Introduction and summary
State and local governments have always played a leadership role on climate, but the conditions of 2026 have raised the stakes. The Trump administration has moved to aggressively roll back federal climate protections, cancel offshore wind projects,1 restrict Biden-era infrastructure grants,2 attack state autonomy,3 and eliminate clean energy tax incentives through the Big Beautiful Bill.4 The administration also repealed the Environmental Protection Agency’s endangerment finding, the legal and scientific basis for regulating climate pollution,5 prompting Massachusetts, New York, Connecticut, California, and more than a dozen other states, cities, and counties to challenge the action6 and lean on their own authority to protect public health.
On top of this, millions of Americans are facing higher electric and natural gas bills.7 In addition, the Trump administration’s deep cuts to Medicaid8 and the Supplemental Nutritional Assistance Program9 and its illegally imposed tariffs10 are squeezing the budgets of the American people and state legislatures.11 With only 29 percent12 of Americans able to afford day-to-day expenses such as rent, bills, gas, and groceries without worry and utility rates rising nationwide, state lawmakers are working to ease costs while advancing climate action.
States are governing in a high-pressure moment, and the federal government continues to make meeting the needs of everyday people even more difficult. The U.S.-Israeli war with Iran has added further pressure, with the closure of the Strait of Hormuz driving gas prices to a national average of $4.0313 as of April 23, 2026—the highest price since March 2022,14 following Russia’s invasion of Ukraine. If the conflict persists, even higher costs for groceries, energy, and everyday goods are likely to follow. Due to the United States’ overreliance on fossil fuels and a volatile global market, conflicts abroad can hurt Americans here at home. This comes on the heels of the administration’s top economic adviser stating that consumer pain was “the last of our concerns right now”15 and the president himself describing higher oil prices as an opportunity to generate “big money,” even as price increases drive up costs for consumers.16
In response to the rising prices and the administration’s actions, state and local leaders are moving quickly to reshape17 climate and energy policy around affordability, reliability, and tangible public benefits. This brief examines the direction of key gubernatorial and legislative actions in early 2026, with special attention to executive orders and bills that are moving, have passed at least one chamber, or have been signed into law. It also takes a look at that activity across four key areas: the power sector, transportation, buildings, and industrial policy.
States are shaping the next phase of the clean energy transition
In April 2026, most legislative sessions are still active and underway.18 Rather than treating climate goals as separate from economic ones, governors and state legislatures are integrating them. The policies being advanced this legislative session aim to build out affordable clean energy faster; strengthen utility and data center accountability; and pair climate action with near-term benefits around affordability, public health, extreme weather resilience, and jobs.
The United States Climate Alliance,19 a bipartisan coalition of 24 governors, collectively represents approximately 60 percent of the U.S. economy and 55 percent of the U.S. population. Their states have reduced net greenhouse gas emissions to 24 percent below 2005 levels while growing their collective gross domestic product by 34 percent, faster than the rest of the country.20 This record broadly illustrates the central approach emerging among state leaders in 2026 that aligns emissions reductions with real-time benefits for their constituents.
Power sector: Cutting bills, protecting ratepayers, and building clean
In the power sector, some states are reworking how their electricity system is planned, built, and paid for, with a growing focus on ensuring households benefit from affordable clean energy and energy storage. Much of the policy activity in 2026 is concentrated in this sector.
Expanding clean energy and storage to lower costs
Illinois set the standard earlier this year when Gov. JB Pritzker (D) signed the Clean and Reliable Grid Affordability Act,21 building off the historic Climate and Equitable Jobs Act of 2021.22 The Illinois Power Agency expects the grid affordability act to save customers $13.4 billion over two decades by targeting rising costs driven by regional grid operators—where the price of electricity and rising demand are increasing customer bills—and by establishing a state procurement of 3 gigawatts (GW) of new battery storage by 2030 to help stabilize electricity prices. The law also includes a “storage for all” program that provides incentives for income-qualified households and businesses to install battery systems colocated with solar projects, which could lower energy bills and improve resilience.23
With residential electricity bills spiking, Massachusetts took a similar approach to lower costs while advancing clean energy. In January, Gov. Maura Healey (D) announced $180 million in immediate rate reductions.24 The state applied the relief directly to utility bills by redirecting alternative compliance payments collected under its clean energy programs.25 This cut residential electricity bills by up to 25 percent for two months. The move was followed by an executive order26 that directs the state to procure 10 GW of clean energy and 5 GW of battery storage by 2035. The governor’s office projects up to $10 billion in savings for residents and businesses.
Upon entering office earlier this year, New Jersey Gov. Mikie Sherrill (D) declared a state of emergency on utility costs and signed two related executive orders on day one The first order directed the New Jersey Board of Public Utilities (BPU) to pursue rate relief by pausing new hikes and delivering residential bill credits by the summer. The second order charged the BPU with rapidly expanding solar and battery storage while streamlining the permitting process. In March, the BPU approved the expansion of the state’s community solar program, adding 3 GW of new capacity, with low-income households guaranteed a discount of at least 25 percent on their bills. This expansion was the largest of a state-run program in the country’s history, and the program has already delivered more than $70 million in bill credits to households across the state.27 The governor also signed a measure28 that increases transmission-scale storage across the state, helping store low-cost, clean energy and deploy it during peak demand to reduce price spikes and improve reliability.
In Maryland, Gov. Wes Moore (D) signed H.B. 1532, the Utility RELIEF (Reducing Energy Load Inflation for Everyday Families) Act.29 The bill will mobilize more than $200 million from the state’s Strategic Energy Investment Fund to help accelerate local clean energy development and storage, while aiming to provide targeted bill relief.30 Legislators are also advancing S.B. 0341, the Affordable Solar Act, which would add up to 4 GW of new solar capacity by 2035, promote plug-in solar, and improve grid access.31
In Pennsylvania, Gov. Josh Shapiro (D) is pursuing his “Lightning Plan,”32 a package of bills that largely stalled out during the 2026 legislative session. One key component, however, has advanced: H.B. 500, the PA EDGE (Pennsylvania Economic Development for a Growing Economy) Tax Credit,33 passed the House with bipartisan support. The bill creates new and reforms existing tax credit programs that unlock billions in energy and advanced manufacturing investment, including clean energy technologies.34 Other bills in the package include H.B. 504, the Community Energy Act,35 which would allow customers to subscribe to shared clean energy facilities and receive credits on their electricity bills. Another bill, H.B. 501, the Pennsylvania Reliable Energy Sustainability Standard or the Alternative Energy Portfolio Standards Act,36 would raise the state’s clean energy requirement to 35 percent by 2035.37 The most contested piece of legislation is H.B. 503, the Pennsylvania Climate Emissions Reduction Program (PACER),38 which would put a price on carbon pollution from power plants and return 70 percent of revenues directly to households as electric rebates.39 PACER was designed as the state’s alternative to the Regional Greenhouse Gas Initiative (RGGI); the state exited the program, which charges power plants when they pollute and reinvests those funds back into affected communities, in late 2025 as part of a budget deal with Republican lawmakers.40
Building and modernizing the grid
In Washington, Gov. Bob Ferguson (D) signed a law41 establishing the Washington Electric Transmission Authority, a new state entity empowered to plan, site, and finance transmission infrastructure. This new authority would be independent of the Bonneville Power Administration, which owns roughly 75 percent of the Pacific Northwest’s transmission system and, as a federal agency, is not required to comply with state clean energy mandates.42 Washington joins New Mexico and Colorado, which have established similar authorities, in recognizing that states must take a more active role in building and managing grid infrastructure to meet their clean energy goals.43
In Virginia, under the leadership of new Gov. Abigail Spanberger (D), lawmakers have produced one of the year’s most comprehensive clean energy packages. New policies would streamline solar siting,44 expand storage connections to the grid,45 limit carbon-emitting backup generators at data centers,46 and broaden virtual power plant programs that let utilities draw on distributed clean energy sources such as rooftop solar and home batteries.47 Gov. Spanberger also ordered Virginia to rejoin the RGGI.48 The RGGI has proven benefits: Virginia received more than $827 million49 during its prior membership, with 50 percent directed to programs that saved low-income households an average of $676 per year.50 Virginia is also advancing H.B. 434,51 a bill requiring the commonwealth’s largest utility companies to develop metrics that demonstrate they are using the grid optimally before investing in new upgrades and shifting those costs to ratepayers.
Other states are also advancing policies to improve how the grid is used before building new infrastructure, with a growing focus on advanced transmission technologies. These tools can increase transmission capacity and reduce congestion at a fraction of the cost of new lines, helping lower electricity costs for consumers while improving reliability. Oklahoma’s H.B. 318352 would require utilities, through their integrated resource plans (IRPs), to identify congested areas on the grid and evaluate the use of these technologies, reflecting a broader shift toward strengthening the IRP process and maximizing existing infrastructure before passing new costs on to ratepayers.
Holding large energy users and utilities accountable
Echoing efforts in other states, New York lawmakers are debating how to manage the rapid growth of data centers and their impact on electricity demand. S.B. S854653 would require large load customers such as data centers to fund grid upgrades and clean energy integration. This illustrates the growing concern that large new loads could continue to drive up utility bills for households. But as data centers become more controversial, there are also more bills intended to provide stronger oversight such as S.B. S9144,54 which would impose a moratorium on new data center development while the state studies its potential impacts and implements plans to address energy costs, water use, and pollution. In addition to this, Maine55 is close to advancing an 18-month moratorium on data centers.
Utility accountability is a broader 2026 trend that cuts across party lines. The environmental research group Climate XChange tracked 63 bills in 25 states56 that cover performance-based pay structures for utilities, limits on utility profits and executive pay, prohibitions on using customer rates for political activity, and expanded price transparency requirements. Data center regulation may be moving alongside these bills, with at least 27 states introducing legislation to establish guardrails for data center development such as greater transparency measures or ratepayer protections, according to the National Caucus of Environmental Legislators.57
These “fair share” approaches are emerging in states such as Oregon,58 which last year set a requirement that large energy users be treated as a separate customer class and that the data centers cover the costs they impose on the grid rather than shift them onto households.
Lowering up-front costs and increasing access
Virginia is also adopting a well-tested finance tool to lower the up-front costs of green development by passing S.B. 225, which creates the Virginia Clean Energy Innovation Bank.59 This public institution would finance projects that expand clean energy and reduce greenhouse gas emissions through the strategic deployment of public dollars to attract private investment. More than a dozen states and the District of Columbia have established green banks,60 and the model has a proven track record: Connecticut’s Green Bank, the nation’s oldest, has leveraged $463 million in public funds to attract $2.65 billion in private capital, surpassing $3 billion in total investment and supporting thousands of jobs.61
In Ohio, lawmakers are advancing H.B. 30362 to establish a community energy program that would allow residents to subscribe to local clean energy projects and receive bill credits, potentially lowering costs for families. And in New York, A.B. A6270B63 would streamline permitting for residential solar and battery storage to reduce delays and costs.
Finally, agrivoltaics—placing solar panels on working farmland so that the land is used for both agriculture and for generating solar power—is an emerging way to scale clean energy supply without displacing existing land uses. Farmers can earn clean energy income without taking land out of production. This approach is advancing in 11 states with 30 bills introduced in 2026,64 with Connecticut, Maryland, and New Jersey advancing dual-use community solar and agrivoltaic projects.
Transportation sector: Cutting pollution, protecting health, and cleaning freight
In the sphere of transportation policy, some states are actively building out their electric vehicle (EV) charging stations to address range anxiety and support broader EV adoption. Through state-led deployment of the federally funded National Electric Vehicle Infrastructure program, Texas, for example, has already delivered 14 new fast-charging stations, with 23 more under construction and 28 more in development. The state aims to have 300 EV charging stations ready this year, according to the Center for Environmental Excellence.65 In Virginia, H.B. 122566 sets competition for the industry and allows utilities to build and operate EV charging infrastructure, helping accelerate deployment across the state. These investments aim to increase confidence in long-distance EV travel and expand access across regions. This could lead to more uptake in EVs, helping to decrease vehicle pollution and improve health outcomes for communities.67
Some state lawmakers are also looking to crack down on emissions from warehouses, distribution centers, and freight systems. California’s A.B. 177768 would give the state the authority to require large facilities, such as warehouses and distribution centers, to reduce the pollution generated by the trucks they attract or indirect emissions from vehicles that support their operations, building on local rules that have already reduced pollution from truck traffic and accelerated the shift to cleaner trucks and technologies near ports.69 This would pave the way for a statewide “indirect source rule.”70 To date, indirect source rules have been adopted primarily at the local air district level, most notably by the South Coast Air Quality Management District. Air districts are regional agencies responsible for monitoring and regulating air pollution. Most indirect source rules create a scoring system under which warehouses earn points for actions taken to reduce pollution. Points are how regulators measure whether a warehouse has done enough to reduce pollution. Warehouses that hit the target are fine; those that miss it must pay a penalty.71
In another example, New York’s Clean Deliveries Act72 would require large warehouses—which are disproportionately located in low-income communities and communities of color73—to reduce emissions from the regular truck trips they generate. No state has yet enacted a statewide version of this kind of rule, making 2026 a pivotal year for this approach.74
Legislators in New York also are considering S. 1343, a clean fuel standard,75 which would require fuel providers to reduce the carbon intensity of transportation fuels statewide, accelerating a shift toward electric and other low-carbon vehicle alternatives. The policy targets one of the largest sources of climate and air pollution, with the potential to cut emissions while improving air quality in communities overburdened by transportation-related pollution.
At least seven other states—Illinois, Hawaii, Massachusetts, Minnesota, New Jersey, Pennsylvania, and Vermont—are introducing similar legislation in 2026 modeled on the low-carbon fuel standards already in place in California, Oregon, and Washington. These standards require fuel suppliers to gradually reduce the carbon intensity of the fuels they sell, which they can accomplish by switching to lower-carbon fuels and by supporting electrification, such as through EV charging investment. The standards also direct the revenue from compliance into community health and clean transportation programs.76
More broadly, some states are beginning to rethink how transportation systems are planned and built. In Maryland, the Transportation and Climate Alignment Act of 2026, H.B. 437,77 would require the state to assess major highway expansion projects for their effects on greenhouse gas emissions and vehicle miles traveled and balance them with investments in transit, transit-oriented development, and pedestrian and bicycle infrastructure. In Washington, H.B. 213478 would similarly require regional transportation plans to reduce greenhouse gas emissions and vehicle miles traveled.
Buildings sector: Lowering bills, cleaning the air, and building resilience
Buildings sector policy in 2026 is being tied explicitly to what people pay, how they breathe, and how their homes hold up to extreme weather.
As some states accelerate efforts to decarbonize buildings, Maine Gov. Janet Mills (D) noted in a February 2026 address79 that the state has already exceeded its heat pump installation target, cut reliance on heating oil by nearly 20 percent, and now has the fastest-growing clean energy economy in New England, supporting more than 16,000 jobs.80 That shift aims to lower heating costs and reduce reliance on volatile fossil fuels, particularly during extreme winter weather.
In New Jersey, lawmakers introduced S. 650,81 which would direct the BPU to establish a statewide building electrification and decarbonization program and require utilities to develop multiyear plans to reduce on-site emissions across residential and commercial buildings. This legislation explicitly ties electrification to cost-effectiveness, greenhouse gas reductions, and grid optimization by including incentives for heat pumps and high-efficiency electric appliances. By embedding building decarbonization into utility planning, the state is positioning electrification as a pathway to lower energy costs while reducing pollution.
Virginia has approved the launch of a pilot program for home energy conservation, solar, and storage in H.B. 1062.82 The bill requires American Electric Power and Dominion Energy to create a pilot program modeled after the Energy Efficiency Institute’s Pay As You Save program.83 That program allows customers to pay for energy-saving measures such as HVAC upgrades and other home improvements over time through their utility bill, with energy savings exceeding the cost of the upgrades and resulting in net savings. The bill aims to help households with residents who are low income, elderly, or disabled reduce their energy use84 and utility bills.
Residential solar access is a similarly active area of regulation, with 34 states introducing legislation and at least 31 considering plug-in balcony solar panels that renters can install themselves without rooftop access, according to the National Caucus of Environmental Legislators.85
Following Utah’s 2025 law,86 Maine87 and Virginia88 advanced legislation that included plug-in balcony solar panels. Colorado also approved H.B. 26-1007,89 which promotes the statewide adoption of the portable-scale solar generation devices. The Colorado bill expands households’ access to clean energy technology by making it easier for residents in apartments or similar dwellings to benefit from plug-in solar devices. This bill could help Coloradans lower their utility bills and also encourages the use of “meter collars,” in-home devices that allow for faster interconnection of residents’ solar devices to the grid and avoid the need for expensive electrical upgrades.90
At the same time, states are expanding the use of building performance standards as a central policy tool in 2026, with at least 17 proposals across seven states aimed at setting emissions or energy use limits for existing buildings.91 These policies typically require building owners to track, report, and ultimately reduce emissions over time, shifting the sector from the use of voluntary efficiency programs to enforceable outcomes. Legislative proposals in states such as Minnesota, Massachusetts, and Rhode Island reflect a growing focus on delivering measurable reductions in energy use and pollution from buildings while creating demand for retrofits, electrification, and a skilled clean energy workforce.
New York lawmakers are also advancing a 2026 environmental package92 that includes stricter air pollution standards and a new requirement for large companies to publicly disclose their full greenhouse gas emissions, alongside funding to remediate contaminated sites. These policies are designed to identify major sources of pollution, hold high-emitting sectors accountable, and drive reductions in industrial emissions while improving air quality in overburdened communities.
Thermal energy networks circulate water through shared pipe systems to transfer heat in and out of buildings for temperature regulation, often by using waste heat or geothermal heat,93 and are emerging in 2026 as a next-generation strategy for reducing a building’s carbon emissions. In New York, lawmakers and advocates are pushing for expanded state funding in the 2026 budget cycle to support these systems, alongside ongoing public service commission proceedings to advance utility-led pilot projects.94 Similarly, in Rhode Island, H. 787995 would require utilities to identify and study potential thermal energy network sites, authorize pilot projects, and direct the Public Utilities Commission to establish regulations for these systems. By replacing individual fossil fuel heating and cooling systems with networked infrastructure, thermal energy networks have the potential to lower long-term energy costs, improve air quality, and create new construction and utility jobs, particularly in dense communities where building emissions are concentrated.
Industrial sector: Expanding clean energy manufacturing and strengthening competitiveness
Industrial policy in 2026 is focused on how and where clean industry facilities are built, with states moving to lower costs, attract investment, and strengthen domestic manufacturing to remain competitive.
In Michigan, Gov. Gretchen Whitmer (D) signed an executive directive96 positioning the state as an early mover on geologic hydrogen,97 a domestic energy resource that could help cut emissions in manufacturing by replacing fossil fuels in energy-intensive processes that are difficult to electrify, while supporting thousands of jobs and lowering industrial energy costs. Michigan currently ranks sixth nationally for clean energy jobs and first for energy sector job growth.
In Washington, H.B. 121098 extends tax incentives for clean energy manufacturing facilities including advanced nuclear projects, helping the state compete for large-scale industrial investment while supporting job creation. Washington is also implementing its 2024 Buy Clean and Buy Fair law, with 2026 implementation work and reporting requirements shaping how materials such as steel, concrete, and wood are produced and supporting in-state low-carbon manufacturing.99
In Pennsylvania, H.B. 1556100 would create an Advanced Clean Manufacturing Tax Credit for facilities producing materials and equipment such as clean steel, clean cement, grid modernization equipment, heat pumps, turbines, and hydrogen electrolyzers, complementing the state’s $396 million RISE PA program, which is deploying industrial decarbonization grants through a federal Climate Pollution Reduction Grant award.101 Lawmakers in New York are considering S.B. S9072A,102 which would require large industrial facilities to publicly disclose emissions, helping to establish a baseline for future standards and providing clearer data on industrial performance. And in Utah, H.C.R. 1103 signals state support for advanced nuclear manufacturing and the state’s intent to attract that industry.
In California, A.B. 2516104 would establish the California Grid Manufacturing Initiative to aggregate demand for critical grid components, coordinate procurement, and incentivize in-state manufacturing. Such actions would help secure supply chains and improve the cost and availability of critical grid components, consistent with broader efforts from Gov. Gavin Newsom (D) to strengthen in-state manufacturing and drive job growth.105
Affordability, accountability, and tangible benefits are in vogue
The through line across all four sectors is a shared logic: Climate action in 2026 should be paired with near-term value for people, not just long-term targets. That logic is shaping how policy is being designed.
The data center debate makes this most concrete. As electricity demand surges, states are grappling with how to meet new load without increasing emissions, electric bills for other ratepayers, or pollution. In Illinois, lawmakers are considering the POWER Act,106 which would establish environmental, water, and energy requirements for large data centers, including reporting requirements and safeguards for surrounding communities, while expanding renewable energy procurement and requiring facilities to cover the costs they impose on the grid.
Still, climate impacts and household budgets are colliding most directly because of the insurance crisis. As insurers pull out of high-risk markets due to extreme weather driven by higher fossil fuel use,107 California’s AIR Act108 takes the position that the fossil fuel companies most responsible for driving those risks should help cover the costs. So far in 2026, close to a dozen states have introduced climate accountability or “polluter pays” legislation, building on Vermont’s 2024 Climate Superfund Act109 and New York’s 2024 climate Superfund law,110 both of which require fossil fuel companies to pay for a share of climate damages proportional to their historical emissions.
Job creation is another key through line across clean energy policies that focus on businesses. Clean energy industries support millions of jobs nationwide and continue to grow across sectors such as construction, manufacturing, and energy systems, demonstrating that clean energy policy is delivering both emissions reductions and economic opportunity.111
The central question is how states can best meet rising demand and cut emissions while improving affordability, protecting public health, strengthening resilience to extreme weather, and supporting American jobs. Actions to deliver more clean energy and storage, a modernized grid, an innovative domestic supply chain, and a dynamic workforce all serve each prong of this positive, holistic vision.
Some states are moving in the wrong direction
Not every legislative step is rising to the moment in states. In West Virginia, the legislature stripped all mention of wind and solar from the state’s long-term energy plan and required its Comprehensive Energy Policy to include recommendations for operating coal-fired plants through at least 2050,112 well past the life cycles the utilities themselves have projected. As has been done in other states,113 Louisiana lawmakers advanced legislation114 to shield fossil fuel companies from climate liability, while residents along “Cancer Alley” continue to face some of the highest pollution exposure and climate-driven insurance losses in the country.115 In Florida, H.B. 1217116 would ban local governments from setting their own net-zero or clean energy goals, stripping cities and counties of tools to act even when the state will not. These choices would lock consumers into aging, expensive fossil fuel infrastructure and leave ratepayers more exposed to price volatility and climate risk, not less.
Conclusion
State climate action is moving beyond long-term goals to real-time decisions about clean energy deployment and cost allocation, pollution reduction, electrification, and accountability. The actions advancing across states aim to address questions such as who pays for the grid, whether renters can access solar, whether communities near warehouses breathe cleaner air, whether low-income households can keep the lights on, and whether the companies responsible for decades of fossil fuel emissions will contribute to the cost of recovery. In the face of the Trump administration’s rollback of pollution standards and attacks on clean energy, the choices states make now will shape affordability, resilience to extreme weather, and clean energy growth in the years ahead, with direct impacts on American jobs and working families.
Acknowledgments
The author would like to thank Trevor Higgins, Shannon Baker-Branstetter, Lucero Marquez, Akshay Thyagarajan, Leo Banks, Jamie Friedman, Mike Williams, Jasia Smith, Courtney Federico, Adam Conner, Mona Alsaidi, Chester Hawkins, Bill Rapp, Bianca Serbin, and Cindy Murphy-Tofig of the Center for American Progress; Jacqueline Adams and Ruby Wincele of Climate XChange; and John Carlson of the Clean Air Task Force for their contributions to this report.
Appendix: State climate policy activity in 2026
This appendix provides a snapshot of key state-level climate and clean energy policies introduced, advanced, or enacted in 2026. Organized by sector, the table highlights legislative and executive actions across the power, transportation, buildings, and industrial sectors, along with their status as of the date of publication. It is intended to complement the analysis in this report by offering a consolidated view of how climate policy is evolving across states.