How Ava is Responding to an Evolving Federal Policy Environment
November 13, 2025
A Message from Howard Chang, CEO of Ava Community Energy
Over the past ten months, the clean energy industry has experienced a whiplash of changes stemming from policy decisions coming out of Washington. In contrast to federal policies put in place over the previous decade, recent actions by Congress and the Administration have created new obstacles for renewable energy deployment, electrification, and the future of the electric power industry, leaving many feeling unsettled about the future.
As the East Bay and the Central Valley’s not-for-profit public electricity provider, Ava understands those concerns. During my time as CEO, I’ve made it a priority to ensure that the Agency is prepared to face these challenges and is always in a position to serve our customers with clean, reliable energy at competitive rates. I’m proud to say that Ava is still offering our Bright Choice plan, which gives customers a discount compared to PG&E’s generation rate, and is on track to meet our goal of providing 100% carbon-free electricity to all customers by 2030. We have no plans to waver from this commitment.
But that doesn’t mean there won’t be challenges ahead. Recent changes in federal policy—including the termination of clean energy tax credits, shifting tariff rates and federal agency guidance, and restrictions on wind and solar development on public lands—have injected more instability and uncertainty into the energy sector, putting upward pressure on electricity prices in California. This dynamic has placed added urgency on Ava and other providers to find new and innovative ways to meet the growing demand for electricity while saving customers money. It won’t be easy, but Ava is rolling up our sleeves and doing the hard work to get this done.
As we near the end of 2025, I wanted to take a moment to identify some of the key federal policy changes impacting Ava and our customers, and highlight some of the ways Ava is responding.
Major Federal Policy Changes
In July, President Trump signed the One Big Beautiful Bill Act (H.R. 1) into law, a far-reaching piece of legislation that, among many other things, significantly curtailed federal tax incentives for wind and solar energy production, electric vehicle (EV) purchases, home energy efficiency upgrades, and residential solar and battery systems—many of which were either established or expanded by the 2022 Inflation Reduction Act (IRA).
Under H.R. 1, taxpayers were given a much smaller window of time to access these credits. EV purchase incentives expired at the end of September 2025, and other clean energy credits for individuals will expire either at the end of this year or mid-2026. (You can find a full breakdown of the expiring tax credits for individuals in our August 2025 Direct Current newsletter.) H.R. 1 also amended the clean energy Investment Tax Credit (ITC) and Production Tax Credit (PTC) so that utility-scale wind and solar projects no longer qualify for federal subsidies if they’re built after July 4, 2026, or with too many components that originate from a “foreign entity of concern,” including China.
Adding to these sweeping policy changes, the Internal Revenue Service published new rules shortly after H.R. 1’s passage that narrowed the way in which developers can prove projects have begun construction for the purposes of qualifying for the expiring ITC and PTC.
All of this has caused many customers and clean energy developers to rush to make purchases and begin construction on projects before the applicable deadlines, which, under the IRA, were previously set in the early to mid-2030s. Ava encourages our customers to take advantage of these tax credits while they still can, but not all customers may be in a position to do so before these incentives expire. Likewise, developers might not be able to get certain wind and solar projects built in time to access the ITC or PTC, creating the potential for some otherwise viable projects to be scaled back or abandoned altogether.
In addition to H.R. 1, the Administration has carried out a handful of separate but related actions that are hindering wind and solar development on federal lands. In July, the Department of the Interior (DOI) published an order directing that many actions previously considered routine be directly reviewed and approved by the Secretary and other senior leadership. In August, DOI issued another order directing the agency to consider “capacity density”—or the megawatt per acre output—when conducting environmental reviews for proposed wind and solar projects. And most recently, a handful of other agencies have taken steps to halt work on several offshore wind projects being built off the East Coast.
Together, these directives subject renewable generation to new levels of scrutiny that are slowing down project development. They also introduce new uncertainty for projects that have already received approvals, putting billions of investment dollars in jeopardy and reducing the pool of resources available to power our homes and businesses. These actions, combined with the sudden removal of major tax credits, are already driving up costs and disrupting the market.
Further, these policy changes present new hurdles for Ava’s efforts to scale up virtual power plants (VPPs) that help maintain grid reliability and put money back in our customers’ pockets. Establishing effective VPP programs is dependent on the steady and widespread adoption of distributed energy resources (DERs) like rooftop solar, battery systems, EVs, and electric heat pumps at customer homes and municipal buildings throughout our service area. Without federal incentives for installing DERs, the pace of installations will slow, limiting a powerful tool to help avoid blackouts, reduce carbon emissions, and keep costs down.
What We’re Doing
With this changing landscape in mind, Ava has doubled down on program offerings and a procurement strategy that encourage customers to participate in VPPs, improve the convenience of driving an EV, and save customers money.
Ava SmartHome Charging, our managed charging program, gives customers both an up-front and ongoing incentive to allow Ava to automatically optimize their EV charging schedule. Over 2,200 customer devices have enrolled in the first six months of the program. Ava has also begun rolling out its own network of direct current fast charging (DCFC) stations, called Ava Charge, to provide EV drivers—especially those who live in multifamily housing and might lack access to charging at home—with convenient and reliable access to public chargers located throughout our service area.
On the procurement side, Ava is investing in solar projects that support local development in our service area while providing low-income customers with 100% renewable energy supply at a 20% discount through California’s Disadvantaged Community Green Tariff (DAC-GT) program. And because Ava is a not-for-profit public agency that does not have shareholders, we have returned millions of dollars back to our customers in the form of credits on their electricity bills.
Looking Ahead
Renewable energy tax incentives, in the form of ITCs and PTCs, helped to even the playing field relative to the fossil fuel industry, which has historically depended on tax advantages such as Master Limited Partnerships (MLPs) and Intangible Drilling Costs (IDCs). Although the rollback of federal support for wind and solar energy projects is causing noticeable disruption across the energy sector, we are confident that the absence of tax breaks alone does not spell an end to clean energy development. While federal policies might drive up costs above what they would have otherwise been in the short term, we are still bullish on the economic competitiveness of these generation sources over a longer time horizon.
Despite shifting financial environments and changes in political leadership, the cost of building and installing solar systems has declined substantially over the last few decades, driven largely by major improvements in efficiency. Utility-scale solar, for instance, experienced an 82% cost reduction between 2010 and 2020 and is now one of the cheapest forms of energy on the market.
Likewise, the cost of onshore wind energy has fallen by over 60% since 2000, and the cost of battery storage systems, which are often paired with wind and solar power plants, is expected to decline over the next few decades. The strong economics of these energy sources drove over 90% of new energy generating capacity added to the U.S. grid in 2024 to be from solar, wind, and battery storage, and the energy needs of Artificial Intelligence and data centers will continue to drive significant clean energy development.
Ava is also encouraged by California’s steady leadership and continued commitment to tackling the twin crises of affordability and climate change. In September, Governor Gavin Newsom signed into law a slate of energy affordability and climate-related policies that, among other things, extend the state’s Cap-and-Invest program and make critical reforms to put downward pressure on electricity costs. There is much more to be done to make energy bills more affordable—such as improving California’s resource adequacy trading program—but these new laws are a welcome step in the right direction.
In short, Ava is laser-focused on making our rates as affordable as possible, even and especially in the face of an evolving federal policy environment. As a clean energy provider, Ava is accustomed to operating in volatile markets and adapting to changing incentives. So in the midst of all this uncertainty, we are eager to continue providing our customers with the clean, reliable, and competitively priced service and local benefits they deserve.