It’s time for a state playbook for fusion energy deployment

As fusion energy moves from the lab to the grid, state policies will be increasingly important in determining how and where the industry takes shape in the United States. In a new policy report, Clean Air Task Force (CATF) offers a menu of state policy options —adaptable to states’ energy and economic priorities—to create the conditions needed to attract and deploy future fusion energy projects.  

Fusion energy refers to the release of energy from the fusing of two atomic nuclei–the same reaction that powers the Sun. The fusion industry has entered a new era of rapid progress. In the last few years, the number of fusion energy companies worldwide has more than quadrupled, driven by record levels of private capital and breakthroughs in enabling technologies such as industrial scale production of high-temperature super conductors and artificial intelligence. Multiple private developers are now putting forward credible plans to connect fusion energy machines to the power grid by the early 2030s.   

States can expect an array of benefits from the deployment of future fusion energy machines.  Their production of clean, firm power may enable the replacement of retiring fossil fuel infrastructure and increase generation to meet load growth. Fusion energy machines could also complement intermittent renewable energy resources to lower energy system costs and improve grid reliability. The abundant availability of fusion fuel can enhance energy security by reducing reliance on imported or constrained resources, while the operational profile of fusion energy machines could make them well suited to power data centers. Beyond energy benefits, fusion energy deployment may drive economic growth—spurring job creation across construction, manufacturing, and supply chains—and position early-mover states as leaders in a globally competitive clean energy market. 

The current landscape of state fusion energy policy 

Although the first commercial fusion energy machine has not yet been connected to the grid, the state policy and regulatory environments of today will determine where companies puts their machines on the grid tomorrow. Over the course of the past year, multiple states took steps to create an enabling policy environment for fusion energy deployment.  

• Connecticut became the fortieth Agreement State on September 30^th “Agreement States” are states with delegated authority from the Nuclear Regulatory Commission to regulate most uses of radioactive materials (including fusion energy machines, but also other industrial and medical uses of radioactive materials). Becoming an Agreement State gives a state significantly more control over regulatory readiness and responsiveness than a state that defers radiological licensing authority over fusion energy to the NRC. 

• Virginia explicitly defined fusion energy in statute, explicitly classifying fusion energy as a “carbon-free” or “clean energy” source. This put fusion alongside solar, wind, hydro, geothermal, and nuclear in the state’s definitions, providing legal clarity for fusion energy projects. 

• Washington passed legislation allowing fusion energy projects to utilize permitting reforms available to other clean energy sources.  

• Wisconsin passed legislation to enable a study identifying possible sites in the state for deployment of fusion energy machines. 

As more states consider how to position themselves for a fusion energy future, the focus will increasingly turn to aligning existing clean energy policies—such as siting processes, permitting requirements, and electricity procurement standards—to include fusion energy as an eligible technology for support.  

State policy options to support fusion energy deployment 

While fusion energy is a new energy technology, states do not need to reinvent the wheel to create an effective policy environment for its commercial deployment. In some areas, fusion energy may require tailored policies, but in most cases, the priority will be ensuring that broader state-level clean energy tools apply to fusion energy.  

Clean Air Task Force’s new policy brief offers 10 options states can use to support fusion energy deployment: 

1. Strengthening State Regulatory Capacity: States can strengthen their regulatory readiness and responsiveness by becoming Agreement States, and if already Agreement States, by ensuring their respective implementing agency is adequately resourced to effectively engage with fusion energy developers throughout the licensing process for fusion energy machines to allow for an efficient and thorough licensing process based on based on proportional, technology-inclusive, and performance-based principles. 

2. Ensuring Efficient Permitting Processes: Efficient permitting processes for the eventual commercial deployment of fusion energy machines will reduce uncertainty for fusion energy developers. 

3. Ensuring Efficient Siting Processes: States can ease siting processes for fusion energy machines using typical steps used to incentivize other large projects, such as feasibility studies, site certification programs, reduced property taxes, and waived permitting fees.  Former fossil fuel sites also present strong opportunities for fusion energy development by offering existing high-capacity grid connections for reuse. States can support such “fusion brightfields” projects with build-ready programs, brownfield remediation incentives, and liability protections.  

4. Clearing Interconnection Queues: States can press for progress at the grid operator level to clear interconnection backlogs so fusion energy machines can deliver power when commercially ready. 

5. Defining Fusion Energy Explicitly in State Statutes: States can define fusion energy in statutes to reduce uncertainty and to clarify which state policies apply to fusion energy.  Furthermore, defining fusion energy in state statutes as a clean energy source can further enable fusion energy to benefit from broader clean energy incentives. 

6. Including Fusion Energy in Clean Energy Standards (CES) and Renewable Portfolio Standards (RPS): States can adopt or amend electricity standards to qualify fusion energy as an eligible energy source. 

7. Creating Fusion Energy Tax Incentives: Offering targeted or technology-neutral tax credits can de-risk private investment and help to attract and retain fusion energy startups and component manufacturers. 

8. Funding and Financing Tools for Fusion Energy: Ensuring fusion energy developers have access to financing tools to bridge early-stage commercialization gaps may encourage them to site in a state. 

9. Establishing Innovation Hubs and Cultivating a Fusion Energy Workforce: Concentrated “fusion hubs” around universities and national laboratories can foster entrepreneurship, strengthen supply chains, and develop the skilled workforce fusion energy ecosystems will require. 

10. Promoting Public Acceptance: Clear communication of fusion energy’s anticipated benefits and operational safety profile as well as active community engagement will be important to ensure public support for fusion energy deployment. 

The road ahead for fusion deployment in states 

As fusion energy moves closer to commercial reality, states have a window of opportunity to prepare. Proactive policy design today can help states position themselves to create an effective environment for fusion energy deployment tomorrow.  

There is no single policy approach that will work for every state, nor do states need to adopt every option outlined in the brief. Instead, the most effective strategy is to support innovation and engage communities, while selecting the policies that best fit each state’s unique circumstances and energy goals. By doing so, and by engaging early with the fusion industry, electric utilities, developers, and other stakeholders, states can position themselves as leaders in the commercial deployment of fusion energy in the coming years. 

To learn more, read the full policy report and executive summary here.