You’re out of free articles.
Log in
To continue reading, log in to your account.
Create a Free Account
To unlock more free articles, please create a free account.
Sign In or Create an Account.
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Welcome to Heatmap
Thank you for registering with Heatmap. Climate change is one of the greatest challenges of our lives, a force reshaping our economy, our politics, and our culture. We hope to be your trusted, friendly, and insightful guide to that transformation. Please enjoy your free articles. You can check your profile here .
subscribe to get Unlimited access
Offer for a Heatmap News Unlimited Access subscription; please note that your subscription will renew automatically unless you cancel prior to renewal. Cancellation takes effect at the end of your current billing period. We will let you know in advance of any price changes. Taxes may apply. Offer terms are subject to change.
Subscribe to get unlimited Access
Hey, you are out of free articles but you are only a few clicks away from full access. Subscribe below and take advantage of our introductory offer.
subscribe to get Unlimited access
Offer for a Heatmap News Unlimited Access subscription; please note that your subscription will renew automatically unless you cancel prior to renewal. Cancellation takes effect at the end of your current billing period. We will let you know in advance of any price changes. Taxes may apply. Offer terms are subject to change.
Create Your Account
Please Enter Your Password
Forgot your password?
Please enter the email address you use for your account so we can send you a link to reset your password:
A little insulation goes a long way toward decarbonizing.

When you think about ways to decarbonize, your mind will likely go straight to shiny new machines — an electric vehicle, solar panels, or an induction stove, perhaps. But let’s not forget the low-tech, low-hanging fruit: your home itself.
Adding insulation, fixing any gaps, cracks or leaks where air can get out, and perhaps installing energy efficient windows and doors are the necessary first steps to decarbonizing at home — though you may also want to consider a light-colored “cool roof,” which reflects sunlight to keep the home comfortable, and electric panel and wiring upgrades to support broader electrification efforts.
Getting started on one or multiple of these retrofits can be daunting — there’s lingo to be learned, audits to be performed, and various incentives to navigate. Luckily, Heatmap is here to help.
Cora Wyent is the Director of Research at Rewiring America, where she conducts research and analysis on how to rapidly electrify the entire economy.
Joseph Lstiburek is the founding principal at the Building Science Corporation, a consulting firm focused on designing and constructing energy efficient, durable, and economic buildings.
Lucy de Barbaro is the founder and director of Energy Efficiency Empowerment, a Pittsburgh-based organization that seeks to transform the home renovation process and help low and middle-income homeowners make energy efficiency improvements.
Definitively, yes! When people hear the word “insulation” they often think of how it can protect them from the cold. And while it certainly does do that, insulation’s overall role is to slow the transfer of heat both out of your home when it’s chilly and into your home when it’s hot. That means you won’t need to use your air conditioning as much during those scorching summer days or your furnace as much when the temperatures drop.
Quite possibly! The most definitive way to know if your home could be improved by weatherization is by getting a home energy audit —- more on that below. While a specific level of insulation is required for all newly constructed homes, these codes and standards are updated frequently. So if you’re feeling uncomfortable in your living space, or if you think your heating and cooling bills are unusually high, it’s definitely worth seeing what an expert thinks. And if you’re interested in getting electric appliances like a heat pump or induction stove, some wiring upgrades will almost certainly be necessary.
Energy efficient appliances like electric heat pumps or induction stoves are fantastic ways to decarbonize your life, but serve a fundamentally different purpose than most of the upgrades that we’re going to talk about here. When you get better air sealing, insulation, windows, or doors, what you’re doing is essentially regulating the temperature of your home, making you less reliant on energy intensive heating and cooling systems. And while this can certainly lead to savings on your energy bill and a positive impact on the environment at large, these upgrades will also allow you to simply live more comfortably.
This is the starting point for making informed decisions about any energy efficiency upgrades that you’re considering. During a home energy audit, a certified auditor (sometimes also referred to as an energy assessor or rater or verifier) will inspect your home to identify both the highest-impact and most cost-effective upgrades you can make, including how much you stand to save on your energy bills by doing so.
Wyent told me checking with your local utility is a good place to start, as many offer low-cost audits. Even if your utility doesn’t do energy assessments, they may be able to point you in the direction of local auditors or state-level resources and directories. The Residential Energy Services Network also provides a directory of certified assessors searchable by location, as does the Department of Energy’s Energy Score program, though neither list is comprehensive.
Audits typically cost between $200 and $700 depending on your home’s location, size, and type, as well as the scope of the audit. Homeowners can claim 30% of the cost of their audit on their federal taxes, up to $150. To be eligible, make sure you find a certified home energy auditor. The DOE provides a list of recognized certification programs.
Important: Make sure the auditor performs both a blower door test and a thermographic inspection. These diagnostic tools are key to determining where air leakage and heat loss/gain is occurring.
Your energy audit isn’t the only thing eligible for a credit. The 25C Energy Efficient Home Improvement Credit allows homeowners to claim up to 30% of the cost of a variety of home upgrades, up to a combined total of $1,200 per year. This covers upgrading your insulation, windows, doors, skylights, electrical wiring, and/or electrical panel. Getting an energy audit is also included in this category.
While $1,200 is the max amount you can claim for all retrofits combined, certain renovations come with their own specific limitations. Let’s break it down:
State and local incentives:
Depending on where you live, there may be additional state and local incentives, and we suggest asking your contractor what you are eligible for. But since incentive programs change frequently, it’s a good idea to do your own research too. Get acquainted with Energy Star, a joint program run by the Environmental Protection Agency and the DOE which provides information on energy efficient products, practices, and standards. On Energy Star’s website, you can search by zip code for utility rebates that can help you save on insulation, windows, and electrical work.
“Starting by looking at your local utility programs can be a great resource too, because utilities offer rebates or incentives for weatherizing your home or installing a new roof,” said Wyent.
Everyone wants to minimize the number of times they break open or drill into their walls. To that end, it’s useful to plan out all the upgrades you might want to get done over the next five to 10 years to figure out where efficiency might fit in.
Some primary examples: Installing appliances like a heat pump, induction stove, or Level 2 EV charger (all of which you can read more about in our other guides) often require electrical upgrades. Even if you don’t plan to get any of these new appliances now, pre-wiring your home to prepare for their installation (with the exception of a heat pump — see our heat pump guide for more info on that) will save you money later on.
De Barbaro also notes that if you’re planning to repaint your walls anytime soon, this would also be a convenient time to add insulation, as that involves drilling holes which then need to be patched and repainted anyway. Likewise, if you were already planning to replace your home’s siding, this would be a natural time to insulate. Finally, if you’re planning to get a heat pump in the coming years, getting better insulation now will ensure this system is maximally effective.
Conversely, if you’re cash-strapped, spreading out electrical and weatherization upgrades over the course of a few years allows you to claim the full $1,200 tax credit every year. Whether those tax savings are enough to cover the added contractor time and clean-up costs, though, will depend on the particulars of your situation.
“Come in with a plan and talk to the contractor about everything that you want to do in the future, not just immediately,” said Wyent.
Unlike solar installers, which are often associated with large regional and national companies, the world of weatherization and electrical upgrades is often much more localized, meaning you’ll need to do a bit of legwork to verify that the contractors and installers you come across are reliable.
Wyent told me she typically starts by asking friends, family, and neighbors for references, as well as turning to Google and Yelp reviews. Depending on where you live and what type of work you want done, your local utility may also offer incentives for weatherization and electrification upgrades, and can possibly provide a list of prescreened contractors who are licensed and insured for this type of work.
These questions will help you vet contractors and gain a better understanding of their process regardless of the type of renovation you’re pursuing.
Common wisdom says you should always get three quotes. But that doesn’t mean you should automatically choose the cheapest option. Lstiburek says the old adage applies: “If it sounds too good to be true, it's probably too good to be true.” Be sure that your contractors and installers are properly licensed and insured and read the fine print of your contract. Beyond this, how to find qualified professionals and what to ask largely depends on the type of upgrade you are pursuing. So let’s break it down, starting with the biggest bang for your buck.
Air sealing and insulating your home is usually the number one way to increase its energy efficiency. Energy Star says nine out of 10 homes are underinsulated, and many also have significant air leaks. In general, homes lose more heating and cooling energy through walls and attics than through windows and doors, so air sealing and adding insulation in key areas should be your first priority.
“People don't realize how collectively, small holes everywhere add up. So on average here in Pennsylvania, typically those holes would add up to the surface of three sheets of paper, continuously open to the outdoors,” said de Barbaro.
Determining where air is escaping is the purpose of the blower door test and the thermographic inspection, so after your energy audit you should have a good idea of where to begin with these retrofits. This guide from the Department of Energy is a great resource on all the places in a home one might consider insulating.
Choosing an insulation type:
Every home is different, and the type of insulation you choose will depend on a number of factors including where you’re insulating, whether that area is finished or unfinished, what R-Value is right for your climate, and your budget. You can check out this comprehensive list of different insulation types to learn about their respective advantages and use cases. But when it comes to attic rafters and exterior walls, De Barbaro said that one option rises above the rest.
“The magic word here is dense-packed cellulose insulation!” De Barbaro told me.
This type of insulation (which falls under the “loose fill and blown-in” category) is made from recycled paper products, meaning it has very low embodied carbon emissions. It’s also cheap and effective. For exterior walls and attic rafters, be sure to avoid loose-fill cellulose, as that can settle and become less effective over time — although for attic floors, loose-fill works well. Both are installed by drilling holes into the wall or floor space and blowing the insulation in under pressure.
We recommend discussing all of these options with your contractor, but here are the other materials you’re most likely to come across:
In addition to asking friends, family, and your local utility for contractor recommendations, Energy Star specifically recommends these additional resources where you can find licensed and insured contractors for insulation work.
While air sealing and insulation should definitely be number one on your weatherization checklist, plenty of heat gets lost through windows, doors, and skylights, as well. Single pane glass is a particularly poor insulator, and while fewer houses these days have it, upgrading to double or triple pane windows or skylights can be a big energy saver. Likewise, steel or fiberglass doors are much better insulators than traditional wooden doors.
But be warned: These can be pricey upgrades. The cost of installing windows alone ranges from hundreds of dollars up to $1,500 per window, and many homes have ten or more. It’s unlikely you’ll fully recoup the outlay through your energy savings, so before going about these retrofits, be sure that you’ve taken care of the easy stuff first.
Once you’ve done your research, it’s time to schedule a consultation with an installer, who can help you refine your project needs, discuss design and installation options, and provide you with a quote.
“So if you pick a Marvin window, make sure that you have a Marvin certified installer in your location, installing the Marvin window according to the Marvin instructions.” said Lstiburek.
Insulating your attic floor or your roof rafters is the best way to ensure that your home is sealed off from the elements. But if you live in a hot climate and need a new roof anyway (most last 25 to 50 years), then you might consider getting a cool roof, which can be made from a variety of materials and installed on almost any slope. However, they won’t lead to energy efficiencies in all geographies, so be sure to do your research beforehand!
Last but certainly not least is a retrofit that’s a little different from the rest. Unlike getting insulation, new windows, or a new roof, upgrading your wiring or electric panel doesn’t lead to greater energy efficiency by regulating the temperature of your home. What it does instead is enable greater energy efficiency by making it possible to operate an increasing number of electrified appliances and devices in your house.
For example, getting an electric or induction stove or dryer, a standard heat pump, a heat pump water heater, or an electric vehicle charger will require that you add new electric circuits to support these devices. And as these new loads add up, you may need to install a larger electric panel to support it all.
After sourcing electrician recommendations from family and friends, a good place to turn is Rewiring America’s contractor directory network. (Rewiring America is also a sponsor of Decarbonize Your Life.)Networks in your area can then provide you with a list of qualified electricians.
“Most people are really only using somewhere around 40% of what their current panels space. So you can actually add a fair amount of new circuits to your existing panel and upgrade your wiring while not having to upgrade your panel at all,” Wyent said.
Once you have three quotes in hand, all that’s left to do is evaluate your options, choose a contractor or installer, and sign a contract. Cost will likely be a major factor in the decision, but you’ll also want to ensure that the cheapest quote doesn’t mean corners will be cut. Here’s what to look out for.
Pay close attention to warranties. This applies both to the warranty for the work being performed and to the warranties for the products themselves. If an installation job or a product is well priced but comes with a short warranty, this should give you pause.
Avoid “same day signing specials.” If you’re being rushed into signing a contract, this is also a bad sign. Be sure to read the fine print — most cost estimates should be good for a few weeks at minimum.
Get specific. Your quotes should specify the type of work being performed, the scope of the work, cost (broken down by materials, labor, permits, and other expenses), payment method, and a tentative timeline for completion. A quote is much less formal than a contract, so if some of this information isn’t provided up front, don’t hesitate to ask for clarification so that you can make apples-to-apples comparisons between different contractors.
When you get a contract in hand, double check that:
Then it’s time to sign, sit back, and enjoy the soothing sounds of hammering, drilling, insulation blowing, and wire tinkering, content in knowing that you’re decarbonizing your home down to its very bones!
Now that you’re living comfortably in a maximally energy efficient home, you’re probably wondering when you’ll start seeing all those incentives you researched pay off. First off, know that you must wait until all renovations are complete and paid for to claim your federal tax credit. That means that even if you purchased new windows this year, if you have them installed in 2025, you’ll file for a tax credit with your 2025 return. Here’s how to go about it.
For state and local incentives, check the website for your local utility as well your local and state government and energy office to see what documentation is required. When in doubt, keep all of your records and receipts!
Log in
To continue reading, log in to your account.
Create a Free Account
To unlock more free articles, please create a free account.
With construction deadlines approaching, developers still aren’t sure how to comply with the new rules.
Certainty, certainty, certainty — three things that are of paramount importance for anyone making an investment decision. There’s little of it to be found in the renewable energy business these days.
The main vectors of uncertainty are obvious enough — whipsawing trade policy, protean administrative hostility toward wind, a long-awaited summit with China that appears to have done nothing to resolve the war with Iran. But there’s still one big “known unknown” — rules governing how companies are allowed to interact with “prohibited foreign entities,” which remain unwritten nearly a year after the One Big Beautiful Bill Act slapped them on just about every remaining clean energy tax credit.
The list of countries that qualify as “foreign entities of concern” is short, including Russian, Iran, North Korea, and China. Post-OBBBA, a firm may be treated as a “foreign-influenced entity” if at least 15% of its debt is issued by one of these countries — though in reality, China is the only one that matters. This rule also kicks in when there’s foreign entity authority to appoint executive officers, 25% or greater ownership by a single entity or a combined ownership of at least 40%.
Any company that wants to claim a clean energy tax credit must comply with the FEOC rules. How to calculate those percentages, however, the Trump administration has so far failed to say. This is tricky because clean energy projects seeking tax credits must be placed in service by the end of 2027 or start construction by July 4 of this year, which doesn’t leave them much time left to align themselves with the new rules.
While the Treasury Department published preliminary guidance in February, it largely covered “material assistance,” the system for determining how much of the cost of the project comes from inputs that are linked to those four nations (again, this is really about China). That still leaves the issue of foreign influence and “effective control,” i.e. who is allowed to own or invest in a project and what that means.
This has meant a lot of work for tax lawyers, Heather Cooper, a partner at McDermott Will & Schulte, told me on Friday.
“The FEOC ownership rules are an all or nothing proposition,” she said. “You have to satisfy these rules. It’s not optional. It’s not a matter of you lose some of the credits, but you keep others. There’s no remedy or anything. This is all or nothing.”
That uncertainty has had a chilling effect on the market. In February, Bloomberg reported that Morgan Stanley and JPMorgan had frozen some of their renewables financing work because of uncertainty around these rules, though Cooper told me the market has since thawed somewhat.
“More parties are getting comfortable enough that there are reasonable interpretations of these rules that they can move forward,” she said. “The reality is that, for folks in this industry — not just developers, but investors, tax insurers, and others — their business mandate is they need to be doing these projects.”
Some of the most frequent complaints from advisors and trade groups come around just how deep into a project’s investors you have to look to find undue foreign ownership or investment.
This gets complicated when it comes to the structures involved with clean energy projects that claim tax credits. They often combine developers (who have their own investors), outside investment funds, banks, and large companies that buy the tax credits on the transferability market.
These companies — especially the banks, which fund themselves with debt — “don’t know on any particular date how much of their debt is held by Chinese connected lenders, and therefore they’re not sure how the rules apply, and that’s caused a couple of banks to pull out of the tax equity market,” David Burton, a partner at Norton Rose Fulbright, told me. “It seems pretty crazy that a large international bank that has its debt trading is going to be a specified foreign entity because on some date, a Chinese party decided to take a large position in its debt.”
For those still participating in the market, the lack of guidance on debt and equity provisions has meant that lawyers are having to ascend the ladder of entities involved in a project, from private equity firms who aren’t typically used to disclosing their limited partners to developers, banks, and public companies that buy the tax credits.
“We’re having to go to private equity funds and say, hey, how many of your LPs are Chinese?” David Burton, a partner at Norton Rose Fulbright, told me. This is not information these funds are typically particularly eager to share. If a lawyer “had asked a private equity firm please tell us about your LPs, before One Big Beautiful Bill, they probably would have told us to go jump in the lake,” Burton said.
Still, the deals are still happening, but “the legal fees are more expensive. The underwriting and due diligence time is longer, there are more headaches,” he told me.
Typically these deals involve joint ventures that formed for that specific deal, which can then transfer the tax credits to another entity with more tax liability to offset. The joint venture might be majority owned by a public company, with a large minority position held by a private equity fund, Burton said.
For the public company, Burton said, his team has to ask “Are any of your shareholders large enough that they have to be disclosed to the SEC? Are any of those Chinese?” For the private equity fund, they have to ask where its investors are residents and what countries they’re citizens of. While private equity funds can be “relatively cooperative,” the process is still a “headache.”
“It took time to figure out how to write these certifications and get me comfortable with the certification, my client comfortable with it, the private equity firm comfortable with it, the tax credit buyer comfortable with it,” he told me, referring to the written legal explanation for how companies involved are complying with what their lawyers think the tax rules are.
Players such as the American Council on Renewable Energy hope that guidance will cut down on this certification time by limiting the universe of entities that will have to scrub their rolls of Chinese investors or corporate officers.
“It’d be nice if we knew you only have to apply the test at the entity that’s considered the tax owner of the project,” i.e. just the joint venture that’s formed for a specific project, Cooper told me.
“There’s a pretty reasonable and plain reading of the statute that limits the term ’taxpayer’ to the entity that owns the project when it’s placed in service,” Cooper said.
Many in the industry expect more guidance on the rules by the end of year, though as Burton noted, “this Treasury is hard to predict.”
In the meantime, expect even more work for tax lawyers.
“We’re used to December being super busy,” Burton said. “But it now feels like every month since the One Big Beautiful Bill passed is like December, so we’ve had, like, you know, eight Decembers in a row.”
Deep cuts to the department have left each staffer with a huge amount of money to manage.
The Department of Energy has an enviable problem: It has more money than it can spend.
DOE disbursed just 2% of its total budgetary resources in fiscal year 2025, according to a report released earlier this year from the EFI Foundation, a nonprofit that tracks innovations in energy. That figure is far lower than the 38% of funds it distributed the year prior.
While some of that is due to political whiplash in Washington, there is another, far more mundane cause: There simply aren’t that many people left to oversee the money. Thanks to the Department of Government Efficiency’s efforts, one in five DOE staff members left the agency. On top of that, Energy Secretary Chris Wright shuffled around and combined offices in a Kafkaesque restructuring. Short on workers and clear direction, the department appears unable to churn through its sizable budget.

Though Congress provides budgetary authority, agencies are left to allot spending for the programs under their ambit, and then obligate payments through contracts, grants, and loans. While departments are expected to use the money they’re allocated, federal staff have to work through the gritty details of each individual transaction.
As a result of its reduced headcount, DOE’s employees are each responsible for far more budgetary resources than ever before.
“DOE is facing its largest imbalance in its history,” Alex Kizer, executive vice president of EFI Foundation, told me. In fiscal year 2017, DOE budgeted around $4.7 million per full-time employee. In the fiscal year 2026 budget request, that figure reached $35.7 million per worker — about eight times more.
Part of that increase is the result of the unprecedented injection of funding into DOE from the 2021 Infrastructure Investment and Jobs Act and the 2022 Inflation Reduction Act. The pair of laws, which gave DOE access to $97 billion, comprised the United States’ largest investment to combat climate change in the nation’s history.
The epoch of federally backed renewable energy investment proved to be short-lived, however. Once President Trump retook office last year, his administration froze funds and initiated a purge of federal workers that resulted in 3,000 staffers (about one in five) leaving DOE through the Deferred Resignation Program. The administration canceled hundreds of projects, evaporating $23 billion in federal support.
While the One Big Beautiful Bill Act passed last summer depleted some of the IRA’s coffers and sunsetted many tax credits years early, it only rescinded about $1.8 billion from DOE, according to the EFI Foundation. Much of the IRA’s spending had already gone out the door or was left intact.
This leaves DOE in a strange position: Its budget is historically high, but its staffing levels have suffered an unprecedented drop.

Even before the short-lived Elon Musk-run agency took a chainsaw to the federal workforce, DOE struggled to hire enough people to keep up with the pace of funding demanded by the IRA’s funding deadlines. The Loan Programs Office, for example, was criticized for moving too slowly in shelling out its hundreds of billions in loan authority. According to a report from three ex-DOE staffers that Heatmap’s Emily Pontecorvo covered, the IRA’s implementation suffered from a lack of “highly skilled, highly talented staff” to carry out its many programs.
“The last year’s uncertainty and the staff cuts, the project cancellations, those increase an already tightening bottleneck of difficulty with implementation at the department,” Sarah Frances Smith, EFI Foundation’s deputy director, told me.
One former longtime Department of Energy staffer who asked not to be named because they may want to return one day told me that as soon as Trump’s second term started, funding disbursement slowed to a halt. Employees had to get permission from leadership just to pay invoices for projects that had already been granted funding, the ex-DOE worker said.
While the Trump administration quickly moved to hamstring renewable energy resources, staff were kept busy complying with executive orders such as removing any mention of diversity equity and inclusion from government websites and responding to automated “What did you do last week?” emails.
On top of government funding drying up, Kizer told me that the confusion surrounding DOE has had a “cooling effect on the private sector’s appetite to do business with DOE,” though the size of that effect is “hard to quantify.”
Under President Biden, DOE put a lot of effort into building trust with companies doing work critical to its renewable energy priorities. Now, states and companies alike are suing DOE to restore revoked funds. In a recent report, the Government Accountability Office warned, “Private companies, which are often funding more than 50 percent of these projects, may reconsider future partnerships with the federal government.”
Clean energy firms aren’t the only ones upset by DOE’s about-face. Even the Republican-controlled Congress balked at President Trump’s proposed deep cuts to DOE’s budget in its latest round of budget negotiations. Appropriations for fiscal year 2026 will be just slightly lower than the year before — though without additional headcount to manage it, the same difficulties getting money out the door will remain.
The widespread staff exit also appears to have slowed work supporting the administration’s new priorities, namely coal and critical minerals. LPO, which was rebranded the “Office of Energy Dominance Financing,” has announced only a few new loans since President Biden left office. Southern Company, which received the Office’s largest-ever loan, was previously backed by a loan to its subsidiary Georgia Power under the first Trump administration.
Despite Trump’s frequent invocation of the importance of coal, DOE hasn’t accomplished much for the technology besides some funding to keep open a handful of struggling coal plants and a loan to restart a coal gasification plant for fertilizer production that was already in LPO’s pipeline under Biden.
Even if DOE wanted to become an oil and gas-enabling juggernaut, it may not have the labor force it needs to carry out a carbon-heavy energy mandate.
“When you cut as many people as they did, you have to figure out who’s going to do the stuff that those people were doing,” said the ex-DOE staffer. “And now they’re going to move and going, Oh crap, we fired that guy.”
Will moving fast and breaking air permits exacerbate tensions with locals?
The Trump administration is trying to ease data centers’ power permitting burden. It’s likely to speed things up. Whether it’ll kick up more dust for the industry is literally up in the air.
On Tuesday, the EPA proposed a rule change that would let developers of all stripes start certain kinds of construction before getting a historically necessary permit under the Clean Air Act. Right now this document known as a New Source Review has long been required before you can start building anything that will release significant levels of air pollutants – from factories to natural gas plants. If EPA finalizes this rule, it will mean companies can do lots of work before the actual emitting object (say, a gas turbine) is installed, down to pouring concrete for cement pads.
The EPA’s rule change itself doesn’t mention AI data centers. However, the impetus was apparent in press materials as the agency cited President Trump’s executive order to cut red tape around the sector. Industry attorneys and environmental litigants alike told me this change will do just that, cutting months to years from project construction timelines, and put pressure on state regulators to issue air permits by allowing serious construction to start that officials are usually reluctant to disrupt.
“I think the intended result is also what will happen. Developers will be able to move more quickly, without additional delay,” said Jeff Holmstead, a D.C.-based attorney with Bracewell who served as EPA assistant administrator for air and radiation under George H.W. Bush. “It will almost certainly save some time for permitting and construction of new infrastructure.”
Air permitting is often a snag that will hold up a major construction project. Doubly so for gas-powered generation. Before this proposal, the EPA historically was wary to let companies invest in what any layperson would consider actual construction work. The race for more AI infrastructure has changed the game, supercharging what was already an active debate over energy needs and our nation’s decades-old environmental laws.
Many environmental groups condemned the proposal upon its release, stating it would make gas-powered AI data centers more popular and diminish risks currently in place for using dirtier forms of electricity. Normally, they argue, this permitting process would give state and federal officials an early opportunity to gauge whether pollution control measures make sense and if a developer’s preferred design would unduly harm the surrounding community. This could include encouraging developers to consider alternate energy sources.
“Inevitably agencies have flexibility as to how much they ask, and what this allows them to do is pre-commit in ways that’ll force agencies to take stuff off the table. What’s taken off the table, it’s hard to know, but you’re constraining options to respond to public concerns or recognize air quality impacts,” said Sanjay Narayan, Sierra Club’s chief appellate counsel.
Herein lies the dilemma: will regulatory speed for power sacrifice opportunities for input that could quell local concerns?
We’re seeing this dilemma play out in real time with Project Matador, a large data center proposal being developed in Amarillo, Texas, by the Rick Perry-backed startup Fermi Americas. Project Matador is purportedly going to be massive and Fermi claims its supposed to one day reach 11 GW, which would make it one of the biggest data centers in the world.
Fermi’s plans have focused on relying on nuclear power in the future. But the only place they’ve made real progress so far in getting permits is gas generation. In February, the Texas Commission on Environmental Quality gave Fermi its air permit for building and operating up to 6 gigawatts of gas power at Project Matador. At that time, Fermi was also rooting for relaxed New Source Review standards, applauding EPA in comments to media for signaling it would take this step. The company’s former CEO Toby Neugebauer also told investors on their first earnings call that Trump officials personally intervened to help get them gas turbines from overseas. (There’s scant public evidence to date of this claim and Neugebauer was fired by Fermi’s board last month.)
But now Fermi’s permit is also being threatened in court. In April, a citizens group Panhandle Taxpayers for Transparency filed a lawsuit against TCEQ challenging the validity of the permit. The case centers around whether the commission was right to deny a request for a contested case hearing brought by members of the group who lived and worked close to Project Matador. “Once these decisions are made, they don’t get reversed,” Michael Ford, Panhandle Taxpayers for Transparency’s founder, said in a fundraising video.
This is also a financial David vs. Goliath, as Ford admits in the fundraising video they have less than $2,000 to spend on the case – a paltry sum they admit barely covers legal bills. We’re also talking about a state that culturally and legally sides often with developers and fossil fuel firms.
At the same time, this lawsuit couldn’t come at a more difficult time as Fermi is struggling with other larger problems (see: Neugebauer’s ouster). Eric Allman, one of the attorneys representing Panhandle Taxpayers for Transparency, told me they’re still waiting on a judge assignment and estimated it’ll take about one year to get a ruling. Allman told me legally Fermi can continue construction during the legal challenge but there are real risks. “Applicants on many occasions will pause activity while there is an appeal pending,” he told me, “because if the suit is successful, they won’t have an authorization.”
Aerial photos reported by independent journalist Michael Thomas purportedly show Fermi hasn’t done significant construction since obtaining its air permit. Fermi did not respond to multiple requests for comment on the lawsuit.
Industry attorneys I spoke to who wished to remain anonymous told me it was too early to say whether EPA’s rulemaking would exacerbate local conflicts by making things move faster. “A lot of times the environmental community likes to litigate things in the hope delays will kill a project, so in that regard, this strategy may be harder for them to implement now,” one lawyer told me. “But just because a plant gets a permit doesn’t mean they can build.”
Environmental lawyers, meanwhile, clearly see more potential for social friction in a faster process. Keri Powell of the Southern Environmental Law Center compared this EPA action to xAI’s rapid buildout in Tennessee and Mississippi where the Al company’s construction of gas turbines before it received its permits has only added to local controversy. This new rule would not make what xAI did permissible; this is a different matter. Yet there are thematic similarities between what the company is doing and the new permitting regime, with natural gas generation expanding faster when companies are allowed to start forms of site work before an air permit is issued.
“By the time a permit is issued, the company will be very, very far along in constructing a facility. All they’ll need to do is bring in the emitting unit, and oftentimes that doesn’t entail very much,” she said. “Imagine you’re a state or local permitting agency – your ability to choose something different than what the company already decided to do is going to be limited.”