PATH TO NET ZERO: US state elections could lead to clean energy policy shifts

The upcoming US elections could lead to significant shifts in states' clean energy policies, reflecting the sharp party-line divisions across the country.

This election, to be held Nov. 5, will be one of the largest for state-level legislative races in history, with more than 6,000 seats up for grabs. About 79% of statehouse seats are up for election and 16 states will have all legislative seats on the ballots, mostly being states where Senate terms are 2-year terms.

States where Democrats hold the governorship and majorities in both houses of a legislature, a level of control known as a "trifecta," tend to mandate a renewable portfolio standard or net-zero emission standards. Republican-leaning states and states with Republican trifectas typically prefer that markets and utility companies determine the types of energy sources they want in their generation mix.

The states whose ambitious renewables targets have legal backing are not expected to see much policy change after the upcoming election, barring unlikely major political shifts in the state legislatures, said Morris Greenberg, senior power markets analyst with S&P Global Commodity Insights.

However, Greenberg said, the ability to meet goals in these more aggressive typically Democrat-controlled states could be affected by developments at the federal level, such as changes to the US Inflation Reduction Act or the imposition of tariffs on solar panels and components.

“For states with policies that are not particularly strong but are considering raising renewables targets, like Pennsylvania, there could be an impact if Democrats can retake the legislature,” he said.

Pennsylvania’s House of Representatives is controlled by Republicans, with the Senate and governor’s seat held by Democrats. The state’s clean energy goal is an 18% RPS by 2021 and an 80% greenhouse gas emissions cut from 2005 levels by 2050.

Pennsylvania is also a key swing state in the US presidential election and both the Democratic candidate, Vice President Kamala Harris, and the Republican candidate, former President Donald Trump, have invested much time in the state, efforts that could influence state legislative election results.

Regardless of who controls state legislatures and governorships, nearly 90% of American voters support the IRA's clean energy tax credits, according to the Solar Energy Industries Association earlier in September, citing a poll it had conducted. This support includes 78% of 2020 Trump voters, the SEIA said in a statement.

"Politicians may talk and bluster as the election approaches, but the polling is clear, and a savvy lawmaker will not undermine the billions of dollars in clean energy investments that are flowing into their states and districts,” SEIA President and CEO Abigail Ross Hopper said.

States to watch

One state that could see a shift in political control in its legislature -- and its clean energy policy -- is New Hampshire. The state has a Republican trifecta but a closely divided House at 198 Republicans and 197 Democrats, a closely divided Senate and a governor seat up for election.

The state ranked 48th for overall renewable energy capacity in the second quarter of 2024, according to S&P Global Market Intelligence data, with 217 MW of wind, solar and battery storage generation. Its current clean energy policy calls for a 25.2% RPS by 2025.

New clean energy goals have been introduced in previous legislative sessions but did not make it very far, said Monica Hlinka, a research analyst with Regulatory Research Associates, a group within Commodity Insights.

“A lot of the states that have divided governments where the Republicans or Democrats have control of the House,and it's the different party in the governorship, they don't tend to have a lot of energy legislation enacted or passed, or anything really ambitious,” Hlinka said.

North Carolina's goal of carbon-neutral power by 2050, which was established by an executive order from Governor Roy Cooper, Democrat, could be rescinded if the governor's seat, up for election in November, switches to Republican control.

North Carolina ranks fourth in the US for solar capacity with 6.8 GW and 10th for total renewable capacity with 7.07 GW of wind, solar and battery storage combined. The state had a 12.5% RPS target set for 2021. A party change in the governor seat in Alaska in 2018 similarly resulted in the reversal of an executive goal to reduce emissions by 30% by 2030.

“Goals without legal backing sometimes form the basis of future legislation, but absent that, I don't believe there would be much impact from their withdrawal,” Greenberg said. “Underlying economics and public utility commission makeup have a much larger impact.”

Supermajority shifts

Hlinka highlighted Vermont and Wisconsin as states to watch for possible changes in political control. These states both have a veto-proof majority in their respective legislatures: Vermont has a Democrat so-called “supermajority” with a Republican governor, while Wisconsin has a Republican supermajority and Democrat governor.

In Vermont, the legislature in June managed to pass a 100% RPS by 2035, overcoming Governor Phil Scott’s veto. Scott said the RPS would raise utility rates “likely by hundreds of millions of dollars.”

Should the Democrats lose its supermajority, Vermont could see a slowdown in “ambitious” legislative policies related to energy and utilities, especially as Scott will likely win reelection again due to his high popularity, Hlinka said.

“It would probably be like a stalemate for the next two years if that is the case, unless they're able to get the Republican governor to see their view on these certain policy changes,” she said.

Meanwhile, in Wisconsin, the Republican’s supermajority could be under threat of dissolving as the state will use new legislative district maps in this election. The new maps were introduced by Democrat Governor Tony Evers, who referred to the previous maps as “some of the most gerrymandered maps in the United States.”

“What we're probably going to see this year is not so much the Democrats gaining control of either chamber, but Democrats being able to break the super majority for the Senate and for the House,” Hlinka said. “In terms of energy policy, they'll be able to cancel out overriding vetoes.”

Vermont ranks 45th in the US for total renewable generation capacity with 357 MW, unchanged from a year ago, according to S&P Global Market Intelligence data. Wisconsin ranks 26th in the US for total renewable generation capacity with 2.714 GW.

Republican states hold most of the top spots in a Commodity Insights ranking of state renewable energy capacity, with four of the top five states having Republican trifectas.