After decades of low-level warnings and unpopular assertions that the U.S. needs an energy transformation, it’s now abundantly clear and undoubtedly imminent that the country’s energy future will look different than its past. This outlook is both popular and far-reaching.

Today, the world derives 80% of its energy supply from fossil fuels, while just 3% comes from renewable sources. Many of our most important technologies, from vehicles to home heating and cooling solutions rely on fossil fuels. However, according to a March 2022 survey by the Pew Research Center, the majority of Americans believe the U.S. should “prioritize the development of renewable energy sources, such as wind and solar and take steps toward the country becoming carbon neutral by the year 2050.”

What’s more, while stakeholders view potential solutions very differently, there is an emerging consensus that change is coming. That’s why, whether motivated by the frightening climate implications of inaction or worried about unstable supplies and unsustainable prices, it’s clear that we need an energy transformation.

What’s motivating change?

The impending energy transformation isn't a new topic. Politicians, climate activists and others have been lobbying for change for decades, but today’s consensus is unprecedented, powered by a confluence of factors motivating change.

Climate change

Climate change is complicated, as man-made and natural factors contribute to a warming planet. However, as the U.S. Environmental Protection Agency (EPA) explains, “Burning fossil fuels changes the climate more than any other human activity.”

A 2017 Vox headline captured the complicated but obvious next step: “electrify everything.” This includes replacing gas-powered vehicles with their electric counterparts and switching fuel-burning furnaces with electric-powered heat pumps. For example, people’s homes consume a lot of energy and heating and cooling are the primary causes, collectively contributing 441 million tons of greenhouse gasses into the atmosphere annually.

Incredibly, many homes, especially in the Northeast United States, rely on propane and fuel oils to heat their homes. For instance, almost a quarter of New York households use heating oil to keep their homes warm in the winter, undermining one of the most populous state’s ambitious climate change agendas. Conversely, as the U.S. Department of Energy asserts, “today’s heat pumps can reduce energy use by 30%-60%, control humidity, are sturdy and reliable and fit in a wide variety of homes.”

Simply put, we cannot solve climate change without altering our energy sources, and the technologies are readily available to empower that transition. Many people are ready to take action. A report by Pew Research Center found that 80 % of people are willing to make changes to blunt the impact of climate change.

Energy costs

While climate change is increasingly top-of-mind for scientists, government leaders and everyday citizens, the need for energy transition isn’t just climate-related. Energy costs have soared in the past year, increasing by 4.3% year-over-year, the fastest rate since 2008. As a result, continuing or even expanding reliance on fossil fuels is a financial non-starter for many families and government leaders. These price increases have many causes, meaning no single solution will alleviate this trend.

For starters, Russia’s invasion of Ukraine, and the global sanctions that followed, have driven up the price of oil and natural gas, making everything from home heating to unleaded gas more expensive. At the same time, other factors, including severe weather events, like the major winter storm impacting Texas, contributed to rising prices as freezing weather disabled wind turbines and restricted the flow of natural gas.

Consequently, rising energy prices are contributing to near-historic inflation. According to a Times analysis, “Energy prices — including not just gasoline but home heating and electricity as well — accounted for more than a sixth of the total increase in the Consumer Price Index over the 12 months ending in January.”

Unfortunately, this reality is unlikely to abate anytime soon. While acknowledging the uncertainty of this unique moment, the U.S. Energy Information Administration’s short-term energy outlook estimates that the nominal energy price will increase by 3.9% in 2022.

Regulatory implications

Recognizing that climate change trends and energy price increases are unsustainable, many governments are implementing new regulatory standards to force families, companies and government organizations to make a change. For example, by December 2023, New York City builders will need to phase out natural gas line installations on new constructions under seven stories. This new standard, passed as part of the All-Electric Building Act, reflects the state’s increasing willingness to use its regulatory power to enact change.

Similarly, states like California are investing in net-zero home constructions, planning to add 100,000 new homes each year to meet climate demands and housing shortages. While this practice doesn’t prevent builders from constructing less efficient homes, it incentivizes green energy homes.

Of course, President Biden’s executive order on the country’s clean energy economy will guide regulatory efforts for the foreseeable future. Built upon an ambitious set of emissions reduction and energy production goals, we should expect additional regulatory standards to support these outcomes.

How we make change happen

Envisioning a sustainable energy future is certainly simpler than making it happen. However, there are certain levers we can pull to encourage change and transformation.

Government investment

Disrupting the energy sector is difficult and expensive. The upfront costs of research, development and disruption will be enormous, and it’s a cost that only the federal government is truly capable of bearing.

An energy transition will require significant government investment across multiple sectors. This is not a new dynamic. Globally, the fossil fuel industry receives $11 million in subsidies every minute, according to an analysis by the International Monetary Fund. As one analysis acknowledges, “not a single country pricing all its fuels sufficiently to reflect their full supply and environmental costs.”

We need to similarly invest in green energy solutions to transition our energy supplies. According to The International Energy Agency (IEA), global green energy investment will need to more than triple by 2030 to reach zero emissions by 2050. The recent failure of the Build Back Better Bill was a significant setback in this regard, but an ongoing effort to pass pieces of the law could serve as seed money for the energy transition.

In the meantime, leveraging the Investment Tax Credit (ITC) can empower people to make needed changes with financial support from the federal government. Specifically, this tax credit allows homeowners to claim a 26% tax credit for green energy systems installed in 2022 and a 22% credit in 2023. Even so, more investment is needed to make transformational aspirations a reality.

In many ways, the solar power revolution serves as a proof of concept for federal investment. Significant investments in and subsidies for solar energy have increased solar energy production from .34 gigawatts (GW) in 2008 to 97 GW today. Meanwhile, solar panel installation prices fell more than 70% since 2014, empowering more people and businesses to adopt this renewable energy technology. Similar investments in geothermal, wind and nuclear can further accelerate a more sustainable energy future. It also ensures that green energy is accessible to more people, including low-income earners.

One analysis of New York residents found that 84% of low-income homeowners rely on natural gas, propane, or fuel oil to heat their homes, making them a critical demographic for accelerating an effective energy transformation.

In response, as The Los Angeles Times recently reported, “Congress could offer generous financial assistance to make sure that low-income families can afford to go electric and don’t get stuck paying for ever-pricier gasoline.”

Taken together, it's clear that investments by the federal government will be a major catalyst for energy transformation, ensuring that green energy is accessible, affordable and equitable in the years and decades ahead.

Local incentives

Of course, the federal government isn’t the only institution that can help facilitate an energy transformation. State governments and local municipalities can similarly incentivize change with subsidies, tax credits, or other inducements to accelerate change. Already, several states, including New York, Connecticut, Massachusetts, Pennsylvania, Maryland and New Jersey are providing financial incentives for renewable energy solutions, like geothermal heating and cooling, that make green energy solutions a priority.

It’s not just state governments and local municipalities that can provide incentives to hasten our energy transition. Utility companies can also offer compelling opportunities to embrace renewable energies. In the Northeast, Con Edison, National Grid, Central Hudson, Orange and Rockland, NYSEG, Eversource and United Illuminating are modeling incentive structures that can support green energy solutions across the country.

Together, local investment and utility incentives can make green energy solutions more accessible for communities, initiating a trend with far-reaching repercussions for short and long-term energy outcomes.

Consumer demand

To be sure, the green energy transition is, in a way, predicated on consumer buy-in. For example, millions of homes are burning fossil fuels for heating and cooling. Ushering in an energy transition will require people to retrofit their homes with electric solutions, which requires a personal and financial investment that many can’t or won’t afford.

Local businesses can support these efforts by advertising the benefits of green energy solutions and accompanying financing options that make change affordable and accessible. This dynamic can drive business growth, job creation and energy transition, making it a rare win-win-win for companies, customers and the country. This is also true for new constructions. When home builders install natural gas-powered appliances in new homes, they are enshrining these systems for decades, forcing buyers to rely on existing energy sources to power their homes. In contrast, building new, zero-emission homes hastens the energy transition by equipping homeowners with the infrastructure to capitalize on an electric-powered future. Fortunately, many buyers view renewable energy installations as an upgrade worth paying for, which is why homes with renewable energy installations sell for more than 4% more than their traditional counterparts.

Likewise, making electric cars more capable and accessible to ordinary buyers can alter the energy landscape for years to come. For that to happen, electric cars need to become cheaper, the charging infrastructure more accessible, and the buyer interest more expansive.

In this way, today’s energy transformation is a circular premise. We need greater investment to make change a reality, and that investment must enhance consumer demand. This will help make renewable energy solutions sustainable.

Ready for action

We know that today’s energy supplies will not solve tomorrow’s challenges. Continuing to rely on fossil fuels has too many climate implications, costs too much money and doesn't account for shifting regulatory standards.

That’s why we need an energy transformation. With so many people on the same page, we can’t afford to miss this moment. We are ready for action, and it’s time to take the next step.