While the federal government has spent much of 2025 eliminating climate programs, cutting clean energy funding, and rolling back environmental regulations, states across the country have been exploring a wide range of policy approaches in an effort to meet our climate goals. With the majority of state legislative sessions concluded, it’s important to reflect on what’s been accomplished and where we’ve seen setbacks so far this year.
This article explores key climate and energy policy trends — including both the wins and the hurdles — that have emerged in 2025 across state legislatures and regulatory bodies nationwide. We include insights from Jacqueline Adams, Senior Policy & Research Associate at Climate XChange; Ruby Wincele, Policy & Research Manager at Climate XChange, and Ava Gallo, Climate and Energy Program Manager at the National Caucus of Environmental Legislators.
To stay up to date with Climate XChange’s tracking of state-level climate and energy policy developments, sign up for the State Climate Policy Network to receive biweekly newsletter updates.
To learn more about NCEL’s tracking of climate, energy, and environmental trends across state legislatures this year, see their 2025 Legislative Session Recap.
Powering the Future: Trends in Energy Generation, Transmission, and Distribution
Regulating Data Centers and their Energy Sources
One of the most prominent issues in 2025 legislative sessions centered around how states will address increased energy demand, with U.S. electricity consumption rising for the first time in nearly a decade, driven mostly by data centers and manufacturing. We observed that data center regulation has been a major trend this year.
Thirty-two states proposed 137 pieces of legislation to either: 1) offer incentives to attract data centers to their state, or 2) create guardrails to address some of the associated issues with the new infrastructure, including electricity and water use, grid planning, affordability, and environmental harms. The states with the most data center bills introduced this year are Virginia (30 bills), Minnesota (15), Texas (9), Maryland (9), and New Jersey (8).
Of those 137 proposed bills, 19 were enacted across 14 states — eight established data center incentives, and 11 established guardrails. The most common themes of enacted bills included tax incentives, rates and energy affordability, and grid planning and reliability.
It’s also important to consider the type of energy source used to meet increased data center energy demand. In 11 states, especially in the Southeast and Midwest, we saw a trend of building additional fossil fuel capacity or extending retirement dates of existing plants to power data centers.
Expanding Energy Production and Incentivizing Fossil Fuels
In addition to data center-specific expansions of fossil fuel plants, some states are also passing legislation to more broadly expand and expedite fossil fuel generation. Louisiana (HB 692), Tennessee (HB 1143), and Indiana (SB 178) passed legislation to define natural gas as “clean energy,” and Oklahoma enacted SB 460, which establishes natural gas as the state’s preferred fuel. Indiana’s EO 25-50 directs the Indiana Utility Regulatory Commission (IURC) to evaluate all coal plants in the state and consider extending the life of each plant.
Several states are also implementing an “all of the above” energy approach to build out more energy capacity, regardless of the source. Ohio’s HB 15 aims to accelerate energy development in the state, irrespective of the type of energy. Pennsylvania Governor Shapiro’s proposed Lightning Plan is a comprehensive effort to modernize the state’s energy standards, add new energy sources to the grid, and trigger innovation in technologies including nuclear, renewable energy and battery storage.
Restricting Renewable Energy Deployment
Another growing energy trend is anti-renewable legislation, a policy mirrored all the way up to the federal level with repealed clean energy tax credits in the budget reconciliation bill and the Trump administration’s revocation of wind project permits and solar funding. Clean Tomorrow found that, of the renewable siting legislation introduced this session, bills aiming to restrict renewable energy deployment outnumbered supportive bills by more than two to one.
Twelve anti-renewable bills were enacted across nine states, utilizing stringent siting, permitting, and decommissioning requirements to disincentivize renewables, including:
- Arkansas’ SB 437: Requires stringent siting and permitting regulations for the state’s wind industry, and allows local governments to adopt their own, more stringent regulations.
- Indiana’s SB 425: Establishes Energy Production Zones to streamline the construction of electric generation facilities, specifically excluding wind and solar farms.
- New Hampshire’s HB 682: Removes the Office of Offshore Wind Industry Development from the Office of Energy Innovation, and repeals the Offshore Wind Industry Workforce Training Center Committee and the Offshore and Port Development Commission.
- Montana’s HB 31: Strengthens decommissioning bond requirements for wind and solar facilities; these are heightened financial guarantees a project must provide that cover the cost of restoring the project site to its original state in the event it is decommissioned.
- Utah’s HB 201: Modifies how utility integrated resource plans (IRPs) are evaluated, requiring that utilities adding wind and solar resources to their plans have additional resource capacity — that is, more dispatchable power plants, including fossil-fired generation — to offset variability in renewable supply.
Some states have responded more directly to federal pushback on renewable energy, with Massachusetts delaying wind procurement until 2026 and New Jersey’s Board of Public Utilities (BPU) voting to delay $1 billion in transmission upgrades needed to connect offshore wind energy by 30 months.
Incentivizing Solar Deployment
Many states are still committed to expanding renewables, in particular community solar, which allows residential customers to buy, lease, or subscribe to a shared renewable power system. Across 20 states, 54 of these bills were introduced this year, but only three were enacted in three states, each taking a different approach:
- New Jersey’s S.4530: Adds an additional 3,000 megawatts (MW) of community solar projects in the state.
- Minnesota’s SF 2: Appropriates funding to the Department of Commerce and the public utilities commission (PUC) for support and oversight of the state’s clean energy transition and expands funding for solar access in low-income households. Notably, advocates were able to remove bill language that would have phased out the state’s community solar program, saving 500 MW of planned projects.
- Maryland’s H.B. 1036/S.B. 0931: Aims to increase community solar development by streamlining permitting, creating uniform standards for solar energy projects, requiring local governments to expedite review, and giving the state the authority to approve certain solar farms and energy storage sites over local objections.
The pro-renewable trend we saw this session extends beyond community solar, as 16 states expanded access to solar energy through expedited review and siting, streamlined permitting, new rebates, access for low-income customers, new capacity additions, and expanded funding, including:
- Nevada’s AB 458: Allows developers to install solar panels on low-income multifamily units.
- Hawai‘i’s SB 589: Requires the PUC to set a target of installing 50,000 new customer-sited distributed energy (rooftop solar and battery storage) by 2031.
- Minnesota’s PUC approved Xcel Energy’s IRP: Includes adding 3,200 MW of wind, 400 MW of solar, and 600 MW of battery storage by 2030.
- Massachusetts’ SMART 3.0 program: Requires that all community solar projects include at least 40 percent enrolled low-income customers.
- New Mexico’s HB 2: Appropriates $20 million for the Local Solar Access Fund.
States are also grappling with how to site solar projects while preserving farmland, with opponents concerned about giving up productive farmland while proponents argue for increased agrivoltaics, which allows for co-location of solar generation and farming. Washington’s S.B. 5445 incentivizes distributed energy development by expediting review for certain solar and wind projects and exempting farms that implement agrivoltaics from additional taxation. Utilities may also count new distributed facilities at four times their electrical output for meeting renewable energy credit targets. Maryland’s H.B. 1036/S.B. 0931 gives the state the authority to approve certain solar farms and energy storage sites over local objections.
In addition, states are looking to cut red tape around solar permitting, as the soft costs related to bureaucratic approvals and permitting processes contribute to the inaccessibility of solar energy to average Americans, even as the cost of solar panels themselves have decreased dramatically in recent years. Some states are considering allowing or requiring municipalities to use third-party permitting to speed this process along, a practice known as instant permitting, with Colorado, Florida, and Texas enacting related bills this session.
Expanding Emerging Energy Technologies
Another way states are working to meet rising energy demand and mitigate energy affordability issues is through incentivizing emerging energy technologies, with battery storage and geothermal proving to be particularly popular this session:
- Texas’ HB 4370: Makes geothermal infrastructure eligible for Public Improvement Projects, allowing utilities, municipalities, and other entities to own and operate geothermal infrastructure and to fund geothermal projects with public bonds.
- Virginia’s SB 1316: Expands Virginia’s Renewable Energy Portfolio Standard to include geothermal resources.
- Washington’s HB 1514: Encourages the deployment of low-carbon thermal energy networks by integrating them into existing utility regulations.
- New Mexico’s HB 361: Authorizes the conversion of oil or gas wells into a facility that provides energy storage or develops geothermal energy.
States are also considering how emerging technologies like virtual power plants and demand response programs can help lower the impact of high demand on the grid, including:
- Maine’s LD 186: Authorizes the PUC to implement time-of-use (TOU) rates for electricity customers, which charge different electricity prices throughout the day based on demand and encourage changes in consumer behavior. Importantly, this bill requires the PUC to consider the impacts of a TOU rate on vulnerable populations prior to its implementation.
- Texas’ HB 5323: Creates the Texas Energy Waste Advisory Committee to recommend ways to reduce energy waste, boost efficiency, and improve demand response programs.
- Virginia’s SB 1100: Creates a three-year, 450 MW Virtual Power Plant pilot program — the largest in the nation. After three years, the law directs the pilot to be adopted as a formal program.
Expanding and Modernizing Transmission Infrastructure
In addition to smart generation and distribution policy, states must tackle transmission to get energy where it’s needed reliably and affordably. Advanced transmission technologies (ATTs) and grid-enhancing technologies (GETs) are one way states are tackling this issue, as these technologies work to increase the capacity of existing transmission lines without building new infrastructure. At least 20 states pursued ATTs and GETs legislation this year, including Utah’s enacted HB 212, which requires that during transmission expansion or improvement, distribution companies must conduct cost-effectiveness and timetable analyses of GETs integration, and report to the PSC.
States are also looking into more robust interventions related to transmission, as building out new transmission lines quickly requires smarter siting and permitting laws. One approach allows the co-location of transmission lines within existing rights-of-way, along highways or other already disturbed lands. For example, Colorado’s HB 25-1292, allows transmission developers to locate high voltage transmission lines within a state highway right-of-way.
States are also looking to establish transmission authorities, statewide entities that study and decide how to site and fund transmission development in the state. This is particularly popular in western states, especially in those without a Regional Transmission Organization to make centralized siting and permitting decisions, following the establishment of transmission authorities in Colorado and New Mexico.
Electrifying the Future: Trends in Building and Transportation Decarbonization
Managing the Gas Transition
Alongside efforts to secure a reliable, affordable, and clean power sector, states are also making strides to decarbonize their buildings. This year, states are looking to evaluate their gas system policies, ensure a just transition away from gas, and promote non-gas alternatives.
One trend in recent years relates to the Future of Gas (FOG), a term broadly referring to regulatory proceedings that evaluate the transition from the gas system to clean energy — looking at the long-term costs of the gas system, whether it makes sense to continue subsidizing pipeline expansions and new hookups, and how to reconcile their gas policies with climate targets. More than a dozen states have initiated some sort of FOG proceeding since 2020. Within these FOG proceedings, there have been a number of developments we’ve seen this year, including:
- Washington’s Utilities and Transportation Commission (UTC) order: Requires Puget Sound Energy to consider “non-pipeline alternatives” before making major investments in the gas system.
- Massachusetts’ and Maryland’s orders end gas connection and expansion subsidies by requiring new gas customers to pay for connection costs.
- Maryland’s H.B. 1035/S.B. 0937: Requires gas companies to demonstrate “cost effective” strategies for pipeline replacement.
- Colorado’s HB 25-1280: Requires the PUC to adopt rules for advanced leak detection on natural gas pipelines.
- Massachusetts’ Department of Public Utilities’ orders on Gas System Enhancement Plans aim to reduce total annual repair expenses, slash interest fees passed onto customers, prioritize critical leaks, and incentivize pipe retirement and installation of alternatives like electric heat pumps, which are more aligned with the state’s net zero goals.
States are also looking to transition buildings away from gas use through the use of thermal energy networks (TENs), which are systems of underground pipes that provide heating and cooling to multiple buildings, utilizing the existing gas infrastructure. TENs have grown in popularity since 2021, and this year, 21 bills were introduced across 10 states, with four states enacting legislation:
- New York’s budget (S 3004D) allocates $200M for TENs projects.
- Washington’s HB 1514: Allows utilities to own and operate TENs, and gas utilities can fulfill their “obligation to serve” with TENs, subject to UTC approval.
- Maine’s LD 1619 and Connecticut’s Public Act 25-173 (SB 4) require the states to establish TENs programs.
Heat pumps also continue to prove popular across the country, through various policy mechanisms. Connecticut and Maine are utilizing statewide plans to establish financial incentives for heat pump deployment, New Mexico’s HB 218 creates tax incentives for sustainable energy projects, including heat pumps, and Maine’s LD 585 allows the state to use RTO payments to fund electrification measures like heat pumps. Colorado developed a model energy code that encourages heat pumps, and Massachusetts regulators approved plans from two utilities to lower electricity rates for heat pump owners during the coldest months.
The last trending aspect of managing the gas transition is how states are ensuring a just transition away from fossil fuels, especially for communities and individuals who rely on fossil fuel development or use for jobs, tax revenue, or other benefits. Five states considered bills that would require the development of statewide just transition plans — in Connecticut, Florida, Illinois, Massachusetts, and New York, these would consider the employment implications of the transition away from gas use, create recommendations for workforce development and retraining programs, and more. States are also looking to create just transition advisory bodies, which would guide and oversee these processes, make recommendations on strategy and policy, and identify opportunities for sustainable development.
Electrifying Transportation
Transportation electrification is another state-level trend, especially as the federal government has taken a clear anti-EV stance, including: barring the federal Department of Transportation (DOT) from considering climate change, emissions, and environmental justice (EJ) in their policies; passing three Congressional Review Act (CRA) resolutions to revoke the waivers that allow California to implement zero-emission vehicle sales standards; and repealing federal EV tax credits, among other actions.
In response, states have banded together to reaffirm their commitment to decarbonizing the transportation sector, including 11 states suing the federal administration for revoking California’s waivers and 13 states forming the Affordable Clean Cars Coalition, with goals to collaborate across states, defend state authority under the Clean Air Act, and develop solutions to make clean cars more affordable.
States are also incentivizing EV charging infrastructure deployment, with multiple states announcing new funding, including Colorado ($5M), Indiana ($3.3M), Massachusetts ($46M), New York ($7M), and Connecticut ($50M over 2 years). Maine also resumed its EV rebates, requiring that customers purchase off-peak chargers to receive a rebate.
Financing the Future: Trends in Insurance and Making Polluters Pay
As extreme disasters from climate change increase in frequency and require hefty sums to rebuild from, states have begun to tackle the issue of making polluters pay. Since New York and Vermont passed climate superfund legislation in 2024, 11 states have introduced similar bills to hold fossil fuel companies responsible for the climate-related impacts they have contributed to. Maryland is the only state to have passed such legislation this year, but it was vetoed by the Governor.
States are also considering innovations in insurance policies, aiming to modernize insurance systems to better reflect climate risks and support recovery, especially as insurance companies are leaving states like Florida, Louisiana, Texas, and California due to an increase in natural disasters. Multiple states passed related legislation this year, including the following:
- Colorado’s HB 25-1182: Requires property insurers to transparently disclose and account for wildfire risk models and mitigation actions while also providing policyholders with clear information, appeal rights, and incentives for wildfire risk reduction.
- Oregon’s HB 2081: Directs the Oregon Investment Council and the State Treasurer to take actions to manage the risks of climate change for the Public Employees Retirement Fund, a pension plan specifically designed for individuals employed in the public sector.
- Maine’s LD 1/SP 29: Establishes the State Resilience Office and creates programs to fund improved resiliency from future extreme weather events.
