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Can solar plus storage fix one of the thorniest problems of the energy transition?

To talk about renewable energy these days is to talk about power lines. “No transition without transmission” has become something of a mantra among a legion of energy wonks. And following the passage of the Inflation Reduction Act, which contains a massive pot of subsidies for non-carbon-emitting power but little in the way of delivering it, legislative and regulatory attention has turned to getting that power from where it’s sunny and windy to where it’s needed.
Hardly a day goes by in which some industry group or environmental nonprofit isn’t assaulting the inboxes of climate journalists like myself with another study or white paper stressing the need for more transmission. But I’ve also recently noticed a newer group of advocates popping up: the battery stans.
Now, virtually everyone in the renewable energy space loves talking about the massive growth and potential of batteries to store power generated by renewables for when it’s needed most. Here the Inflation Reduction Act’s honeypot of subsidies and the long economic trends are working together. The price of batteries really is falling dramatically, and their deployment has been ramped up.
For most people, batteries are a complement to transmission upgrades. But to a much smaller group, the falling prices of solar and batteries may obviate the need for transmission expansion entirely.
Let’s start with the more mild case. As Duncan Campbell, Vice President at Scale Microgrids told me, “If you go deep on power grid expansion modeling studies, they all assume an enormous build-out of transmission well beyond what we’ve done in the past and I think demonstrated to be well beyond the current institutional capacity.” In other words, you can pencil in as much transmission build-out as you want, but the chances we’ll actually do it seem at least short of certain. “It’s quite reasonable to suggest when doing something super ambitious that it’s a good idea to have a diversified approach,” he said.
That diversified approach, for Campbell, includes storage and generation both on the transmission part of the grid — like utility-scale storage paired with solar arrays — and on the distribution side of the grid, like rooftop solar and garage batteries. The latter two examples can also work together as a “virtual power plant” to modulate consumption based on when power is most expensive or cheap and even sometimes send power back to the grid at times of stress.
“At the end of the day it seems undeniably prudent to think about what solutions are going to complement large-scale transmission build-out if we want to meet these goals. Otherwise it’s a concentrated approach that carries a lot of risks,” Campbell told me. “Technologically, VPPs and DER [distributed energy resources] can help. Especially in those worst situations.”
This balanced approach would not actually face much opposition from advocates for a substantial transmission build-out, even if sometimes this “debate” — especially on Twitter, I’m sorry, especially on X — can get polarized and contentious.
“They’re complementary, not competitive,” Ric O’Connell, the executive director of GridLab, told me. “Transmission moves energy around in space, storage moves around in time. You need both.”
O’Connell pointed out that storage in some cases could be thought of a transmission asset, something analogous to the wires and poles that move electricity, where power could be moved on very short time frames to help out with extremely high levels of demand, a lack of generation, or transmission congestion. We’ve seen this already in Texas, where storage has helped take the bite out of extremely high demand recently, and in California, where it has helped alleviate the rapid disappearance of solar power every evening.
“The shorter duration storage stuff is working to address congestion and streamline transmission operations. In that sense you can put it in the same category as a grid enhancing technology,” O’Connell said.
While nearly everyone I talked to was eager to say that storage and transmission could complement each other, even if some leaned on transmission more and others were more bullish on storage and distributed energy, there was one person who actually did represent a clear and polarizing view: Casey Handmer.
Handmer is a Cal Tech trained physicist who used to write software for the Jet Propulsion Laboratory and founded Terraform Industries, an early stage start up that’s looking to develop the “Terraformer,” a solar-powered factory that would create synthetic natural gas. Immodestly, he “aims to displace the majority of fossil hydrocarbon production by 2035.”
More modestly, he describes himself as “effectively a puffed up blogger who runs a pre-revenue (i.e. default dead) startup in an area peripheral (at best) to grid issues,” but is nonetheless, again, immodestly “pretty confident that my analysis is correct,” he told me in an email.
“My views on this matter are unconventional, even controversial. Arguably this is my spiciest hot take on the future of energy,” he wrote on his blog.
He thinks that the falling price of solar and batteries will make large-scale transmission investments unnecessary.
The price declines in battery and solar will continue, allowing people and businesses to throw up solar wherever, pair it with batteries, to the point where solar is “5-15x” overbuilt. That would mean that solar wouldn’t need to be backed up by any kind of “clean firm” power, i.e. a source that can produce carbon-free electricity at any time, like nuclear power, pumped-hydro, green hydrogen, or natural gas with carbon capture and storage.
While extreme, his views are not so, so, so far off from other renewables maximalists, who view solar and battery price declines as essentially inexorable. If they’re right, resource adequacy issues (i.e. that it’s much more sunny in some places than others) could be overcome by just building more cheap solar and installing more batteries.
“Adding 12 hours of storage to the entire U.S. grid would not happen overnight, but on current trends would cost around $500 billion and pay for itself within a few years. This is a shorter timescale than the required manufacturing ramp, meaning it could be entirely privately funded. By contrast, upgrading the U.S. transmission grid could cost $7 trillion over 20 years,” Handmer wrote in July.
As for the case that transmission is needed to get solar power from where it’s sunnier (like southern Europe or the American Southwest) to where it isn’t (Northern Europe, the rest of America), Handmer argues this isn’t really a problem.
“Solar resource quality doesn't matter that much. Solar resource is much more evenly distributed than, say, oil,” he told me. “Almost all humans live close to where their grandparents were able to grow food to live, and crops only grow in places that are roughly equally sunny.” He also argued that “solar is about 1000x more productive in terms of energy produced per unit land used than agriculture,” so building it will be economically compelling in huge swathes of the world.
As he acknowledges, his view is pretty lonely. He seems to yada-yada away what developments in battery technology would be needed to make this all work (although presumably ever-cheapening solar could just charge more lithium-ion batteries). One estimate suggests that to have “the greatest impact on electricity cost and firm generation,” battery storage would have to extend out to 100 hours — about 25X more than they do now.
This is where I say what you’re already thinking. This combination of technofuturism, contrarianism, work experience in the space industry and comfort with back-of-the-envelope math to make strong assertions makes Handmer sound like — and I mean this in the most value-neutral, descriptive way possible — another proponent of the rooftop solar, home battery, electric car future: Elon Musk. (Handmer used to work at the Musk-inspired Hyperloop One).
When I asked him why he’s an admitted outlier on this, he chalked it up to “anchoring bias in the climate space ... before solar and batteries got cheap, analyses showed that increasing the size of the grid was the best way to counter wind intermittency. But when the assumptions and data change, the results change too. The future of electricity is local. As a physicist, I was trained to take unusual observations to their utmost conclusion.”
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Mikie Sherrill used her inaugural address to sign two executive orders on energy.
Mikie Sherill, a former Navy helicopter pilot, was best known during her tenure in the House of Representatives as a prominent Democratic voice on national security issues. But by the time she ran for governor of New Jersey, utility bills were spiking up to 20% in the state, putting energy at the top of her campaign agenda. Sherrill’s oft-repeated promise to freeze electricity rates took what could have been a vulnerability and turned it into an electoral advantage.
“I hope, New Jersey, you'll remember me when you open up your electric bill and it hasn't gone up by 20%,” Sherrill said Tuesday in her inauguration address.
Before she even finished her speech, Sherrill signed a series of executive orders aimed at constraining utility costs and expanding energy production in the state. One was her promised emergency declaration giving utility regulators the authority to freeze rate hikes. Another was aimed at fostering new generation, ordering the New Jersey Board of Public Utilities “to open solicitations for new solar and storage power generation, to modernize gas and nuclear generation so we can lower utility costs over the long term.”
Now all that’s left is the follow-through. But with strict deadlines to claim tax credits for renewable energy development looming, that will be trickier than it sounds.
The One Big Beautiful Bill Act from last summer put strict deadlines on when wind and solar projects must start construction (July 2026), or else be placed in service (the end of 2027) in order to qualify for the remaining federal clean energy tax credits.
Sherrill’s belt-and-suspenders approach of freezing rates and boosting supply was one she previewed during the campaign, during which she made a point of talking not just about solar and battery storage, but also about nuclear power.
The utility rate freeze has a few moving parts, including direct payments to offset bill hikes that are due to hit this summer and giving New Jersey regulators the authority “to pause or modify utility actions that could further increase bills.” The order also instructs regulators to “review utility business models to ensure alignment with delivering cost reductions to ratepayers,” which could mean utilities wind up extracting less return from ratepayers on capital investments in the grid.
The second executive order declares a second state of emergency and “expands multiple, expedited state programs to develop massive amounts of new power generation in New Jersey,” the governor’s office said. It also instructs the state to “identify permit reforms” to more quickly bring new projects online, requests that regulators instruct utilities to more accurately report energy usage from potential data center projects, and sets up a “Nuclear Power Task Force to position the state to lead on building new nuclear power generation.”
This combination of direct intervention to contain costs with new investments in supply, tough language aimed at utilities and PJM, the electricity market New Jersey is in, along with some potential deregulation to help bring new generation online more quickly, is essentially throwing every broadly left-of-center idea around energy at the wall and seeing what sticks.
Not surprisingly, the orders won immediate plaudits from green groups, with Justin Balik, the vice president of action for Evergreen States, saying in a statement, “It is refreshing to see a governor not only correctly diagnose what’s wrong with our energy system, but also demonstrate the clear political will to fix it.”
On Greenland jockeying, Brazilian rare earth, and atomic British sea power
Current conditions: A geomagnetic storm triggered by what’s known as a coronal mass ejection in space could hit severe levels and disrupt critical infrastructure from southern Alabama to northern California • After weekend storms blanketed the Northeast in snow, Arctic air is pushing more snow into the region by midweek • Extreme heat in South America is fueling wildfires that have already killed 19 people in Chile.
Over the weekend, President Donald Trump once again ratcheted up pressure on Denmark and the European Union to consider his bid to seize Greenland. In a post on Truth Social, the president announced punitive 10% tariffs on Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland starting on February 1, with plans to raise the levies to 25% by June. “We have subsidized Denmark, and all of the Countries of the European Union, and others, for many years by not charging them Tariffs, or any other forms of remuneration,” he wrote. “Now, after Centuries, it is time for Denmark to give back — World Peace is at stake!” In response, the EU has threatened to deploy its economic “big bazooka.” Known formally as the anti-coercion instrument, the policy came into force in 2023 to counter China’s attacks on Lithuania, and involves the imposition of sweeping trade sanctions, ousting the aggressor nation’s companies from the world’s second-largest market, and ending intellectual property protections. Economists told the Financial Times that a trade war over Greenland would risk sparking the worst financial crisis since the Great Recession.

Electricity generation is set to grow 1.1% this year and 2.6% in 2027, according to the latest short-term energy outlook report from the federal Energy Information Administration. Despite the Trump administration’s attacks on the industry, solar power will provide the bulk of that growth. The U.S. is set to add 70 gigawatts of new utility-scale solar in 2026 and 2027, representing a 49% increase in operating solar capacity compared to the end of 2025. While natural gas, coal, and nuclear combined accounted for 75% of all generation last year, the trio’s share of power output in 2027 is on track to slip to 72%. Solar power and wind energy, meanwhile, are set to rise from about 18% in 2025 to 21% in 2027.
Still, the solar industry is struggling to fend off the Trump administration’s efforts to curb deployments of what its top energy officials call unreliable forms of renewable power. As Heatmap’s Jael Holzman wrote last month, the leading solar trade association is pleading with Congress for help fending off a “near complete moratorium on permitting.”
Everybody wants to invest in critical minerals — including the Western Hemisphere’s second center of power. Brazil is angling for a trade deal with the U.S. to mine what the Financial Times called its “abundant but largely untapped rare earth deposits.” With tensions thawing between Trump and the government of leftwinger Luiz Inácio Lula da Silva, officials in the Brazilian administration see a chance to broker an agreement on the metals Washington needs for modern energy and defense technologies. “There’s nothing but opportunity here,” one official told the newspaper. “Brazil’s government is open to a deal on critical minerals.”
Northwest of Brazil, in Bolivia, the new center-right government is stepping up efforts to court foreign investors to develop its lithium resources. The country’s famous salt flats comprise the world’s largest known reserve of the key battery metal. But the leftist administration that ruled the Andean nation for much of the past two decades made little progress toward exploiting the resource under state-owned companies. The new pro-Washington government that took power after the October election has vowed to bring in the private sector. In what Energy Minister Mauricio Medinaceli last week called the government’s “first message to investors,” the administration vowed to honor all existing deals with Chinese and Russian companies, according to Mining.com.
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Last month, I told you about how swapping bunker fuel-burning engines for nuclear propulsion units in container ships could shave $68 million off annual shipping costs. That’s got real appeal to the British. Five industrial giants in the United Kingdom — Rolls-Royce, Babcock International Group, Global Nuclear Security Partners, Stephenson Harwood, and NorthStandard — have formed a new group called the Maritime Nuclear Consortium to boost British efforts to commercialize nuclear-powered cargo ships. “Without coordinated U.K. action, the chance to define the rules, create high-skilled jobs and anchor a global supply chain could be lost to faster competitors,” Lloyd's Register, a professional services company in London that provides maritime certifications, said in a statement to World Nuclear News. “Acting now would give the U.K. first-mover advantage, and ensure those standards, jobs and supply chains are built here.”
On the more standard atomic power front, the U.S. has officially inked its nuclear partnership deal with Slovakia, which I wrote about last week.
Sunrun has come out against the nascent effort to harvest the minerals needed for panels and batteries from metal-rich nodules in the pristine depths of the ocean. Last week, America’s largest residential solar and storage company signed onto a petition calling for a moratorium on deep-sea mining. The San Francisco-based giant joins Google, Apple, Samsung, BMW, Volvo, Salesforce, and nearly 70 other corporations in calling for a halt to the ongoing push at a little-known United Nations maritime regulator to establish permitting rules for mining in international waters. As Heatmap’s Jeva Lange has written, there are real questions about whether the potential damage to one of the few ecosystems on Earth left untouched by human development is really worth it. Trump has vowed to go it alone on deep-sea mining if global regulators can’t come to agreement, as I wrote last year. But it’s unclear how quickly the biggest developer in the space, The Metals Company, could get the industry started. As You Sow, the advocacy group promoting the moratorium, said Sunrun’s signature “brings an important voice from the clean energy sector.”
The home electrification company Jetson, which makes smart thermostats and heat pumps, has raised $50 million in a Series A round. Founded less than two years ago, the company pulled in first-time funding from venture firms including Eclipse, 8VC, and Activate Capital, and saw at least two existing investors put in more money. “Heat pumps have worked for decades, but their cost and complexity have put them out of reach of most homeowners,” Stephen Lake, Jetson’s co-founder and chief executive, said in a statement. “We’re removing the friction by making the process digital, fast, and affordable while fully managing the purchase from start to finish. This funding will help us quickly bring this experience to more homeowners across the U.S. and Canada.”
The cost crisis in PJM Interconnection has transcended partisan politics.
If “war is too important to be left to the generals,” as the French statesman Georges Clemenceau said, then electricity policy may be too important to be left up to the regional transmission organizations.
Years of discontent with PJM Interconnection, the 13-state regional transmission organization that serves around 67 million people, has culminated in an unprecedented commandeering of the system’s processes and procedures by the White House, in alliance with governors within the grid’s service area.
An unlikely coalition including Secretary of Energy Chris Wright, Secretary of the Interior Doug Burgum, and the governors of Indiana, Ohio, Virginia, West Virginia, and Tennessee (Republicans), plus the governors of Maryland, Kentucky, Pennsylvania, Delaware, Illinois, Michigan, New Jersey, and North Carolina (Democrats) — i.e. all 13 states of PJM — signed a “Statement of Principles” Friday demanding extensive actions and reforms to bring new generation onto the grid while protecting consumers.
The plan envisions procuring $15 billion of new generation in the region with “revenue certainty” coming from data centers, “whether they show up and use the power or not,” according to a Department of Energy fact sheet. This would occur through what’s known as a “reliability backstop auction,” The DOE described this as a “an emergency procurement auction,” outside of the regular capacity auction where generation gets paid to be available on the grid when needed. The backstop auction would be for new generation to be built and to serve the PJM grid with payments spreading out over 15 years.
“We’re in totally uncharted waters here,” Jon Gordon, director of the clean energy trade group Advanced Energy United, told me, referring to the degree of direction elected officials are attempting to apply to PJM’s processes.
“‘Unprecedented,’ I feel, is a word that has lost all meaning. But I do think this is unprecedented,” Abraham Silverman, a Johns Hopkins University scholar who previously served as the New Jersey Board of Public Utilities’ general counsel, told me.
“In some ways, the biggest deal here is that they got 13 governors and the Trump administration to agree to something,” Silverman said. “I just don't think there's that many things that [Ohio] Governor [Mike] DeWine and or [Indiana] Governor [Mike] Braun agree with [Maryland] Governor [Wes] Moore.”
This document is “the death of the idea that PJM could govern itself,” Silverman told me. “PJM governors have had a real hands off approach to PJM since we transitioned into these market structures that we have now. And I think there was a real sense that the technocrats are in charge now, the governors can kind of step back and leave the PJM wrangling to the public service commissions.”
Those days are over.
The plan from the states and the White House would also seek to maintain price caps in capacity auctions, which Pennsylvania Governor Josh Shapiro had previously obtained through a settlement. The statement envisions a reliability auction for generators to be held by September of this year, and requested that PJM make the necessary filings “expeditiously.”
Shapiro’s office said in a statement that the caps being maintained was a condition of his participation in the agreement, and that the cost limit had already saved consumers over $18 billion.
The Statement of Principles is clear that the costs of new generation procured in the auction should be allocated to data centers that have not “self-procured new capacity or agreed to be curtailable,” a reference to the increasingly popular idea that data centers can avoid increasing the peak demand on the system by reducing their power usage when the grid is stressed.
The dealmaking seems to have sidestepped PJM entirely, with a PJM spokesperson noting to Bloomberg Thursday evening that its representatives “ were not invited to the event they are apparently having” at the White House. PJM also told Politico that it wasn’t involved in the process.
“PJM is reviewing the principles set forth by the White House and governors,” the grid operator said in a statement to Heatmap.
PJM also said that it would be releasing its own long-gestating proposal to reform rules for large load interconnection, on which it failed to achieve consensus among its membership in November, on Friday.
“The Board has been deliberating on this issue since the end of that stakeholder process. We will work with our stakeholders to assess how the White House directive aligns with the Board’s decision,” the statement said.
The type of “backstop procurement” envisioned by the Statement of Principles sits outside of PJM’s capacity auctions, Jefferies analysts wrote in a note to clients, and “has been increasingly inevitable for months,” the note said.
While the top-down steering is precedent-breaking, any procurement within PJM will have to follow the grid’s existing protocols, which means submitting a plan and seeking signoff from the Federal Energy Regulatory Commission, Gordon told me. “Everything PJM does is guided by their tariffs and their manuals,” he said. “They follow those very closely.”
The governors of the PJM states have been increasingly vocal about how PJM operates, however, presaging today’s announcement. “Nobody really cared about PJM — or even knew what they PJM was or what they did — until electric prices reached a point where they became a political lightning rod,” Gordon said.
The Statement is also consistent with a flurry of announcements and policies issued by state governments, utility regulators, technology companies, and the White House this year coalescing around the principle that data centers should pay for their power such that they do not increase costs for existing users of the electricity system.
Grid Strategies President Rob Gramlich issued a statement saying that “the principle of new large loads paying their fair share is gaining consensus across states, industry groups, and political parties. The rules that have been in place for years did not ensure that.”
This $15 billion could bring on around 5.5 gigawatts of new capacity, according to calculations done by Jefferies. That figure would come close to the 6.6 gigawatts PJM fell short of its target reserve margin after its last capacity auction, conducted in December.
That auction hit the negotiated price caps and occasioned fierce criticism for how PJM manages its capacity markets. Several commissioners of the Federal Energy Regulatory Commission have criticized PJM for its high capacity prices, low reserve margin, and struggles bringing on new generation. PJM’s Independent Market Monitor has estimated that planned and existing data center construction has added over $23 billion in costs to the system.
Several trade and advocacy groups pointed out, however, that a new auction does not fix PJM’s interconnection issues, which have become a major barrier to getting new resources, especially batteries, onto the grid in the PJM region. “The line for energy projects to connect to the power grid in the Mid-Atlantic has basically had a ‘closed for maintenance’ sign up for nearly four years now, and this proposal does nothing to fix that — or any of the other market and planning reforms that are long overdue,” AEU said in a statement.
The Statement of Principles includes some language on interconnection, asking PJM to “commit to rapidly deploying broader interconnection improvements” and to “achieving meaningful reductions in interconnection timelines,” but this language largely echoes what FERC has been saying since at least its Order No. 2023, which took effect over two years ago.
Climate advocacy group Evergreen Action issued a statement signed by Deputy Director of State Action Julia Kortrey, saying that “without fixing PJM’s broken interconnection process and allowing ready-to-build clean energy resources onto the grid, this deal could amount to little more than a band aid over a mortal wound.”
The administration’s language was predictably hostile to renewables and supportive of fossil fuels, blasting PJM for “misguided policies favored intermittent energy resources” and its “reliance on variable generation resources.” PJM has in fact acted to keep coal plants in its territory running, and has for years warned that “retirements are at risk of outpacing the construction of new resources,” as a PJM whitepaper put it in 2023.
There was a predictable partisan divide at the White House event around generation, with Interior Secretary Burgum blaming a renewables “fairy tale” for PJM’s travails. In a DOE statement, Burgum said “For too long, the Green New Scam has left Mid-Atlantic families in the dark with skyrocketing bills.”
Shapiro shot back that “anyone who stands up here and says we need one and not the other doesn’t have a comprehensive, smart energy dominance strategy — to use your word — that is going to ultimately create jobs, create more freedom and create more opportunity.”
While the partisan culture war over generation may never end, today’s announcement was more notable for the agreement it cemented.
“There is an emerging consensus that the political realities of operating a data center in this day and age means that you have to do it in a way that isn't perceived as big tech outsourcing its electric bill to grandma,” Silverman said.
Editor’s note: This article originally misidentified the political affiliation of the governor of Kentucky. It’s been corrected. We regret the error.