Policy is a critical enabler of scaling renewable thermal technologies in commercial and industrial operations, and states play an especially important role. They influence many of the levers that can enable industrial decarbonization, including utility regulation, state climate goals, and state-specific incentive programs. In addition, state action can complement federal action and provide leadership when federal policy shifts. As companies look to deploy technologies such as industrial heat pumps, thermal energy storage, and solar thermal, state action is essential for accelerating clean heat adoption. Recognizing this, the Renewable Thermal Collaborative (RTC) is deepening its work to facilitate collaboration among states and industrial companies and support effective policy design that can further project implementation.
Spotlight: The 2025 RTC Summit
The 2025 RTC Summit brought together companies, technology developers, government officials, and other stakeholders committed to accelerating the transition to renewable thermal energy. For the first time, the Summit agenda included a dedicated discussion on U.S. state-level policy. RTC welcomed 14 representatives from nine states who were eager to learn, collaborate, and explore how states can catalyze industrial decarbonization. Their participation enriched the experience, sparking new conversations and partnerships that will continue well beyond the event.
To highlight how states are moving from interest to action, the Summit featured a state policy panel with Colin Lee of the California Energy Commission (CEC) and Paul Beamer of the Minnesota Pollution Control Agency (MPCA). Colin discussed CEC’s Industrial Decarbonization and Improvement of Grid Operations Program, known as INDIGO, which supports projects at industrial facilities that benefit the electrical grid and reduce greenhouse gas (GHG) emissions. Paul discussed MPCA’s new Climate Smart Food Systems Industrial Innovation Program, which will provide grant funding for food and beverage manufacturers to receive technical assistance and implement projects that improve energy efficiency and reduce GHG emissions.
The panel offered a window into how states are structuring grant programs, engaging with industry, and supporting solutions that reduce GHG emissions in industrial facilities. Panelists highlighted that states are developing these programs through early and sustained stakeholder engagement, including workshops, public comment opportunities, roundtables, and one-on-one meetings to refine program scope, eligible technologies, and project requirements. This consistent engagement strengthens relationships with industry and helps states design programs that are more effective and responsive to barriers that impact project implementation.
The panel also underscored that financial incentives are essential for enabling industrial decarbonization projects by reducing upfront capital expenditures (CapEx), which is a key barrier for many projects. States including California, Minnesota, Colorado, and New York are using grant programs to lower financial barriers, support early adopters, build confidence in emerging technologies, and generate case studies that provide replicable models for other facilities.
Key Takeaways from State Participants
Following the Summit, RTC staff convened the state representatives who attended to learn their insights from the discussions.
One representative noted that the Summit made it clear that reducing CapEx is only part of the equation, and they need to also consider how to address operational costs in their grant programs. Operational expenditures (OpEx) are a critical factor in whether electrification projects ultimately move forward. The difference between natural gas and electricity prices, often referred to as the “spark gap,” remains a major barrier to industrial electrification. Even when capital support is available, higher electricity rates can make it difficult for facilities to justify switching from natural gas. Addressing these operational costs—for example, through special electricity rates or incentives that cover the difference in operational costs for a defined number of years—can help enable adoption of electric technologies.
State attendees strongly valued the RTC and the Summit as a place to connect with companies to inform their next steps to address industrial emissions. One attendee noted, “So much of policy work is interacting with a small number of stakeholders at a time; it was incredible to get direct perspectives from manufacturers and innovators.” Following the Summit, RTC engaged with state requests to follow up with RTC companies, inform state roadmaps, and welcome additional states into RTC membership. Insights from both RTC Members and Solutions Providers can help states design effective technical assistance and funding programs. In addition, the connections that RTC makes between Members and Solution Providers create a pipeline of projects that are ready when state funding opportunities arise.
Additional Strategies States Can Use to Scale Renewable Thermal
As states look to help facilities become more efficient, deploy innovative technologies, and reduce emissions, they have a range of options beyond financial incentives.
- Technical assistance programs help facilities benchmark performance, identify energy and decarbonization opportunities to position them for long-term success, as well as encourage modernization of plants within the state.
- State utility commissions can influence the economics of electrification by directing utilities to reform rate structures that reward flexible electricity use and by supporting proactive grid and transmission planning that improves the grid’s reliability, capacity, and affordability.
- States can also integrate renewable thermal technologies into their air quality planning and programs to reduce emissions of pollutants from fossil fuel combustion.
Together, these approaches complement grants and tax credits and give states multiple pathways to accelerate industrial decarbonization while advancing broader economic development and clean energy goals.
What’s Next
The Summit highlighted a clear trend: states are eager to innovate, and industry is ready to partner with them. Companies were candid about their operational needs and technical challenges, and state officials were equally candid about the policy levers they can use.
RTC’s state policy work will continue to facilitate engagement between industry and state officials to advance policy that results in implementation of projects, as well as foster collaboration among states to share lessons and replicate effective programs approaches. With the right mix of policy tools and strong state-industry collaboration, states and RTC companies—growing in number and committed to their climate goals, despite the uncertain federal landscape— can help lower barriers, demonstrate solutions, and support a cleaner, more competitive industrial sector.
