices to oppose climate policies, even though deployment of wind and solar has generally reduced rates. Concerns about electricity affordability make it difficult to justify major grid infrastructure investments under current regulatory and ratemaking structures, as additional spending to update the grid will lead to near-term bill increases. High prices also make it difficult to replace direct fossil fuel use in vehicles, buildings, and factories with electricity. 

The Past Playbook

Federal energy policy has largely dealt with affordability in two ways. 

First, the federal government has provided important but limited direct assistance to struggling households through the Low-Income Home Energy Assistance Program, which helps households pay for energy, and the Weatherization Assistance Program, which funds energy- and cost-saving home improvements. However, these programs are significantly underfunded and oversubscribed—many households that need support do not get it.

Second, federal financial support results in long-term savings. IRA incentives for low-cost clean energy were projected to reduce generation costs, which in the long term translates to lower prices. Tax incentives and grant programs for distributed energy resources and home energy improvements save energy and costs for customers that make upgrades. However, this approach falls short in two ways: (1) it does not address the root causes of rising electricity bills, which means bills will continue to rise, and (2) the benefits are long term and do not show up on peoples’ bills on politically relevant timelines. 

Where Do We Go From Here?

The next era of energy policy must provide sufficient and swift relief for customers that are on the edge of catastrophe due to rising costs, make it easier to deploy cheap, clean energy to reduce generation costs, and target the root causes of high and rising bills to unlock a sustainable utility ratemaking regime that allows for major new investments in the grid without harming regular people. The new playbook must also include more effective cross-sector tools to cut total system and household costs, including by transferring planned spending on gas infrastructure to home electrification and grid upgrades where possible. 

The Barrier

Many solutions, including adding new generation in organized markets, relying more on regional and interregional transmission, and deploying distributed and demand-side solutions, threaten the profits of incumbent interests under current market and regulatory structures. For example, utilities make money through a return on qualified capital investments in things like power plants and distribution infrastructure. Increasing bulk transmission capacity to connect the Southeast with other regions would lead to more imports of lower cost clean energy, which would reduce the utilities’ reliance on local generation. That makes it harder for the utilities to justify capital expenditures in new power plants, which is how the utilities make a profit, so new transmission poses a threat to the business model. As a result, Southeastern utilities are opposed to policies that would expand bulk transmission to better connect different regions, even though these policies would reduce costs and increase reliability. These dynamics make it politically difficult to pursue policies that expand transmission capacity.

The Past Playbook

Federal clean energy policy has largely avoided changing incumbent incentive structures or decision-making processes at the state and regional level. Instead, policymakers have used financial incentives to bring incumbents to the table and increase their investment in clean energy and grid upgrades. As a result, the misaligned incentives described above, combined with decision-making structures that reward incumbents over innovation, make it difficult to fully address the barriers to clean energy deployment and grid upgrades at the necessary scale. 

Where Do We Go From Here?

The next era of clean energy policy must address governance issues through reform of regional grid operators and public utility commissions. Strengthening the role of regulators is critical to reining in incumbent interests where they do not align with public benefit. It must also realign industry incentives (e.g., through performance-based ratemaking) where possible with affordability and decarbonization goals. 

The Barrier

Another major political barrier is the lengthy time it takes to get from enactment and implementation to tangible benefits for people. Transforming major sectors of the economy is a time-intensive, multi-stage project, and climate advocates have accordingly focused on long-term goals, such as 100 percent clean electricity by 2035 or net-zero emissions by 2050. The IRA and BIL were made up primarily of multi-year (even some decadal) programs to drive major changes in the economy. As a result, the largest benefits were projected to come in the late 2020s and early 2030s, far outside the window of political memory. That mismatch makes it difficult for the public to understand the point of policies and in turn makes those policies hard to defend. 

Where policies do have near-term benefits, those benefits have often been delayed by the implementation process. Successfully shifting the private sector requires precise policy and new programs, which take time to implement. Implementation of new programs can also run up against the government typically works, and that friction causes delays. Implementation delays make it difficult to connect the dots between policy and tangible improvements to peoples’ lives.

The Past Playbook

Policymakers have used three dominant approaches to overcoming this barrier. First, they tout near-term signs of economic change. For example, the Biden administration consistently cited private-sector investment in clean energy as a key metric to convince the public that the IRA and BIL were driving benefits for people. Second, they rely on the quickest economic changes to demonstrate impact. For example, the IRA and BIL drove a near-term increase in construction jobs. Real and announced job creation was the dominant message to support and defend these policies. Third, they cite projected benefits. For example, the Biden administration frequently cited the 1.5 million jobs and the $27 to $33 billion in energy cost savings that the IRA was projected to drive. 

Attention to long-term impact is important for addressing long-term problems like climate change and load growth. However, politics runs on instant gratification. As of late 2024, only 39 percent of Americans had heard of the IRA. And federal energy policy failed to make a near-term dent in the issue that was most visible for people: utility bills. 

Where Do We Go From Here?

The next era of clean energy policy must tangibly and visibly benefit people in the short term. The playbook must include a better balance of policies geared toward long-term transformation of the economy and policies focused on pressing issues for regular people. That means including programs that are designed for quick implementation and real-world change. 

Conclusion: What’s Next?

The power sector sits at an inflection point. The challenges facing the grid are immediate, interconnected, and solvable but only if we confront the real sources of delay and dysfunction. Accelerating clean energy deployment requires moving beyond our old playbook—dominated by financial incentives and regulations that see-saw based on the political winds—toward a new approach that addresses both project development barriers that slow investment and construction and political barriers that impede durable policymaking. Building durable, effective energy policy demands a clear-eyed assessment of the barriers that have undermined smart policymaking and implementation.

In a forthcoming publication, we will move from diagnosis to action, detailing policy solutions that can unlock faster, more reliable project development while expanding the policy toolkit needed to overcome the political barriers that have prevented durable reform. Together, these solutions aim to strengthen grid reliability, rein in rising utility bills, and put the United States back on a credible path to decarbonization. These stakes could not be higher, and the opportunity to build a more affordable, resilient, and clean energy system has never been more urgent. 

New DOE Re-Organization Raises Uncertainty for American Science, Energy Innovation, and Affordability

Last week, the U.S. Department of Energy (DOE) unveiled a sweeping reorganization aimed at “strengthening efficiency and unleashing American energy dominance.” While these ambitions sound bold — accelerating technology, expanding energy production, and cutting bureaucracy — the structural changes inspire more questions than confidence. The new alignment signals a clear shift in priorities: offices dedicated to clean energy and energy efficiency have been renamed, consolidated, or eliminated, while new divisions elevate hydrocarbons, fusion, and a combined Office of AI & Quantum. In total, nine offices with mission-critical responsibilities have been dismantled as part of the restructuring, implementing much of the restructuring proposal outlined in Project 2025 and fundamentally reshaping the agency’s role in advancing clean energy and innovation.

This realignment comes on the heels of nearly a year of capacity cuts that have already strained the agency. Several thousand members of the DOE workforce have departed amid this administration’s DOGE-driven efforts, leaving critical functions understaffed, institutional knowledge depleted, and staff morale undermined. The erosion of large-scale demonstration and deployment capacity, and the structures that supported it, raises serious concerns about DOE’s ability to drive energy innovation at scale and implement real-world infrastructure upgrades. At the same time, sectors that rely on DOE’s support are witnessing a general loss of capacity at the agency, eroding trust in government and its ability to deliver on its stated mission.

The financial and operational costs of restructuring a large federal agency can be staggering. Lost productivity alone often runs into the millions, as staff and leadership divert time and focus from mission-critical work toward the reorganization. In this context, DOE’s restructuring risks weakening — rather than strengthening — the American innovation engine responsible for advancing both basic science and demonstration and deployment at scale. Gutting DOE’s deployment, infrastructure, and clean energy programs also undermines the agency’s ability to carry out the critical functions needed to address today’s most pressing energy challenges, as electricity demand continues to outpace supply and utility bills rise rapidly. 

Looking ahead, this reorganization poses important long-term questions: how would one rebuild the structures necessary for large-scale demonstration and deployment? How can DOE rapidly respond to growing domestic energy challenges amid reduced capacity? And how can the agency restore staff morale, retain institutional knowledge, and rebuild trust with the sectors that rely on its leadership? Far from delivering efficiency or strength, this reorganization risks institutionalizing the losses and instability at DOE that have already been set in motion.

Clean Energy Innovation & Deployment Impacts

The reorganization dramatically reshapes offices responsible for clean energy innovation and deployment. At a time when electricity prices are rising, demand growth is outpacing new supply, and grid infrastructure is aging, stepping away from applied innovation and deployment programs is a costly mistake that threatens affordability and reliability.

Most notably, the reorganization creates a new Office of Critical Minerals & Energy Innovation, with significant breadth and responsibility and a direct line of report to the Secretary. The Office of Energy Efficiency and Renewable Energy (EERE), which among other things manages DOE’s work to make it easier to build new renewable energy projects and improve U.S. industry, will now mostly be consolidated under this office. The new office’s name signals a potential deprioritization of energy innovation behind critical minerals priorities. It also raises questions: how will renewable energy, manufacturing, industrial, and built environment programs — all essential to energy affordability — be integrated and staffed? How will existing programs under EERE and other offices be reorganized within this sprawling new structure? Will applied innovation and deployment functions, like supporting states with improved siting and permitting of new power plants, continue to exist?

For critical minerals, consolidating work previously scattered across FE, EERE, and MESC may improve program coordination and definitely elevates this important issue. The office reports directly to the Secretary and Deputy Secretary, reflecting a top-down, highly centralized approach to managing critical minerals programs. However, there is no dedicated funding line for critical minerals, raising questions about how funding will be pieced together for this office and long-term program sustainability. 

This new restructure also eliminates the offices of Clean Energy Demonstrations (OCED), Grid Deployment (GDO), Manufacturing and Energy Supply Chains, the Federal Energy Management Program (FEMP), Fossil Energy (FE), and State and Community Energy Programs (SCEP). While elements of these offices and their programs may wind up in the large new Office of Critical Minerals and Energy Innovation, shuttering these offices emphasizes a de-prioritization of their functions and missions by DOE leadership.

Additionally, to meet our urgent energy infrastructure challenges and ensure that innovations translate into real world impact, the US needs to be building large-scale demonstrations of the newest energy technologies domestically. The Office of Clean Energy Demonstrations (OCED) did just that. It supported first-of-a-kind or next-generation projects to de-risk technologies to enable quicker commercialization. This new organizational structure nearly fully guts any remaining demonstration and deployment apparatuses at DOE. 

On another technology front, consolidation of geothermal and fossil programs could be a good outcome for geothermal innovation. The reorg creates a new Hydrocarbons and Geothermal Office, which merges the Geothermal Technologies Office (GTO) with the Fossil Energy Office (FE). Previously, both GTO and FE were housed under the Office of the Under Secretary for Science and Innovation (S4); the new combined office will now report to the Office of the new Under Secretary for Energy (S3). One way to conceptualize this merger is as an “Office of Underground Resources,” which could be a logical alignment given the technical and operational overlap between geothermal and fossil energy programs. The restructuring may also provide an opportunity for geothermal to access additional funding streams that were previously less available. 

Impacts on Basic Science

The DOE reorganization introduces major shifts with significant implications for the agency’s basic science mission, particularly in fusion and quantum research. 

One notable change is the creation of a dedicated Fusion office under the Office of the Under Secretary for Science (S4), a move long advocated by industry. Pulling fusion out of the Office of Science (SC) may make sense at this stage: the field is transitioning into applied programs that require outcome-oriented management. Still, critical basic research needs remain — particularly around plasma-facing components like the blanket — which demand the scientific rigor and oversight traditionally provided by a science-focused office. Separating fusion from the broader SC could help reconcile the tension between applied and basic work, but execution will be key, particularly in light of DOE’s ongoing workforce reductions. Industry perspectives have been overwhelmingly positive, and former Fusion Energy Science staff reportedly also view the change favorably. Under the Office of Science, fusion increasingly had to compete with more fundamental research projects that push the boundaries of human knowledge, as opposed to energy technology.

By contrast, the creation of a combined Office of AI & Quantum raises deep concerns about both scientific coherence and organizational capacity. Quantum information science (QIS) is still largely in a foundational research phase, relying on robust support from the Advanced Scientific Computing Research (ASCR), Basic Energy Sciences (BES), High Energy Physics (HEP), and other programs in the Office of Science to build knowledge to eventually transfer technology into industry. If quantum information science and technology programs are pulled out of the Office of Science, it could risk destabilizing established programs that benefit from their close interaction with fundamental research activities while prematurely advancing commercial quantum solutions. 

Grouping quantum with AI — a technology already widely deployed and primarily application-driven — conflates fundamentally different stages of development, obscuring programmatic priorities and scientific needs. These structural choices are particularly risky given DOE’s (and particularly the Office of Science’s) massively depleted workforce, not to mention the enormous costs and operational challenges associated with large-scale federal reorganizations. Lost productivity and gaps in institutional knowledge could delay critical research, compromise collaboration across DOE-operated laboratories, and weaken the nation’s basic science enterprise at a moment when long-term investment in emerging technologies is most urgent.

Additional structural alignment concerns extend to offices like the Office of Technology Commercialization (OTC, formerly OTT), which spans both applied and basic domains but is more appropriately aligned with applied energy offices rather than SC. Conversely, the creation of OSTR is an interesting development: previously, functions such as liftoff reports and AI/data center analyses were handled in-house by specific program offices, and centralizing these functions could improve coordination if implemented effectively, but they could also limit the expertise and detail that made these reports valuable in the past.  Similar challenges exist as a result of the Department’s reorganization of its scientific advisory committees into a single entity earlier this year.

Exacerbating Staff Losses and Project Cancellations

To further complicate matters, the reorganization has been marked by limited communication with DOE staff, leaving many employees uncertain about how their roles and teams will be affected. Concerns about potential reductions in force have heightened anxiety among DOE staff, and a poor transition to the new organizational structure could drive additional staff to depart of their own accord. Either or both would compound the effects of previous layoffs, the Deferred Resignation Program, and other aggressive staffing actions already undertaken by the administration on DOE’s workforce capacity.

While some turnover in staff is to be expected at the start of a new administration, this administration has pursued an unprecedented and aggressive series of actions to reduce the federal workforce. Early on, DOE leadership laid off probationary employees en masse—sources range between 555 to up to 2,000—and placed 25 staffers from the Office of Energy Justice and Equity on leave. 

The biggest impact on career staff has been the Deferred Resignation Program (DRP), which incentivized employees to voluntarily resign with pay and benefits through the end of FY25, or risk losing their jobs in future reductions in force. DOE staff data obtained by FAS show that 3,051 federal employees took the DOGE-sponsored DRP offer. (FAS will soon release a report with more analysis of this data.) Given this significant attrition, it is imperative that DOE leaders determine how to best transition staff into their new roles, to maintain as much certainty as possible as the agency navigates ongoing capacity challenges within a new structure.   

Lost capacity will also impact DOE’s awards. Nearly 350 projects across multiple DOE offices have received cancellation notices, issued either in May or October. Awardees — many tied to offices now eliminated under the reorganization — have reported slow or nonexistent communication from DOE even before the restructuring took effect. As DOE’s political leadership moves forward with mass termination actions, recipients are left attempting to navigate informal dispute processes or pursue mutually acceptable resolutions with limited guidance or transparency. Reversing independently vetted, merit-based technical awards at this scale is highly unusual and has already brought about significant dysfunction, raising serious concerns as the reorganization proceeds. 

The broader instability created by this upheaval will likely make it harder for the hundreds of businesses and state and local governments that are seeking to contest their grant terminations, as well as the thousands of other organizations that administer DOE-funded projects in service of the American people.

Questions Remain

The DOE reorganization leaves several critical questions unanswered, raising concerns about the agency’s ability to deliver on its stated mission:

These remaining questions highlight the tension between ambitious structural change and the practical limits of an understaffed, under-resourced agency. This large-scale agency reorganization threatens DOE’s ability to sustain scientific leadership, advance clean energy deployment, and address the nation’s energy affordability crisis. 

Report: When Ambition Meets Reality — Lessons Learned in Federal Clean Energy Implementation, and a Path Forward

The Trump administration has scrapped over $8 billion (so far) in grants for dozens of massive clean energy projects in the United States. For those of us who worked on the frontlines of Bipartisan Infrastructure Law (BIL) and Inflation Reduction Act (IRA) implementation, the near-weekly announcements and headlines have been maddening, especially at a time when many of these projects would have helped address soaring electricity prices and surging demand growth.

While some of these cancellations were probably illegal, they nevertheless raise fundamental questions for clean energy advocates: why was so much money still unspent…and why was it so easy to cancel?

In a new report, we begin to address these fundamental implementation questions based on discussions with over 80 individuals – from senior political staff to individual project managers – involved in the execution of major clean energy programs through the Department of Energy (DOE). 

Their answer? There is significant opportunity – as our colleagues at FAS have written – for future Executive branch implementation to move much faster and produce much more durable results. But to do so, future implementation efforts must look drastically different from the past, with a ruthless focus on speed, outcomes, and the full use of Executive Branch authorities to more quickly get steel in the ground.

The risk of risk aversion

Take the grant cancellations example. The Trump administration has relied on one small clause in the Code of Federal Regulations (2CFR 200.340(a)(4)) as the legal basis for its widespread cancellations. This clause, traditionally included in most grants between the government and a private company, allows the government to cancel any grant that “no longer effectuates the program goals or agency priorities” and essentially functions as a “termination for convenience” clause.

But including this “termination for convenience” clause was optional. DOE could have leveraged a different, more flexible contracting authority for many awards. It also could have processed what’s known as a “deviation” in order to exclude the clause from standard contracts. Leaders of program offices were aware of these options, with some staffers strenuously objecting to the inclusion of termination for convenience.

But in the end, DOE offices generally opted to keep this clause because it was the way the agency had always executed (primarily R&D) grants in the past, and because sticking to established procedures was seen as the best way to avoid the risk of Congressional or Inspector General oversight. 

And yet, this risk-averse approach perversely increased the risk of project failure, by creating an easy kill switch for an administration looking for grounds on which to cancel particular projects.

This attitude toward risk – which saw defaulting to the status quo as the most prudent path – was a constant barrier to effective implementation. (In addition to opening up grants to cancellation, the embrace of 2CFR 200 regulations meaningfully slowed negotiations as companies bristled at the obscure accounting and other compliance measures the regulations would impose on them.)

Understanding this culture of risk aversion offers two takeaways for improving government: (1) rigorously question status quo decisions and avoid defaulting to agency precedent and (2) avoid excessive focus on eliminating every risk or avoiding external backlash or oversight (especially given that backlash and oversight are likely regardless of the approach.) 

Speed is paramount

Of course, excluding the termination for convenience clause would not have been a panacea. It’s likely the Trump administration would have devised some other pretext for cancelling the grants that may have been just as successful, though perhaps legally shakier.

That’s why implementers also told us that speed is critical. The best defense is a strong offense. And the best way to prevent money from being taken back is to have already spent it on promising projects. The federal government has moved faster in implementation of large policies before. During the New Deal, the Tennessee Valley Authority moved from passage of its founding law to beginning construction on a major dam in just four months. Operation Warp Speed delivered cutting-edge life-saving vaccines to millions of Americans in about a year. While the contexts and goals of these programs were different, we know from history that the federal government can move fast.

But at DOE, only 5% of the funds appropriated through the Bipartisan Infrastructure Law had actually been spent (not just obligated) by the time the Biden administration ended three years later. In addition to making clean energy projects more vulnerable to subsequent cancellations, the pace of the rollout meant that the basic political hypothesis animating clean energy legislation—that the economic development projects brought, especially to red states, would create a durable bipartisan coalition for clean energy—went untested.

Practically everyone we spoke with expressed frustration at the slow pace of implementation. Interviewees highlighted many challenges associated with a relatively slow pace of BIL and IRA implementation, such as:

The work begins now

One commonality between these and other issues identified in our report is encouraging: they are mostly within the Executive Branch’s power to solve. A sufficiently prepared future administration could address many of these challenges for future federal clean energy efforts without relying on the vagaries of the legislative process. But the work must begin now. 

On contracting, for instance, a future administration’s DOE could make better use of Other Transactions Authority for clean energy. But it should be prepared with drafts of the basic commercial terms of agreements between the government and companies it works with. Similarly, a proactive future administration will come in with a clear view on how to streamline compliance with environmental, prevailing wage, domestic sourcing, and other cross-cutting requirements. On decision-making, a future administration can set norms pushing decision-making to the lowest possible level, clarify processes to elevate and execute major issues, and establish small, clear, and empowered teams that own frontline negotiations. 

If pursued, this updated approach to federal clean energy implementation will look drastically different. But one way or another it will have to: the next time there is a federal government interested in accelerating clean energy, it is likely to be dealing with a private sector much more wary of working with the government, fiscal constraints that limit the likely scale of any clean energy funding, and a dramatically altered federal workforce and state apparatus.

Much can be done outside of the federal government — including at state and local levels — to prepare for those circumstances. It is possible for a future federal administration to achieve faster and more durable clean energy outcomes. But to make that possible, the work must begin now. 

It’s not enough to say we need to make full use of DOE’s authorities; we need the drafted Secretarial directives and advance legal legwork to do it, and leadership well-equipped with the details and government-insider knowledge to execute on it. 

It’s not enough to say we want more nuclear, transmission, or critical minerals projects; we need to have identified the priority projects and designed the strategies and programs needed to actually put them in motion on Day 1. 

It’s not enough to say we should take a “whole-of-government” approach to an issue like clean energy; we need a detailed plan for how to use the $5 billion/year in electricity purchases and the PMA’s 45,000 miles of transmission lines—all under the direct control of the federal government—to achieve explicit policy outcomes. 

And it’s not enough to say we need to rebuild the federal workforce; we need a roster of hundreds of people that can be brought on and trained rapidly to implement within weeks.

To live up to the spirit of the New Deal and Operation Warp Speed—the spirit that turned ambitious goals into massive real-world impact in a matter of months—the next administration must come armed not only with broad aspirations, but also with the detailed plans required to implement them.

Want abundant energy? Ask who benefits from scarcity.

This article originally was published July 30 on Utility Dive.

A new obsession with abundance is spreading through policy conversations and governors’ mansions across the country. Abundance advocates, boosted by a recent book from Ezra Klein and Derek Thompson, envision a future in which we defeat the climate crisis, reduce cost of living and improve quality of life by speeding up construction of housing and energy infrastructure.

Making clean energy abundant is certainly critical to addressing the climate crisis. We need plentiful, cheap, clean energy to replace polluting fossil fuels in buildings, vehicles and factories. As a senior policy advisor in the Biden White House, I worked on many policies aimed at clean energy abundance, directly or indirectly, and I also saw firsthand how those policies were insufficient. That’s why it is now clear to me that the abundance movement’s playbook — to streamline permitting, simplify government processes and make public investments more focused — falls short of what’s needed.

We won’t achieve energy abundance unless we contend with the powerful interests that benefit from scarcity. Doing so requires reforming electricity markets, refreshing regulation of electric companies and rethinking the way we pay for grid infrastructure.

Let’s start with the problem: we are not building nearly enough clean energy to curb climate change and keep electricity affordable. Analysis from three leading research projects found that for us to get within striking distance of the Paris climate goals and plan for the lowest electricity costs, we must build 70 GW to 125 GW of clean energy per year, much higher than the record 50 GW built in 2024. As a result of our failure to build new energy projects fast, families and businesses will pay more for power and the planet will warm faster.

This is no longer an economic issue. Clean electricity is now often cheaper to deploy than new coal and gas, and in many cases cheaper than existing fossil-fuel-fired power plants. So what is stopping us from building it fast enough?

To answer this question, abundance proponents, including Klein and Thompson, largely focus on two main obstacles: 1) opposition from people who live nearby specific projects and groups concerned with local environmental impacts and 2) “everything-bagel liberalism,” the tendency to add too many strings to government incentives. The solution to the first problem, they argue, is to limit the power of the opposition by streamlining federal permitting and constraining public input in state and local siting processes. And for the second, their remedy is to limit the number of goals of government programs and reduce the requirements for funding.

There is no doubt that some clean energy and transmission projects have been thwarted by local opposition and lengthy litigation. And it is a worthy goal to make government incentives as effective as possible. But by portraying the primary villains defending scarcity as local landowners, conservation groups and the diversity of the liberal coalition, Klein and Thompson ignore important characters and policies that, if left unchecked, will continue to hamstring the pursuit of abundance.

For example, consider the situation unfolding in the electricity market organized by the PJM Interconnection, which operates the electricity grid for 65 million people in 13 mid-Atlantic and midwestern states and Washington, D.C. An independent, non-governmental entity, PJM runs the process to connect new power plants to the grid, among other important processes to make the electricity system work. PJM has been notoriously bad at this job. It ranks as the worst grid operator in the country in terms of the speed and effectiveness of its interconnection process. The average project waits five years for PJM to give it permission to connect to the grid. In fact, PJM closed its doors to new project applications in 2022 and has yet to re-open it. As a result, electricity demand is outpacing supply, prices are rising rapidly, and new clean energy projects are dying as they wait for word from PJM.

PJM has the power to speed up the process to connect new projects, which would increase electricity supply and cut electricity prices. But PJM has largely resisted reforms and focused instead on extending the life of existing power plants. Here is where it is helpful to ask: who benefits from an electricity shortage and the resulting high prices? It is not conservation groups or liberal stakeholder groups with competing goals (who have no voting power in PJM’s governance structure). It is the incumbent utilities that own the fleet of aging coal-fired power plants, which are struggling to compete with new clean energy projects. If cheap clean energy is allowed to enter the market, these companies will make less money. The outdated processes for approving new projects help prevent cheaper energy resources from threatening their business model. The companies have significant decision-making power — together, power plant owners, transmission owners (many of whom also own generation) and other energy service suppliers make up 60% of the voting power in PJM decisions.

Energy will not be abundant in the mid-Atlantic unless we take on the interests that are benefitting from scarcity. That means reforming the electricity market to stop overpaying existing power plants at the expense of customers, changing the rules to make it easier to connect new power plants to the grid and updating governance structures to make sure that customers are properly represented.

Similar cases abound of powerful interests benefitting from scarcity and defending policies that prevent abundance. Monopoly utilities, for example, benefit from abundant energy to the extent that they can build it and can earn a return on their investments — but not if the energy comes from their competition. That’s why utilities in the southeast have gone to great lengths to block transmission lines that enable cheap clean energy to compete with their existing power plants. Changing how those utilities make money (for example, by paying for outcomes instead of investments) could flip the script and turn the utilities into energy abundance advocates.

If the abundance movement is to succeed, it must identify the defenders of scarcity and broaden the playbook to either overcome those interests or change their incentives to bring them on the team.

Beyond Binary Debates: How an “Abundance” Framing Can Restore Public Trust and Guide Climate Solutions

Public trust in U.S. government has ebbed and flowed over the decades, but it’s been stuck in the basement for a while. Not since 2005 have more than a third of Americans trusted the institution that underpins so much of American life.

We shouldn’t be surprised. Along with much progress, over the past two decades the U.S. became more unequal, saw stagnation or decline in many rural counties, stumbled into a housing crisis, and experienced worsening health outcomes. When the government can’t deliver (especially in core areas like health, housing, and economic vitality), trust in it wanes while the false promises of autocrats grow more appealing.

The strength of American democracy, in other words, hinges in large part on how well our government functions. This urgency helps explain why, at a moment when the United States is flirting with autocracy ever more vigorously, a book on precisely this topic became a #1 bestseller and prompted a debate around the “abundance agenda” that has turned quasi-existential for many in the policy world.

The abundance agenda, as described by Jonathan Chait, is “a collection of policy reforms designed to make it easier to build housing and infrastructure and for government bureaucracy to work”, such as by streamlining regulations that constrain infrastructure buildout while scaling up major government programs and investments that can deliver public goods. 

Unfortunately, popular discourse often flattens the conversation around abundance into a polarized binary around whether or not regulations are good. That frame is overly reductionist. Of course badly designed or out-dated regulatory approaches can block progress or (as in the case of the housing policies that the book Abundance centers on) dry up the supply of public goods. But a theory of the whole regulatory world can’t be neatly extrapolated from urban zoning errors. In an era of accelerating corporate capture, both private and public power structures act to block change and capture profits and power. We need a savvier understanding of what happens at the intersections between the government and the economy, and of how policy translates to communities at local scales.

We should therefore regard “abundance” less as a prescriptive policy agenda than as a frame from which to ask and answer questions at the heart of rebuilding public trust in government. Questions like: “Why is it so hard to build?” “Why are bureaucratic processes so badly matched to societal challenges?” “Why, for heaven’s sake, does nothing work?”

These questions can push us in a direction distinct from the usual big vs. small government debates, or squabbles about the welfare state versus the market. Instead, they may help us ask about interactions within and between government and the economy – the network of relationships, complex causation, and historical choices – that often seem to have left us with a government that feels ill-suited to its times.

At the Federation of American Scientists (FAS), we, along with colleagues in the broader government capacity movement, are exploring these questions, with a particular focus on agendas for renewal and advancing a new paradigm of regulatory ingenuity. One emerging insight is that at its core, abundance is largely about the dynamics of incumbency, that is, about the persistence of broken systems and legacy power structures even as society evolves. A second, related, insight is that the debate around abundance isn’t really about de-regulation or the regulatory state (every government has regulations), but rather about how multi-pronged and polycentric strategies can break through the inertia of incumbent systems, enabling government to better deliver the goods, services, and functions it is tasked with while also driving big and necessary societal changes. And a third is that the abundance discourse must center distributive justice in order to deliver shared prosperity and restore public trust.

Moving the Boulder: Inertia, Climate Change, and the Mission State

The above insights are particularly helpful in guiding new and more durable solutions to climate change – a challenge that touches every aspect of our society, that involves complex questions of market and government design, and that is rooted in the challenges of changing incumbent systems.

Consider the following. It’s now been almost 16 years since the U.S. Environmental Protection Agency (EPA) issued its 2009 finding that greenhouse gas (GHG) emissions are a public danger and began trying to regulate them. To simplify a complex history, what happened on the regulatory front was this: the Obama administration tried to push regulations forward, the Trump administration worked to undo them, and then the cycle repeated through Biden and Trump II, culminating in the EPA’s recent move to revoke the endangerment finding.

We can certainly see the power of incumbency and inertia within this history. Over a decade and a half, the EPA regulated greenhouse gases from new power plants (though never very stringently), new cars and trucks (quite effectively cutting pollution, though never with mandates to actually electrify the fleet), and…that’s about it. The agency never implemented standards for the existing power plants and existing vehicles that emit the lion’s share of U.S. GHGs. It never regulated GHGs from industry or buildings. And thanks to the efforts of entrenched fossil-fuel actors and their political allies, the climate regulations EPA managed to get over the finish line were largely rolled back. 

None of this should be read as a knock on the dedicated civil servants at EPA and partner federal agencies who worked to produce GHG regulations that were scientifically grounded, legally defensible, technically feasible, and cost effective, even while grappling with the monumental challenges of outdated statutes and internal systems. But it certainly speaks to the challenge of securing lasting change.

The work of economist Mariana Mazzucato offers clues to how we might tackle this challenge; she paints a portrait of a “mission state” that integrates all of government’s levers to define and execute a particular objective, such as an effective, equitable, and durable clean energy transition. This theory isn’t a case for simplistic deregulation, nor is it a claim that regulations somehow “don’t work”. Rather, it suggests that (especially in a post-Chevron world) another round of battles over EPA authority won’t ultimately get us where we need to go on climate, nor will it help us productively reshape our institutions in ways that engender public trust.

The shift from one energy system foundation to another is messy – and it is inherently about power. As giant investment firms hustle to buy public utilities, enormous truck companies side with the Trump administration to dismantle state clean freight programs, and subsidies for clean energy are decried as unfair and market-distorting even though subsidies for fossil energy have persisted for nearly a century, it’s clear that corporate incumbents can capture public investments or capture government power to throttle change. Delivering change means thinking through the many ways incumbency creates systems of dependencies throughout society, and what options – from regulations to monetary policy to the ability to shape the rule of law – we have to respond. To disrupt energy incumbents and achieve energy abundance, in other words, we must couple regulatory and non-regulatory tools.

After all, the past 16 years haven’t just been a story of regulatory back-and-forth. They are also a story of how U.S. emissions have fallen relatively steadily in part due to federal policies, in part to state and local leadership, and in part to ongoing technological progress. Emissions will likely keep falling (though not fast enough) despite Trump-era rollbacks. That’s evidence that there’s not a one-to-one connection between regulatory policy and results.

We also have evidence of how potent it can be when economic and regulatory efforts pull in tandem. The Inflation Reduction Act (IRA) was the first time the United States strongly invested in an economic pivot towards clean energy at scale and in a mission-oriented way. The results were immediate and transformative: U.S. clean energy and manufacturing investments took off in ways that far surpassed most expectations. And while the IRA has certainly come under attack during this Administration, it is nevertheless striking that today’s Republican trifecta retained large parts of the entirely Democratically-passed IRA, demonstrating the sticking power of a mission-oriented approach.

Conducting the Orchestra: The Need for an Expanded Playing Field

Thinking beyond regulatory levers (i.e., a multi-pronged approach) is necessary but not sufficient to chart the path forward for climate strategy. In a highly diverse and federalist nation like the United States, we must also think beyond federal government entirely.

That’s because, as Nobel-winning economist Dr. Elinor Ostrom put it, climate change is inherently a “polycentric” problem. The incumbent fossil systems at the root of the climate crisis are entrenched and cut across geographies as well as across public/private divisions. Therefore the federal government cannot effectively disrupt these systems alone. Many components of the fundamental economic and societal shifts that we need to realize the vision of clean energy abundance lie substantially outside sole federal control – and are best driven by the sustained investments and clear and consistent policies that our polarized politics aren’t delivering.  

For example, states, counties, and cities have long had primary oversight of their own economic development plans, their transportation plans, their building and zoning policies, and the make-up of their power mix. That means they have primary power both over most sources of climate pollution (two-thirds of the world’s climate emissions come from cities) and over how their economies and built environments change in response. These powers are fundamentally different from, and generally much broader than, powers held by federal regulatory agencies. Subnational governments also often have a greater ability to move funds, shape new complex policies across silos, and come up with creative responses that are inherently place-based. (The indispensable functions of subnational governments are also a reason why decades of cuts to subnational government budgets are a worryingly overlooked problem – austerity inhibits bottom-up climate progress.)

The private sector has similar ability to either constrain or drive forward new economic pathways. Indeed, with the private sector accounting for about half of funding for climate solutions, it is impossible to imagine a successful clean-energy transition that isn’t heavily predicated on private capabilities – particularly in the United States. While China’s clean-tech boom is largely the product of massive top-down subsidies and market interventions, a non-communist regime must rely on the private sector as a core partner rather than a mere executor of climate strategy. Fortunately, avenues for effectively engaging and leveraging the private sector in climate action are rapidly developing, including partnering public enterprise with private equity to sustain clean energy policies despite federal cutbacks.

An orchestra is an apt analogy. Just as many instruments and players come together in a symphony, so too can private and public actors across sectors and governance levels come together to achieve clean energy abundance. This analogy extends Mazzucato’s conception of a mission state into a “mission society”, envisioning a network that spans from cities to nation states, from private firms to civil actors, working in concert to overcome what Ben Rhodes calls a “crisis of short termism” and deliver a “coherent vision” of a better future.

Building Towards Shared Prosperity

For the vision to be coherent, it must resonate across socioeconomic and ideological boundaries, and it must recognize that the structures of racial, class, and gender disparity that have marked the American project from the beginning are emphatically still there. Such factors shape available pathways for progress and affect their justice and durability. For instance: electric vehicle adoption can only grow so quickly until we make it much easier for those living in rented or multifamily housing to charge. Cheaper renewables only mean so much when prevailing policies limit the financial benefits that are passed on to lower-income Americans.

To borrow, and complicate, a metaphor from Abundance: distributive justice questions are fundamentally not “everything bagel” seasonings to be disregarded as secondary to delivery goals. They are meaningful constraints on delivery as well as critical potentialities for better systems, and are hence central to policy and politics. No mission state or mission nation, addressing the polycentric landscape of networked change needed to shift big incumbent systems, can afford to dismiss or ignore them. Displacing those systems requires wrestling with inequality and striving to create shared prosperity through new approaches that are distributively fair.

That’s an approach rooted in orchestration, one that asks why some instruments drown out others, and how to alter relationships between players to produce better results. It understands that we can’t solve scarcity without centering distributive justice, because as long as deep structural disparities and structural power exist there is strong potential for the benefits of rapid energy or housing buildout to be channeled towards those who need them least. And it is capable of restabilizing the center of American society and restoring trust in U.S. government because it realistically grapples with the interests of incumbents while paying more than lip service to the interests of a dazzlingly diverse American public.

This re-fashioned abundance agenda can provide actual principles for administrative state reform because it knows what it is asking regulators, and the larger intersecting layers of government and civil society, to do: Systematically remove points of inertia to accelerate shared prosperity in a safe climate, while anticipating and solving for distributive risks of change.

Because again, the abundance debate isn’t really about whether or not regulations are good. It’s about unfreezing our politics by being clear and courageous about our goals for a society that works better and is capable of big things.

This is not the first time Americans have envisioned a better future in the midst of national crisis, or the first time we have collectively disrupted failed incumbent systems. From our messy foundation, to the beginnings of Reconstruction during the Civil War, to the architects of the New Deal envisioning an active and effective government in the midst of the Dust Bowl and Depression, the history of our nation is full of evidence that a compelling vision of truly democratic government can pull Americans back together despite deep and real problems. Each time, these debates have scrambled existing binaries, and driven realignment. We are on the verge of realignment again as the systems built up over the fossil era break down and our neoliberal order fragments. This is the right time to engage, together, in orchestrating what comes next.

Trump’s Cuts Could Exacerbate The Energy Emergency

Originally published at Forbes.

Demand for power is climbing to unprecedented levels. U.S. Energy Information Administration data reveals that July set a new record for electricity peak demand, driven by nationwide heat waves and increasing reliance on power-intensive artificial intelligence tools. And, given the state of the electrical grid in several jurisdictions, the U.S. The Department of Energy declared an emergency order on July 28 to secure the mid-Atlantic power grid. The situation could worsen as summer continues, although it has already been a long time in coming.

On day one of his second administration, President Donald Trump declared a national energy emergency. The declaration formalized the idea that economic prosperity, national security, and foreign policy are under threat due to an insufficient energy supply. While this claim may be intended to encourage leniency towards the fossil fuel industry, there are many issues with our energy infrastructure that do need urgent attention. The American Society of Civil Engineers gave the nation’s aging electrical infrastructure a D+, a failing grade, in the organization’s latest annual Infrastructure Report Card. The aging grid is in dire need of infrastructure upgrades so that it is able to serve the increasing power demand as we see more frequent extreme temperatures and weather events due to climate change, alongside the expansion of data center power use and the electrification of buildings and transportation.

Currently, energy generation takes years to connect to the grid due to slow permitting processes and a patchwork of utility regulations and forecasters predict electricity use will increase 50% by 2050 in the U.S.

However, instead of creating a pathway to speed up the connection of new energy sources to the grid, Trump followed this emergency declaration with a budget request for fiscal year 2026 that kneecaps energy innovation. Followed closely after that was the passage of the One Big Beautiful Bill Act, which, in combination with severe budget and personnel cuts in government-funded science and technology research and development, will likely result not in energy stability or even dominance, but a true national emergency: a long-lasting rise in energy prices. It may also lead to a decline in the U.S.’s leadership in technology innovation and talent.

Investing In Innovation Could Help Address The Energy Crisis

Today’s ubiquitous GPS, computer chips, solar photovoltaic cells, and lithium-ion batteries didn’t arrive from the ether fully-formed and ready for consumers to use. Many of these innovations are thanks to the equivalent of $7.4 billion (in today’s dollars) taxpayers invested shortly after WWII ended to create the Office of Scientific Research and Development. Funds from OSRD eventually led to discoveries in the 1940s and 50s that resulted in the establishment of the National Science Foundation National Aeronautics and Space Administration, Atomic Energy Commission (later becoming the Department of Energy), and other science agencies.

Federal funding for research and investment in these agencies has resulted in trillions of dollars of economic benefit, resulting in the U.S. being a leading developer of technologies that have transformed our world.

Funding cuts to the DOE pose a threat to our energy system and leadership in energy systems like next-generation grid technology, AI, and clean energy development and manufacturing.

DOE is the largest funder of basic physical science research in the government. The DOE’s Office of Science’s annual budget is $8.2 billion for projects related to critical minerals, quantum computing, enhanced geothermal energy, and artificial intelligence. All are topics that the Trump administration has identified as crucial to U.S. economic competitiveness and “dominance.” Applied technology offices within the DOE – the ones that transform scientific research into commercial applications, like the Manufacturing and Energy Supply Chain Office, Office of Clean Energy Demonstrations, and the Energy Efficiency and Renewable Energy office— have funded projects across industries and sectors. These include the private sector, national labs, and universities, all of whose work has resulted in historically low costs for battery storage, solar photovoltaics, grid components, and critical infrastructure.

These investments have fed into a resurgence of our domestic manufacturing industry across the Rust Belt (Midwest) and the Sunbelt (southern states like Georgia, South Carolina, and Texas). The DOE historically has a positive return on taxpayer investment across its research and development offices. From its start in 1976 through 2015, DOE invested $12 billion in research, development, and deployment in EERE and found that its return yielded $388 billion in economic benefits, or an ROI of over 27% by conservative estimates.

The Building Technologies Office within DOE, which is known for developing energy-saving technologies that save consumers money on their utility bills, has estimated that for every $1 invested in its R&D, it has yielded between $20 and $261 in economic benefits. The benefits of these investments are in the form of job creation, consumer cost savings, and new technologies like horizontal drilling – yes, the technology used for fracking developed through the DOE’s R&D program on natural fracturing.

Given that context, it may be counterintuitive that the same officials touting U.S. leadership in innovation and discovery are proposing the largest financial cuts to DOE in history. The president’s budget request is proposing a 26% cut to non-defense DOE programs. The table below summarizes the cuts, with a heavy focus on programs that have resulted in the development and economic success of new energy technologies, especially clean energy technology.

Changes between Trump’s budget request and the current funding level of DOE offices that fund research and development
DOE OfficePercent ChangeNotes
EERE-74%Zeros out solar, wind, and hydrogen programs
ARPA-E-57%Shifts focus to “firm, reliable power”
Office of Science-14%Largest federal sponsor of basic physical science research
Fossil Energy-31%Formerly fossil energy and carbon management, focus toward developing fossil fuel
Cybersecurity, Energy Security, and Emergency Response-25%This office was created under the first Trump administration, responsible for security for cyberphysical threats
Office of Electricity-31%
Grid Deployment Office-75%
Office of Clean Energy Deployment-100%Closes this office

Slashing research and development programs across the DOE, all while Congress rolls back clean energy tax incentives and programs, is not going to solve the nation’s energy emergency. It makes our current challenges even worse.

The problems that the aging U.S. power grid faces are already compounded by historically high (and growing) consumer demand – a result of increasingly extreme temperatures and weather events, the explosion of data centers’ energy demand, and the electrification of even more transportation and buildings. Budget cuts and the insistence on using energy derived from fossil fuels may only exacerbate the problems the U.S. is already facing. In fact, defunding scientific research will most likely allow international competitors to slingshot ahead of the U.S. in new technology development and adoption.

If Americans become increasingly reliant on foreign intellectual property and technology, while the domestic grid continues to decay, the national energy emergency is likely to grow even more dire in the years to come.

Position on the Environmental Protection Agency’s Proposal to Revoke the Endangerment Finding

Yesterday, the U.S. Environmental Protection Agency (EPA) proposed revoking its 2009 “endangerment finding” that greenhouse gases pose a substantial threat to the public. The Federation of American Scientists (FAS) stands in strong opposition.

The science couldn’t be clearer: unchecked emissions of greenhouse gases are increasing the frequency and toll of disasters like flash flooding in Texas, catastrophic wildfires in Los Angeles, and stifling heat domes that repeatedly blanket huge swathes of the country. Revoking the endangerment finding would shove science aside in favor of special interests – and at the expense of American health and wellbeing.

“The Environmental Protection Agency claims that the endangerment finding led to ‘costly burdens’ on American families and businesses, when in reality it is the cost of failing to regulate climate pollution that will hit Americans the hardest,” said Dr. Hannah Safford, Associate Director of Climate and Environment at the Federation of American Scientists. “Climate change is expected to cost each American child born today half a million dollars over their lifetimes. Is that the legacy we want to leave our kids?”

The EPA’s proposal is the latest move by the Trump Administration to gut federal climate policy. This campaign runs counter to public opinion: 4 in 5 of all Americans, across party lines, want to see the government take stronger climate action. At the same time, potential revocation of the endangerment finding underscores the need for a durable new approach to climate policy that integrates innovative regulatory design, complementary policy packages, and attention to real-world implementation capacity. FAS and its partners are leading on this priority alongside state and local leaders.

“Despite the Trump Administration’s short-sighted and ideologically motivated actions, the clean energy transition has unstoppable momentum, and there is tremendous opportunity for innovation on how we design and deliver climate policies that are equitable, efficient, and effective,” added Dr. Safford. “The Trump Administration may be stepping back, but many others are stepping forward to create a world free from climate danger.”