Six State Priorities to Get Clean Energy Wins

How states can optimize federal funding before it’s too late and fill in any funding gaps.

Cleantech economics keep shifting — some improving, some worsening. With the passage of the One Big Beautiful Bill Act (OBBBA), the costs of some technologies have changed more than others. What hasn’t changed is that most people recognize that clean technologies are the growth edge for the economy, both within the United States and globally.

Certainty enables action. The passage of the OBBBA means states can now move things forward according to this new policy landscape. With incentives phasing out at the federal level, states can take advantage before they’re gone. They also have a huge opportunity to grow their economies and address load growth through developing and deploying clean energy. By pursuing the best paths forward, states can secure investments, save money, improve health, and position their businesses and residents to thrive. Here are six recommended priorities for states to pursue.

1. Convert specific fleets to electric vehicles (EVs) immediately

The tax credits for EVs expire on Sept 30, 2025. Any major fleets within states (public or private) should consider an EV conversion immediately. Obviously not everyone can purchase fleet vehicles that quickly. Those that can are likely private fleets or already have a procurement effort underway. Those fleet managers will reap the financial benefits for years to come. We’ve even got a chart to show which fleets make the most sense to convert with the tax credits and how that varies based on charging infrastructure, local gas prices, and the repeal of the tax credits. The higher gas prices are, the better the deal for EVs. This is also a good idea if you want to hedge against future gas price volatility or are concerned about tariff impacts.

States can convert their own fleets and encourage businesses to convert theirs. The purchase just has to be made by Sept. 30, 2025.

2. Speed up permitting and build faster

With load growth increasing, most states are racing to address energy needs. And with the energy tax credits for solar and wind going away from projects that start construction after July 2026 AND are placed in service after December 31, 2027, it’s crucial to help those projects move faster through permitting and interconnection to meet that deadline. This can also speed up nuclear, geothermal, storage, and other energy projects that will start phasing out in 2034.

Permitting

Current permitting and siting practices can add many months to the process. While the federal government and local governments have a role here, states have much of the authority to address this. Some recommendations are:

• Replicate the Virginia Permit Transparency (VPT) and Permitting Enhancement and Evaluation Platform (PEEP), which highlights permits that are considered gold-star models for improved processes that cut processing times 70 percent.
• Help local communities become “clean energy opportunity zones” to attract development that can bypass the local opposition in other jurisdictions. Examples include Texas’ Competitive Renewable Energy Zones (CREZ) and the Renewable Energy Zones in Illinois’ 2024 plan. Instead of fighting opposition and delaying projects, support communities that “raise their hand” to develop clean energy; provide incentives, support, or marketing; and possibly use model by-right permitting.
• Explore the Foundation for American Innovation’s State Permitting Playbook and state permitting scorecard.
• Review Washington State’s detailed report on siting and permitting reform from Beveridge and Diamond.
• Consider adopting the policies recently passed in Texas and New Jersey to speed up home solar and storage permitting by allowing approved third-party systems to move permits quickly.
• And stay tuned as RMI will be providing more guidance for states in 2025.

Interconnection

Interconnection processes are also a huge bottleneck. Over 2,600 gigawatts of clean energy projects — equivalent to more than double the current electricity generating capacity in the United States — are held up in interconnection queues right now. States with a regional transmission organization (RTO) can work with the RTO to improve their processes and speed up approvals. States without an RTO should quickly devote resources to modernizing interconnection approvals to speed them up.

Note that clean repowering — connecting to existing interconnection sites and facilities — is another way to get past interconnection slow-downs.

3. Fill financial gaps

While many solutions can help lower costs for clean energy (including permitting reform), two paths can make a big difference without requiring large, ongoing budget commitments from the state.

The first is building up public-private partnerships to deliver better financing for clean energy. Most states have established “green banks,” state energy financing institutions (SEFIs), or both. For example, Alabama’s Powering Growth Act went into effect June 1, 2025, and creates the tech-neutral Alabama Energy Infrastructure Bank and the Strategy Energy Procurement Fund. With a one-time infusion of dollars from a state budget or a state bond, these services can leverage private capital for decades to come and provide dedicated financing for energy projects, often with better terms.

The second is to coordinate aggregate purchasing of equipment and installations for specific technologies. Aggregate purchasing is too often overlooked as a financial solution for cleantech. It can reduce costs anywhere from 10 to 40 percent on equipment and labor, potentially outpacing the benefits of tax credits. And the outcome is even better if you can use both aggregation and tax credits. Combining aggregate purchase programs with reverse auctions can further lower costs. Creating a time-bound program for other entities to join an aggregate purchasing opportunity can also help spur action. Some states already have programs to allow local governments to bypass their own procurement requirements to participate in aggregate purchase efforts. States can make small investments to coordinate such efforts that pay for themselves in public savings while also benefitting others across the state.

We also have released resources to support financial solutions, including how to put together capital stacks, funding decision trees, and how to identify existing planned projects within each state. The EIA’s list of planned energy generation projects is also a useful resource to identify projects.

4. Prioritize energy affordability

Energy bills are causing real problems for consumers. Rising costs are driven by wildfires, natural gas price volatility, perverse utility incentives, and other problems in the market. But there’s a wealth of things states can do to keep electricity costs down. Best practices from governors include actions like starting utility cost controls, supporting efficiency and solar and storage systems for customers, and getting rid of unnecessary “riders” on bills. States can also move to end energy poverty. Our new Energy Poverty Policy Simulator shows states how.

These steps are especially important right now as new investments in fossil fuels threaten to make energy bills worse. Action is needed to keep costs down. And lowering electricity costs will improve the economics for electrification.

Stay tuned for our soon-to-launch legislative toolkit for energy affordability and more state resources for reducing consumer energy costs across sectors in the year ahead.

5. Launch home energy rebates

Almost every state signed up to participate in the home energy rebate program, but most state efforts were put on hold due to limited contract capacity. While this is still causing slower rollouts, the program was unaltered by the OBBBA, meaning states can continue moving those programs forward and start offering home improvement incentives. Moving these projects forward also helps make people’s energy bills more affordable.

6. Attract manufacturing and lead cleantech innovation

The tax credits to support manufacturing remain, and efforts to re-build America’s manufacturing capacity are politically broadly popular. Not every state should build every kind of cleantech, but every state has strong economic development potential for some part of the clean energy economy. RMI’s Clean Growth Tool clarifies which industries each sub-state region is well-positioned for in terms of existing business and workforce skills.

States stepping up on manufacturing helps the United States secure a competitive position in one of the fastest growing parts of the economy and stay at the front edge of innovation. States can enhance their global competitiveness by further investing in the research, development, and commercialization of cleantech. The exciting opportunities for innovation in this space are only growing, and states can position themselves to be new global leaders. A few key innovation spaces include:

• New battery technologies
• Virtual power plants (VPPs) including AI management
• Grid enhancing technologies (GETs)
• Geologic hydrogen exploration
• Solid state cooling
• And many others

Bringing in the Billions

States must move fast to bring in the billions of dollars available in federal support for these technologies, all of which have a closing window of availability. The first half of 2025 saw some faltering in these projects due to an uncertain financial landscape. Now, with the passage of OBBBA, the path is clearer. Certainty enables action.