Policy Solutions

Renewable Energy

US Federal
Electricity

Research and Development

Federal investment in research and development (R&D) supports economic development, drives down costs for key technologies, and promotes U.S. leadership on clean energy and climate. Investment in R&D for renewable technologies is driven primarily by the U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy (EERE). Further R&D for renewable energy technologies comes from the DOE national labs and Advanced Research Projects Agency-Energy (ARPA-E).

Federal policymakers should increase investment and enact programmatic reforms to ensure that DOE expands R&D for:

  • Next-generation solar materials, including super-efficient perovskite solar cells;
  • Next-generation onshore wind technologies, including larger diameter wind blades and taller wind towers, and optimization/control of fleets of wind plants;
  • Offshore wind technologies including floating offshore wind foundations; and
  • Marine and hydrokinetic technologies.

Validation and Early Deployment

Demonstration

Before we can deploy promising clean energy technologies at scale, we must demonstrate and validate their cost and performance in real-world conditions. Demonstration reduces the economic and institutional risks of new clean technologies—which is why the DOE should develop a robust portfolio of demonstration projects. In the near term, these should focus on offshore floating wind and marine and hydrokinetic technologies.

Fiscal Incentives

Without targeted policies to promote early-stage deployment, producers often lack incentives to develop new technologies at scale and consumers tend to shy away from using emerging products. Tax credits, loan guarantees, and other fiscal incentives targeted at the next generation of renewable technologies can reduce the green premium and drive private sector demand. Well-designed tax incentives should be technology neutral, predictable, flexible, and accessible to historically marginalized communities.

Market Rule Reform

Wholesale power markets in the U.S. were designed around dispatchable fossil fuel and nuclear energy, where fuel and operating costs comprise a meaningful share of the total cost of generation. These markets need to be redesigned to make better use of wind and solar, whose operating and fuel costs are close to zero. The federal government and federally regulated operators of independent systems will play a critical role in reforming wholesale power markets to reflect the contributions of renewable energy.

Permitting Reform

Getting to net-zero emissions across the economy will require a rapid and substantial expansion of our capacity to generate wind and solar power. To enable this expansion, policymakers need to reform federal permitting requirements for new wind and solar plants. Expedited permitting and leasing, especially on low-impact federal lands, will also facilitate increased renewable energy development.

Rapid, Large Scale Deployment

Carbon Pricing

A carbon-pricing system that more accurately conveys the true costs of GHG emissions, such as a carbon tax or a cap-and-trade plan, would drive the rapid deployment of wind and solar power by raising the relative cost of fossil fuels to reflect the environmental harm they cause. In fact, electric power is the economic sector in which carbon pricing can be most effective, because we already have cost-competitive alternatives to fossil fuels. A carbon pricing system should also include design elements or be paired with policies that address other pollutants from fossil fuel combustion, particularly those in historically disadvantaged communities.

Clean Electricity Standard

A power sector-specific policy option is a technology-neutral clean electricity standard (CES). A CES requires electric utilities to generate or procure some portion of their total electricity sales from qualifying clean energy sources. Under this market-based approach, the government sets a target for the share of clean electricity sold, and utilities are free to choose how they meet that target.

A CES offers an alternative or complementary approach to a carbon price for the power sector.

Technology-Neutral Deployment Tax Credit

Tax credits have already successfully enabled the deployment of clean energy technologies—especially wind and solar power. A technology-neutral refundable tax credit for wind, solar, and other clean power generation can further drive the development of new technologies that will bring the power sector closer to net-zero emissions.

Technology-neutral deployment tax credits offer an alternative to a CES or carbon pricing. This mechanism is less economically efficient than a carbon price or a CES and would be most effective if paired with carbon pollution standards.

Additional Electricity Policies