Modernizing Federal Agency Practices
There have been unprecedented levels of federal investment in energy policy over the last several years through the Energy Act of 2020, the Infrastructure Investment and Jobs Act, and the Inflation Reduction Act. This investment included grants, loans, and tax credits to advance early research to the demonstration and commercialization stage of a wide range of energy technologies and practices, with a focus on reducing emissions, developing newer clean energy sources, and creating jobs. While much of the funding was awarded, much also remains unawarded for a variety of reasons, including the sheer number of programs to implement with available government resources.
Fast forward to 2026, and the energy landscape looks very different. Congress eliminated and reduced many incentives, including tax credits for renewables, through the One Big Beautiful Bill Act. But many incentives, particularly the tax credits, remain. Executive actions have shifted to a stated focus on reliability, directing federal resources toward coal and natural gas and other “firm” energy like nuclear, fusion and geothermal while expanding mining and access to critical minerals.
What can the federal government do next to support energy technology innovation? CATF met with members of energy and environmental groups, former agency staff, industry representatives, and philanthropy to discuss this question. These conversations surfaced ideas to optimize government practices to support energy technology innovation.
From these conversations, CATF aggregated a set of recommendations to help federal agencies efficiently deploy energy incentives to maximize impact with existing resources at their disposal – considering staffing, choices in planning and decision making, and resource and communication decisions. These recommendations are summarized below into principles for strategic planning, resource management, and communications.
Modernizing Principles
Strategic Planning
- Identify a narrow list of agency priorities to guide decision making.
- Involve industry early, before programs and NOFOs are established.
Resource Management
- Tailor resources, personnel, and management approaches to project needs.
- Gather diverse stakeholders together to support policy execution.
Communications
- Clarify decision makers and agency leads to streamline communications.
- Tell broader narratives about the benefits of energy innovation and projects.
Recommendations
The following recommendations do not aim to preserve existing energy policies or set a new policy agenda. These recommendations are for federal agencies to enhance the systems and practices that enable energy technology innovation by demonstrating how modernizing principles may be applied to existing federal programs – actionable now and in the future.
| Topic | Recommendations |
|---|---|
| Leadership | Narrow priorities and delegate decisions to empower staff Prioritize staff time and leverage other resources for non-core tasks |
| Messaging | Set and communicate expectations for agency processes and timelines Educate policymakers and the public about the innovation cycle and its beneficial impacts |
| Grants and Loans |
|---|
| Program Design | Design programs with industry input and whole-of-government integration Establish lead points of contact for industry and stakeholders |
| Application Process | Develop tailored NOFOs informed by agency and industry needs Streamline applications to support coordination and financing |
| Program Management | Scale resources to project and stakeholder needs Track outcome-based success metrics that highlight project benefits |
| Communities | Allow communities to decide their own benefits Enable flexible processes for community engagement and benefits |
| Tax Credits |
|---|
| Guidance Process | Prioritize guidance with diverse stakeholder input Give advance notice of the guidance process |
Leadership
Narrow priorities and delegate decisions to empower staff and contractors
Agency leadership sets priorities for staff to work toward a common goal. Establishing a clear, narrow set of priorities helps align agency resources to leadership direction, even as broader ongoing work continues to carry out the full functionality of government.
Agency leadership also clarifies decision-making authority – who will make decisions, who should be consulted, and who is empowered to act. Clarifying ownership of decisions and authorities is necessary to expedite program execution, as are regular check-ins across decision makers to collaborate and report out on progress toward shared objectives.
Prioritize staff time and leverage other resources for non-core tasks
Agencies can prioritize staff time for work that requires government decision making, such as application evaluations and assessing project outcomes. This work necessitates sufficient staffing levels to adequately support government programs.
Tasks like technical assistance and evaluation can be outsourced to contractors. For example, third party evaluation could help to objectively measure the performance of projects against agency objectives. Other agencies or national labs may provide support, if coordinated, to deploy resources.
Leadership example: External resources
The Gateway for Accelerated Innovation in Nuclear (GAIN ) program at Idaho National Lab gives private sector partners access to highly qualified personnel within DOE national laboratories. From testing to data and materials, and engineering to licensing and financing, this program offers a wide range of expertise that can support project development.
Messaging
Set and communicate expectations for agency processes and timelines
Agencies should explain processes and timelines to set reasonable expectations for applicants and stakeholders. The process to reach a project award or conditional commitment, and the design and compliance milestones that must be achieved before a project begins, can be shared to manage expectations. This communication should include clarity with respect to information needed by the agency from applicants and stakeholders and the time frame in which such information should be submitted.
Educate policymakers and the public about the technology innovation cycle and its beneficial impacts
Agencies should educate policymakers and the public about the need for federal investment in the technology innovation cycle, from early-stage research to commercialization. Agencies can show how federal investments in energy technologies have improved people’s lives by highlighting the benefits of past energy programs including jobs, local economic impact, energy delivered, and clean air and public health benefits.
Agencies should also track and share the value of ongoing federal investments in innovative energy projects, leveraging an array of media formats (written case studies, short-form videos, blogs). Policy makers and the public need to understand how projects benefit local economies, jobs, and communities to support current and future investments.
Messaging example: Agency processes
The Office of Energy Dominance Financing, formerly the Loan Programs Office, transparently messages the steps for its application process, including steps toward a conditional commitment and questions to consider such as environmental review and regulatory approvals needed for the LPO process. Messaging this type of program information helps applicants consider whether to apply and understand how to prepare for engagement.
Grants and Loans
Program Design
Design programs with industry input and whole-of-government integration
Early industry input is needed to design programs and processes that align with industry, technology, and market readiness. Industry can inform the timing and structure of programs, such as designing project phases and the timing of community convenings. Input can be gathered through surveys, focus groups, and written comments. Agencies can also conduct surveys after a program has been administered to understand what worked well and what can be improved in future program design. However, balancing industry input with diverse stakeholder views is important to advance other societal interests. One way to balance these interests may be to leverage private sector experience in agencies, through term appointments, to focus on program outcomes – as a member of government, they can consider both private and public interests.
Leadership at other agencies or national labs may provide strategic planning support or use MOUs to expedite permitting or resource sharing in support of programs. Establishing a whole-of-government strategy in program design will avoid delays in interagency processes.
Establish lead points of contact for industry and stakeholders
Agencies should designate a point of contact for internal and external stakeholders, so agency staff know lead contacts to coordinate across topics and programs. Applicants and awardees also need to know who to contact with questions at agency headquarters and relevant field offices. Transparent contacts can streamline engagement during program and project development.
Program design example: Project phases
Several DOE programs take a phased, milestone-based approach to funding. For example, the Advanced Reactor Demonstration Program is working with ten teams to advance technologies toward demonstration of nuclear reactors in stages. This program allows businesses to address technical challenges through public-private partnerships.
Application Process
Develop tailored NOFOs informed by agency and industry needs
Early conversations between agencies and applicants, before issuing a notice of funding opportunity (NOFO), can help align government requirements, industry needs, and expected program outcomes. NOFOs can be streamlined based on these conversations.
Structure application processes to support coordination and financing
Agencies should develop a consistent application process to facilitate coordination across funding programs and provide clarity for applicants. Opportunities to standardize components of application processes could include standardizing language and application components. This consistency could be achieved while allowing flexibility to tailor solicitations for individual programs.
Financing needs may inform solicitations and agreement design. Some agreement types are better suited for late-stage programs – like other transaction agreements.
Application process example: Encourage/discourage processes
Some grant programs at DOE have offered encourage/discourage feedback to save applicants time and effort during the application process. For example, the Office of Science used this approach in a FOA for stimulating competitive research implementation grants. This process could be applied across programs to vet applications and identify projects better suited for other funding programs.
Program Management
Scale resources to project and stakeholder needs
Management approaches, resources, and processes may be tailored to a project. Flexibility, while meeting program requirements, can help focus on outcomes.
Tailoring resources such as staff time and technical assistance based on project needs can also help prioritize government resources. A large project with many stakeholders may benefit from a large stakeholder engagement team. A project by a startup working with the government for the first time may need oversight assistance to understand and meet government requirements.
Track outcome-based metrics that highlight project benefits
Agencies should establish metrics that measure project impact and success in meeting the agency’s program goals. Focusing metrics on the impact and outcomes of a program can help agencies to track and communicate the benefits of federal investments.
Agencies can coordinate early with awardees to identify metrics and project milestones when outcomes may be effectively measured. Measuring progress should include measuring the benefits to people and communities that accrued as a result of a program, where possible.
Program management example: Outcome-based metrics
ARPA-E tracks outcome-based metrics for its programs, which are available on its website. For ARPA-E, outcome-based metrics focus on benefits from early-stage research like patents and licenses that advance early technologies, and success in projects accessing follow-on public and private funding that signal project success.
Community Engagement and Benefits
Allow communities to decide their own benefits
Agencies should be flexible to tailor grants, programs, or partnerships that incorporate or include community benefits the community needs based on community input – and also clarify what qualifies as community benefits with as much flexibility as possible. Early, in-person roundtables would help to understand stakeholder needs. Some may need legacy environmental waste addressed, and others may need workforce development. Understanding community needs early on can allow a project to tailor its benefits to a community’s needs, while mitigating negative impacts. However, communities may prefer standardized payments to self-determine how to spend the resources to benefit the community, particularly if there are timing challenges for project leads and developers to co-develop benefits.
One solution could be to allocate a percentage benefit to communities, or a set budget line for community engagement and benefits, to streamline front-end agreements – whether flexible or dedicated to a particular benefit the project may provide. Then communities can decide how to use the allocated resources.
Enable flexible timing for community engagement and benefits
The grant award negotiation process typically occurs too early in the project development lifecycle for industry to commit to precisely how and when community engagement and community benefits will occur. A commitment to engage communities and to provide community benefits, such as through a community engagement plan specifying the type and timeline for engagement around project milestones, would streamline negotiations and allow industry to tailor the engagement and benefits to fit the project and communities in partnership. Programs may set parameters based on project milestones as a simple model.
Community engagement examples: self-identification and ownership models
Local governments, community leaders, subject matter experts, and state agencies can explore and self-identify preferred technologies and economic development strategies. The DOE’s R-STEP and TSED grants support this model. Communities can also participate in co-ownership structures to get financial benefits from projects.
Tax Credits
Guidance Process
Prioritize guidance with diverse stakeholder input
Treasury guidance determines how industry can demonstrate compliance and access tax credits. Treasury should prioritize guidance where certainty is needed to access tax credits. Industry can help inform guidance priorities and how to best phase guidance.
Treasury should continue to consult with other agencies and stakeholders, including industry and subject matter experts, to ensure guidance is administrable and outcome focused. Treasury can serve as a convenor, bringing diverse stakeholders together to address complex issues.
Give advance notice of the guidance process
Treasury should message the schedule and timing of upcoming guidance to provide industry certainty. Treasury can share plans for the order of guidance it will issue and topics that will be covered. This approach will allow industry and stakeholders to prepare for upcoming comment opportunities and plan investment decisions.
Guidance process example: Transparent processes
To implement the Inflation Reduction Act, Treasury communicated its plans to release guidance in phases. This communication enabled stakeholders to prepare for public comments and gave industry and investors certainty of upcoming timelines.
Federal agencies have a large role in managing federal incentives. Strong agency practices are necessary to realize the benefits of energy policy. Now is the time to make the advancements in government operations necessary for the U.S. to remain a leader in energy technology innovation.
Conclusion
Federal agencies can follow these principles to modernize the systems necessary for delivering energy incentives through improved government practices. The government must also value stability – building on what works and streamlining to offer more certainty and accelerate deployment. By valuing these principles, the federal government can leverage the full weight of its resources to expedite and improve internal processes, thereby unlocking commercialization pathways and advancing energy innovation for timely and beneficial policy outcomes.
