California takes important step to commercialize fusion energy  

Fusion energy holds the potential to provide an abundant, safe, zero-carbon, firm energy source capable of meeting growing electricity demand while helping to achieve greenhouse gas reduction targets. Significant private sector investment, accompanied by industrial and scientific advancements, have propelled fusion commercialization forward, with most fusion companies expecting to produce commercial energy in the 2030s. As developers decide where to site their projects based on the predictability of the financial, regulatory, and permitting environment, strategic planning will be essential to ensure fusion companies can construct and operate within an established state policy framework.  

Last month, California State Legislature took an important step in this direction, unanimously approving SB 925 to become the first state to initiate a strategic, statewide plan for fusion energy. The bill, signed into law on September 30, 2026, by Governor Gavin Newsom and authored by State Senator Jerry McNerney, directs the California Energy Commission (CEC) to develop a research, development, and commercialization strategy for fusion energy.  

Key elements of the law include:  

• Identifying suitable locations for fusion research, development, and demonstration facilities, including new locations for R&D, and assessments of locations with existing assets which would accelerate the deployment of fusion energy facilities. 

• Advancing economic and workforce development tied to fusion facility siting and expansion and strengthening workforce training and apprenticeship programs. 

• Establishing a roadmap for permitting and licensing, aligned with the Nuclear Regulatory Commission’s rule establishing a regulatory framework for fusion machines, once finalized. 

• Assessing how a fusion energy industry could best support the state’s renewable energy and emissions reductions goals.  

• Ensuring that clean energy financial incentives, programs, and other policy tools are available to fusion energy developers. 

• Including fusion component manufacturers in the AB 205 opt-in permitting mechanism, which would allow developers to opt into the CEC’s streamlined permitting process.  

SB 925 operationalizes several recommendations from CATF’s State Policy Options for Fusion Energy Deployment report, including long-term strategic planning, fusion workforce cultivation, and an efficient permitting process consistent with the fusion regulatory framework that is being finalized by the Nuclear Regulatory Commission. CATF has worked alongside California policymakers and stakeholders to advance fusion commercialization, including through the first statewide convening on fusion energy in November 2025. 

A leader in the fusion energy sector 

California has long been engaged in fusion research and development, hosting the DIII-D National Fusion Facility in San Diego, the largest operational tokamak in North America, and Lawrence Livermore National Laboratory, where scientists conducted the first demonstration of scientific breakeven in a fusion experiment, generating more fusion energy output than laser energy used to drive the reaction. More recently, it has become the birthplace of several fusion energy start-ups. 

With more than $4.5 billion in new funding in the last twelve months, fusion companies have shifted their pathway from away scientific progress toward commercial development. California is particularly well positioned to help advance this transition. 

SB 925 builds on previous work by lawmakers and provides the framework for California to create the financial and regulatory clarity critical to retaining and attracting fusion investment. This includes several measures supporting the state’s fusion ecosystem passed in 2025: 

• SCR 25 recognized California’s public and private fusion energy research and development contributions, signaling to industry and investors a continued commitment to fusion energy development. 

• SB 86 extended the California Alternative Energy and Advanced Transportation Financing Authority sales and use tax exclusion program to include fusion energy facilities. 

• SB 80 established the Fusion Research and Development Initiative within the CEC to provide financial incentives for fusion energy projects. 

Looking ahead 

Under SB 925, the CEC must complete and submit the strategic plan to the Legislature on or before December 31, 2029. The success and impact of SB 925 will depend on adequate funding, straightforward permitting processes, site identification procedures, and coordination with fusion companies, universities, and relevant federal and state agencies.  

Fusion energy development is accelerating, and California is taking steps to prepare for the commercialization and deployment of this emerging energy technology. CATF looks forward to engaging in the plan’s development and implementation, and contributing to discussions around the policies needed to support fusion commercialization.