The U.S. federal clean energy innovation pipeline is running at its swiftest clip ever. Reducing funding to a trickle would mean failing to follow through on the technologies we need to compete globally, power the economy, and reduce emissions.

Current Clean Energy Innovation Funding Is Nearing a Cliff

Federal clean energy RDD&D funding has reached levels that finally put the United States on track to win the next decade of clean energy innovation. Crucial investments into nearly every advanced energy technology — from grid-scale storage and renewable energy to nuclear and geothermal — has jumpstarted R&D and launched demonstration programs with the goal of helping these technologies reach commercialization. Between Fiscal Years 2021 and 2022, the U.S. Department of Energy (DOE)’s program budgets fully doubled to more than $28 billion.

However, despite this progress, we are now at risk of losing these gains and falling behind our global competitors. The five-year authorizations for new clean energy innovation programs, passed in the Energy Act of 2020 and funded through bipartisan cooperation on infrastructure bills, begin expiring at the end of this fiscal year (Fig. 1). Absent Congressional action, these pivotal energy programs will fall off a cliff, shrinking or shuttering before they’re able to lock in needed innovation.

Figure 1. Evan Chapman, “DOE Program Budgets Over Time,” Clean Tomorrow, October 2024.

When we faced a similar cliff nearly fifteen years ago, we failed to raise our ambition. Clean energy requires sustained support over long time frames to solve technology and adoption risks. When the government invested $90 billion in the American Recovery and Reinvestment Act for energy innovation, it neglected to provide the subsequent, consistent funding necessary to lock in innovation. Instead, we pulled back — just when capital costs hit record lows. We did not maintain robust support for these technologies, nor the creation of robust clean energy supply chains or supportive infrastructure.

This time, these investments — for the economy and the climate — are non-negotiable. But they’re also non-partisan. It’s time for a new and bolder vision for clean energy innovation.

Clean Energy Technology Can Be Our Competitive Edge

In the past few years, the United States has made historic infrastructure investments. But on clean energy innovation spending, we’re still playing catch-up with our international competitors and partners. And we will continue to lag behind China if we don’t shore up our spending (Fig. 2). China continues to outpace us and the rest of the world in supply chains crucial to the clean energy transition.

The flow of public investment must also reflect the realities of clean energy innovation. A steady pace of dedicated programmatic funding for DOE into the clean energy economy is paramount. If we want a solid investment environment, public dollars need to be the backbone.

Figure 2. International Energy Agency, World Energy Investment 2024: Overview and Key Findings, 6 June 2024.

Clean Energy Innovation Is an Economic Win

Investments into clean energy innovation support economies around the country, providing jobs and lasting opportunity. These investments remain among the most important we can make with public dollars as an enabler of climate progress and economic growth. Accomplishing our clean energy innovation goals and scaling the adoption of advanced energy technology will not only lead to reduced emissions, but also increase opportunities for our economic growth and prosperity.

Communities all around the country recognize the value of investments that improve our energy and are increasingly interested in creating local clean energy innovation economies (Fig. 3). Federal programs supporting the development of technology hubs (Fig. 4) are oversubscribed and should be expanded to include an explicit clean energy focus in future years. If the United States seizes this leadership moment, localized innovation activity can be a backbone of our economy.

Figure 3. U.S. Department of Energy, “Regional Clean Hydrogen Hubs Selections for Award Negotiations,” October 2023.

Figure 4. U.S. Economic Development Administration, “Regional Technology and Innovation Hubs (Tech Hubs),” October 2023

Climate Impacts Will Worsen Without Gains in Energy Innovation

We’re nowhere close to solving the climate challenge. Staving off the worst effects of climate change is a critical goal. The U.S. is already confronting a billion-dollar climate disaster every three weeks, on average; for every additional increment of global warming, mitigation and recovery costs will continue to skyrocket.

The only way to solve this challenge is to establish a more successful, steady, and ambitious innovation pipeline for clean energy. We need a clean energy innovation economy. Creating one requires robust, year-over-year innovation investments for climate progress, because short-term investments don’t lock in innovation. The International Energy Agency estimates that 35% of the carbon emissions reductions necessary to address climate change will come from technologies that haven’t yet reached the market. To avoid the worst climate scenarios and bend the emissions curve (Fig. 5), we must invest in the technologies that make this possible.

To Realize These Benefits, Make the Investments That Matter Most

We need to focus not only on plugging the largest holes in the clean energy innovation pipeline, but also remain pro-active. DOE and other federal agencies are particularly crucial for providing the support that clean energy innovators need and that venture capital and infrastructure investors are unable to fund.

Some pivotal technologies will not commercialize quickly enough without additional near-term, targeted, public funding. For example, grid-scale long-duration storage innovations must undergo more testing and demonstration around the United States to increase adoption, improve quality, and foster a competitive industry. Advanced grid technologies require deployment programs to boost the uptake of commercialized technology. And clean energy manufacturers should continue to access tax credits that help them use electricity from a cleaner grid, while producing power and products with fewer emissions.  

We must not lose sight of the long investment horizon still ahead of us and facing innovative clean energy technologies. Sporadic bursts of funding alone, however substantial, will not bring these innovations to market. Clean Tomorrow will work to raise policymakers’ ambition and lift their gaze to the very edge of the horizon.