With billions in federal incentives at stake, California Gov. Gavin Newsom (D) ordered state agencies to speed permitting of clean energy projects so they can qualify for disappearing federal tax credits. 

His Aug. 29 executive order follows enactment of the federal budget reconciliation law in July that rolled back provisions of the Inflation Reduction Act and shortened eligibility timelines for clean power project tax incentives. “California will continue our decades of progress,” Newsom said in issuing the order. “No other state … has built as much clean energy as fast.” 

Under new federal tax guidance, projects above 1.5 MW must show “significant physical work” by July 4, 2026 and be placed in service before the end of 2027 to qualify. 

Newsom tasked California’s Infrastructure Strike Team and its Energy Working Group to identify qualifying solar and wind energy projects and battery storage projects, and assist agencies to fast-track approvals. He gave agencies 90 days to report back on which projects can meet the compressed federal deadlines.

“As the federal government slashes funds intended to build energy infrastructure that is necessary for grid reliability, Governor Newsom is meeting the moment,” said David Hochschild, chairman of the California Energy Commission, the state’s primary energy policy and planning agency. It is “already expediting several large-scale clean energy and storage projects through the state Opt-In Certification program and looks forward to accelerating our work,” he said.

California added nearly 7 GW of clean energy capacity to the grid in
2024, the largest single-year increase in clean energy
capacity growrh in state history, the executive order
said. Nearly 4.9 GW came from solar since Newsom took office, said the
Solar Energy Industries Association.

But advocacy groups said California still is behind many other states in developing smaller scale solar-plus-storage projects that are interconnected to the state power distribution system, In a letter to Newsom, they offered recommendations to fix gaps in project connection.

Newsom’s order is the latest salvo in the fight between Washington and Sacramento over renewable energy policy. 

Last month, the U.S. Dept. of Transportation canceled nearly $700 million in U.S. port project funding, largely but not totally related to offshore wind development. The revoked funds include $427 million provided to the Humboldt Bay Heavy Lift Terminal in northern California. 

The state has invested more than $30 million to expand the Eureka, Calif., port as an assembly hub for floating wind turbines that would be staged 20 miles offshore in water up to 2,500 ft deep.