1) Grid Resilience Is Becoming a Tax Policy Fight

Contributor: Max Tuttman, Vice President

What happened: In 2025, grid responsibilities and rising utility costs collided. A widely cited Lawrence Berkeley National Laboratory (LBNL) study revealed that residential customers—especially households already under affordability pressure—are bearing the brunt of recent rate hikes, which have outpaced inflation in many states. These increases are driven largely by necessary investments to harden the grid against climate change, wildfires, and extreme weather. This financial pressure is compounding just as major federal investments, like grants through the Grid Resilience and Innovation Partnerships (GRIP) program, are being clawed back.

Why it matters: This dynamic threatens to derail the energy transition by forcing a false choice between affordability and climate preparedness. Funding climate resilience through electricity rates is regressive—it punishes those with the least ability to pay. As rate hikes become politically untenable, expect messy fights ahead over whether wildfire mitigation and disaster response should be treated as public goods funded through taxes, not grid services funded through bills. Just ask the editors at the Seattle Times. The rate base vs. tax base debate will define energy politics in 2026 and beyond.

2) Affordability Concerns Threaten Utility Rebate Programs

Contributor: Xander Mitchell, Senior Associate

What happened: In 2025, rising electricity bills turned utility customer programs—rebates and incentives for energy efficiency and home electrification—from quiet workhorses of the energy transition into political flashpoints. As affordability concerns intensified, ratepayers and regulators began scrutinizing not just what these programs deliver, but how much they cost to run. In Connecticut, bill increases tied to program costs triggered a ratepayer revolt; to keep customer bills in check, regulators reset charges that paid for state-mandated energy efficiency initiatives. In Massachusetts, regulators slashed $500 million from Mass Save's three-year budget, and a study revealed overhead costs exceeding 30%.

Why it matters: This marks a structural shift. Utility rebate programs can no longer rely on political goodwill—they must prove cost discipline to survive. This change is accelerating a move toward automation for income verification, rebate processing, virtual assessments, and permitting. It’s now become clear that utility rebate programs that reduce administrative overhead will scale faster and face less regulatory resistance. Legacy implementers that can't adapt risk being sidelined.

3) The Transatlantic Alliance That Could Decide the SMR Race

Contributor: Hannah McGrath, Associate

What happened: The Department of Energy (DOE) announced a partnership with the UK on nuclear power, including collaboration on commercial deployment of advanced reactors and small modular reactors (SMRs).

Why it matters: This partnership could determine who wins the SMR race among Western nations. The bigger US headline this year was DOE's pilot program pushing US SMR companies to achieve criticality by next July. However, that milestone can be reached in a test pool, which says little about whether a design is ready for commercial deployment.

The UK has a significant head start on two fronts: streamlined SMR licensing and a government-backed framework to accelerate deployment through the Great British Nuclear competition, where Rolls-Royce is a leading contender. The US has only just begun similar permitting reforms. While American tech giants have thrown money behind their chosen SMR partners, capital alone can't solve design, supply chain, and regulatory bottlenecks. This UK alliance may be the clearest path to scale for Western SMRs, and the industry leader may already be emerging.

4) Geothermal Leasing Just Cracked Open a New Market

Contributor: Tess O'Donnell, Senior Associate

What happened: While the “One Big Beautiful Bill” (H.R. 1) rolled back several clean energy incentives, geothermal heat pumps retained key federal tax support, helping make third-party ownership and leasing models viable—unlocking a new financing pathway for residential deployment.

Why it matters: Geothermal installer Dandelion Energy* recently launched a first-of-its-kind leasing program for new construction in 16 states. Combined with other incentives, homeowners can pay as little as $10-40/month for equipment while saving $500-$1,000+ annually on utility bills.

This is significant because geothermal heat pumps are among the most efficient heating and cooling systems available, but high upfront costs have historically limited adoption. With leasing now in play, geothermal becomes cost-competitive and strengthens the case for all-electric new construction at scale. Electrifying neighborhoods from day one can eliminate the need to extend gas infrastructure and geothermal systems help flatten the winter and summer peak loads that drive costly grid upgrades. With converging pressures around load growth, affordability, and decarbonization, this market is one to watch.

*Disclosure: The Ad Hoc Group is an investor in Dandelion Energy.