How States, Cities and Utilities Can Spur Electric Vehicles and Distributed Energy in 2026

How to keep moving forward

With challenges to transportation electrification and clean energy markets expected to continue in the coming year, progress will depend less on direction from the federal government and more from states, cities, utilities and the private sector.  

From CSE’s vantage point as administrators of transportation electrification and clean energy programs across the U.S., we see 2026 as an opportunity for non-federal leadership through programs that make electric vehicles (EVs), EV charging infrastructure (EVI), solar and battery storage more accessible, cost-effective and equitable. 

Here are six opportunities we see for state, city and utility leadership. 

1. Optimize state and utility EV incentive programs    

With the loss of the federal EV tax credit, state and utility incentives have become more important than ever to ensure EVs have a pathway to the market, including reaching low- and moderate-income (LMI) households and communities. In 2026, states and utilities should revisit their current program designs and plans and consider adding or increasing income-qualified rebates.  

CSE administers multiple programs, including CHEAPR  in Connecticut, MOR-EV in Massachusetts and Charge Up New Jersey, that, in addition to their standard rebates, offer $1,500–$3,000 in added incentives  for income-qualified participants. Determining the most cost-effective incentive level to achieve program objectives can be challenging. CSE advocates using modeling tools like the Caret EV Planner to help states and utilities make data-driven decisions to set the right level of incentive to meet their program goals. 

Another way to increase EV affordability, especially for LMI drivers, is to offer rebates to buy or lease a used EV. Used EV rebates also have an outsized impact on emissions since LMI drivers are more likely to be replacing an older, higher-polluting car. Incentive programs CSE administers for California, Connecticut, Delaware, Oregon, Pacific Gas & Electric and San Diego Gas & Electric have already helped nearly 50,000 drivers buy or lease a used EV. 

Another incentive program option to consider: Focus on full-time rideshare drivers, who typically drive two to three times more miles than the average driver. Uber and Lyft both have publicly pledged to make 100% of their U.S. rides zero-emission, but policy support will be needed. Massachusetts offers rebates up to $6,500 for rideshare drivers. California’s program focusing on lower-income rideshare drivers with high annual trip volumes will open later this year and offer significant rebates to switch to an EV.  

Incentives succeed only if people know about them. Partnerships with trusted community-based organizations, along with targeted digital marketing and in-person outreach, can dramatically increase participation in lower income communities that are disproportionately affected by carbon emissions. 

2. Accelerate EV charging deployment

EV charging access is essential to build driver confidence and prepare for the next phase of electrification.  

With National Electric Vehicle Infrastructure (NEVI) funds now available, and the first-round buildout along designated Alternative Fuel Corridors underway, states need siting and deployment plans that meet more customized local needs and prioritize underserved communities. Tools like CSE’s Caret EV Infrastructure Planner help identify optimal charger locations, taking into account existing charging infrastructure, EV registrations, demographics, utility capacity and other datasets.  

To get chargers in the ground quickly, states should set clear expectations for both grantees and contractors. CSE, which administers the largest state EVI project in the nation, the California Electric Vehicle Infrastructure Project (CALeVIP), has found that when installers are required to submit shovel-ready sites with pre-completed utility studies and permits, deployment timelines can shrink by up to 40%. With shovel-ready project requirements for incentive applicants, timelines can be as short as 40 days from the date funds are reserved to the date the charging station is energized. 

 A tracking tool, like CSE’s Construction Project Tracker, can also speed deployment by quickly identifying bottlenecks, such as equipment availability or permitting delays, so that they can be addressed. 

 3. Electrify medium- and heavy-duty fleets 

Though trucks and buses represent a small share of the overall number of vehicles on the road, they produce an outsized percentage of pollution from transportation sources, especially in lower-income communities near ports and freight corridors. With more medium- and heavy-duty vehicle options entering the market, 2026 should be the year states and utilities look for ways to incentivize medium- and heavy-duty electrification. 

Incentives such as ComEd’s Business and Public Sector EV Program and Massachusetts’ MOR-EV Trucks program show how targeted investments can spur rapid fleet transitions and deliver air-quality benefits. 

4. Invest in electrical panel upgrade programs 

Outdated electrical panels, common in older homes and low-income communities, prevent installation of home EV chargers, solar panels and battery energy storage. Upgrading electrical panels from 100-amp to 200-amp service can cost $2,500 to $5,000 or more. State and utility incentives can help make these upgrades more affordable.  

A good example of a successful panel incentive is Southern California Edison’s Charge Ready Home Program, which provides up to $4,200 in rebates to homeowners. So far, the program has incentivized the installation of nearly 4,000 panel upgrades.  

5. Maximize solar and energy storage incentives  

Pairing solar with energy storage gives households and businesses more control over their energy costs, keeps the lights on during power outages and supports grid reliability. As states and utilities plan the next generation of clean energy programs, integrating solar and storage should become standard.  

Two programs CSE currently administers in California, the Solar on Multifamily Affordable Housing Program and the Self-Generation Incentive Program, recently combined solar and storage incentives. 

Incentives alone are not sufficient to achieve the desired level of solar and storage deployment, as permitting complexity remains a barrier to widespread energy storage adoption. California’s Energy Storage Permitting Guidebook, developed by CSE for the California Energy Commission, provides a roadmap for using clear checklists and digital tools to streamline approvals and cut costs. 

6. Support building electrification  

Heating, cooling and hot water account for over 12% of U.S. greenhouse gas emissions. States, cities and utilities can reduce those emissions while improving indoor air quality, energy affordability, and grid flexibility through well-designed building electrification programs.  

One model is California’s new Equitable Building Decarbonization, which CSE administers in the central part of the state. The program will install electric appliances, efficiency measures and related upgrades at no cost to low-income households in targeted under-resourced communities.  

Keep up the momentum  

To continue to make transportation electrification and clean energy solutions accessible to all, government and utility incentive programs and private sector funds will be needed more than ever in 2026 to replace or supplement reduced federal funding and tax incentives.  

CSE will be expanding our efforts on these six opportunities with our existing clients in the coming year and stands ready to help other state energy, environment and transportation officials; policymakers; city leaders and utility executives to decarbonize.