Transition Finance Weekly - January 9, 2026

Thanks for reading in 2025… and here’s what’s coming in 2026!

As we begin again in 2026, thank you for reading, sharing, and engaging with Transition Finance Weekly. Last year made one thing clear:

Energy, climate, and extreme weather decisions are no longer abstract. They’re shaping household spending, state politics, and the structure of the economy in real time.

As we head into 2026, here are some big trends we’re watching, which we think will shape what we see over the months to come.

1. The Energy Transition Keeps Accelerating

• Despite political headwinds, clean energy deployment went full speed ahead in 2025, with the world adding nearly 800 GW of renewables, more than in 2024, and U.S. solar still growing even as federal roadblocks put future projects at risk.

• Wind projects struggled most against politics, particularly offshore. But battery storage emerged as the connective tissue of the grid, with advanced storage technologies and distribution models proving their value during reliability events and moments of peak demand.

2. Batteries, Flexibility, and Grid Management Move to Center Stage

• Speaking of batteries: From Chattanooga’s public utility to Northeast heat waves, grid-scale and distributed battery storage helped keep lights on while lowering costs and avoiding new fossil infrastructure.

• In 2026, the question won’t be whether flexible distribution works, it will be how quickly regulators and utilities scale it to solve urgent capacity problems.

3. Large Loads Are Reshaping the Power System and the Politics of Energy

• Data centers and other large corporate loads are bending the demand curve, creating new reliability risks and cost-shifting concerns that are reaching everyday customers through rate hikes and strain on the grid.

• States and regional grid operators are increasingly confronting the question of how to ensure these customers pay their fair share and protect supply availability for the rest of the market, rather than forcing ordinary ratepayers to invest in new peak generation infrastructure they won’t use.

• Large corporate buyers continue to drive significant demand for clean energy as reflected in their public commitments to clean, but as the race for any electron heats up, gas is also ballooning.

4. Climate Economics Are Now Household Economics

• Insurance markets made the climate crisis manifest for families in 2025, as insured losses from climate-driven disasters topped $100 billion for the sixth straight year and backstop programs like California’s FAIR Plan began to buckle under the pressure.

• This means that for families, climate risk is no longer theoretical; it’s being priced directly into insurance premiums and mortgages, and increasingly into state budgets, too. The question is how to shift risk away from the most vulnerable back onto the insurance companies and large polluters who are exacerbating the problem.

5. The Battle Over Corporate Governance and “Anti-ESG” Escalates

• State laws and regulations intended to block rational investor response to climate risks morphed again in 2025, with states like Texas attempting to restrict proxy voting and weaken disclosure (not to mention promoting fossil fuels at every turn).

• With the Trump administration dismantling climate research, mitigation, and response, just as investors and the public need clear and verifiable information on climate risk, materiality, and greenwashing, we can anticipate a more muddled landscape in 2026, and progressive state governments will need to take even more responsibility for keeping America on a climate-aware path.

6. Politics, Affordability, and Energy Are Fully Intertwined

• Election results are increasingly hinging on household energy affordability and other cost-of-living concerns, with Georgia Democrats winning two statewide utility regulator races by historic margins and governors stepping in to tackle grid failures like PJM. The lesson heading into 2026 is simple: energy affordability is a winning political frame, because it affects every household in a tangible and material way.

7. Local Climate Realism: Problem-Solving at Ground Level

• As federal action stalled, cities, states, and private institutions stepped into the breach in 2025, working together to cut renewable bottlenecks, harden infrastructure against escalating climate hazards, and deploy pragmatic solutions like floating solar to lower local energy costs.

• Climate policy became less about ambition and more about execution, driven by officials solving immediate, place-based problems.
  
  Did you miss our feature on Yale Divinity School’s Living Village, a model net-zero, low-impact campus facility? Here it is!

8. Federal Policy Still Matters — But States Are Doing the Work

• In 2025, as the federal government abdicated its responsibilities, state legislators and governors — understanding both the costs of inaction and the benefits of forward motion — took over as the primary engines of clean energy and climate progress.

• Policies like efficiency rebates, targeted solar incentives, and comprehensive packages like Illinois’ CRGA are the future of climate action, at least through the end of 2028, and we should expect this activity to mount in the coming year.

9. Fossil Fuel Influence: Profits Depend on Control

• Fossil fuel companies are relentlessly working to hijack decisionmaking, because in a world in which the economics are against them, regulatory capture is the only way they can extend their profits and prolong their lifespan.

• From coordinated donation strategies that deliver outsized policy returns to opaque, Leonard Leo–linked networks agitating to block transparency and reform, the industry’s influence campaign has become as central to the companies’ strategies as drilling and mining. (And it’s working: the Trump administration is now mandating that inefficient and expensive coal plants remain operating far beyond the point of reason.)

Thanks again for reading in 2025, and we’ll bring you more news, analysis, and insight over the coming year.

We’d love to work with you in 2026! If you’re interested in collaborating, sharing ideas, or partnering on projects, don’t hesitate to reach out.