The Demand Side Grid Support program was given no money for next year, though supporters blocked an effort that could have disbanded the VPP altogether.

California Gov. Gavin Newsom’s administration has blocked an effort to keep the state’s most successful virtual power plant program funded through next year.

State budget language finalized last week does not authorize additional money for the Demand Side Grid Support program, one of the biggest VPPs in the country. Friday was the last day for bills to be published before being voted on by the Aug. 31 deadline for this year’s legislative session.

But that budget language also excluded a plan from Newsom, a Democrat, to shift control of the program from the California Energy Commission to the California Public Utilities Commission, which DSGS supporters feared could lead to it being dismantled entirely.

That means that while ​“there is no guaranteed funding for the program for next year, at the very least it wasn’t outright gutted,” said Brandon García, California policy director for Advance Energy United, a clean energy trade group that reported the outcome of the DSGS negotiations on Friday.

Newsom’s office did not immediately respond to a request for comment.

A spokesperson for Democratic state Sen. Josh Becker, a DSGS supporter and author of several virtual power plant bills that passed both houses of the legislature last week, confirmed that the $70 million ​“we were hoping to use for DSGS over the next couple of years was not agreed on” in the final budget bills. At the same time, leaving the program under control of the California Energy Commission ​“does allow us an opportunity to take this issue up early next year, potentially with a new administration,” the spokesperson said.

Still, that’s cold comfort for the companies participating in the program, which pays households and businesses willing to turn down power use or share solar power stored up in batteries at times when California’s grid is under stress.

Since it was launched in 2022, DSGS has grown to include around 130,000 homes equipped with batteries and nearly 75,000 homes with smart thermostats and flexible load devices. The performance of its rooftop solar–charged batteries has been particularly noteworthy; a July 2025 test yielded roughly 476 megawatts of grid capacity over two hours, in what utility Pacific Gas & Electric called ​“the largest test of its kind ever done in California — and maybe the world.”

All told, DSGS has brought online more than a gigawatt of collective capacity to relieve costly stresses on the state’s power grid, García said.

Absent an intervention from lawmakers and California’s next governor sometime next year, ​“we don’t anticipate there being any more money for this program,” García said.

And without secure funding, it’s unclear how companies like Sunrun, Tesla, Leap, Renew Home, and others participating in DSGS will be able to pay their customers to help the grid.

That’s unfortunate, because DSGS stands out in a state that’s largely failed to tap into its nation-leading supply of rooftop solar–charged batteries and electric vehicles as an alternative to utility investments in power plants and transmission lines, said Sachu Constantine, executive director of nonprofit advocacy group Vote Solar.

“We should pursue every avenue available to use these resources that customers and companies have already invested in, that are already providing invaluable resources for the grid,” he said.

Similar programs regulated by the CPUC and administered by utilities have largely failed to thrive. That includes the CPUC’s Emergency Load Reduction Program, another approach to enlisting customers to relieve grid stresses that was created alongside DSGS in response to California’s grid emergencies from 2020 to 2022.

Paying customers with solar-charged batteries, smart thermostats, and remote-controllable EV chargers can also help lower utility bills for residents who don’t have those devices.

That’s because a large portion of the costs being passed on to customers of California’s three major utilities, which now charge among the highest rates in the continental U.S., are driven by the need to pay for fossil-fueled power plants and invest in grid infrastructure to meet peaks in grid demand.

By cutting funding for DSGS, California may be undermining a more economical way to defer those costs ​“at a moment when utilities are earning record profits and bills are going up, reliability is in question, and we’re continuing to prop up old, outmoded resources that don’t make sense for the future,” Constantine said.

Despite the potential cost savings, DSGS had its budget cut in 2024 and 2025, and was allocated no money in Newsom’s January budget proposal, leaving it at risk of being unable to pay participants this year. Early this summer, lawmakers were able to negotiate a transfer of $27 million from another program to keep DSGS running through 2026, García told Canary Media.

But lawmakers couldn’t overcome opposition from the Newsom administration to secure funding to pay DSGS participants in 2027. The final budget bills drafted by the legislature on Friday failed to include a proposal from Senate Democrats that would have shifted $70 million from another California Energy Commission program to cover those costs.

“We’re incredibly disappointed the administration rejected the legislature’s proposal to fund DSGS. It’s baffling,” García said.

García warned that DSGS participants don’t have much time to wait. ​“Even if the next incoming administration wants to fund DSGS, if they wait until June, I don’t know how many participants will be around to enroll in that program,” he said.

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After Republicans voted to undo much of the Inflation Reduction Act, a few cleantech professionals set out to exact electoral revenge. So far, it seems to be working.

Last summer, when the Republican-controlled Congress took a wrecking ball to the Inflation Reduction Act, Tom Matzzie was pissed. Though some Republican members of Congress had written letters trying to save wind and solar tax credits, when it came time to vote, they nearly all fell in line behind President Donald Trump. The One Big Beautiful Bill Act passed with widespread Republican support, canceling a decade-long tax incentive meant to accelerate America’s transition to cheaper, cleaner energy.

Politicians have long lived in fear of certain powerful lobbies — the National Rifle Association, Big Oil, Big Pharma — knowing that if they voted against those interest groups it could cost them their seats. But as the votes came down for the OBBBA, nobody in Congress, Matzzie couldn’t help noticing, seemed scared of antagonizing the clean energy industry.

Matzzie, who founded electricity retailer CleanChoice Energy and previously led campaigns for progressive groups and the Democratic National Committee, resolved to try to strengthen clean energy’s political clout by taking down the industry’s most prominent foes seeking elected office.

This strategy attracted the interest of Chris Larsen, a major clean energy investor who made a fortune in cryptocurrency, and Michael Brune, former head of the Sierra Club. Together, Matzzie, Larsen, and Brune formed the Invest in Tomorrow Coalition — a forgettable name that sounds like those of the other shadowy groups blanketing the airwaves during election season, but that happens to share an acronym with the now-defunct investment tax credit for solar installations. As primary season got underway, the super PAC cobbled together commitments for $20 million from Larsen, Matzzie, and other donors to spend on races this election cycle. Their targets: the far-right House Freedom Caucus members who pushed hardest to undo the IRA.

“Are we strong or weak? Are we someone that people can hurt without consequences?” Matzzie said of the clean energy industry.

Freedom Caucus Vice Chair Rep. Ralph Norman of South Carolina got a fresh taste of those consequences last week, when he lost the Republican primary race to replace the late Sen. Lindsey Graham. ITC had hit Norman with $1 million in attack ads accusing him of insufficient loyalty to Trump. The president happened to corroborate the message by enthusiastically endorsing Norman’s opponent, Graham’s sister, Darline, who went on to beat Norman by 5 points.

https://vimeo.com/1218123668?fl=pl&fe=vl

An Invest in Tomorrow Coalition ad against Ralph Norman

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In his concession speech, Norman lamented that he couldn’t keep up with the outside spending against him.

“All of our money came from South Carolina and from my personal account,” Norman said. ​“My opponents, the money came from outside PACs. It’s a fact; I’m not being critical. The PACs that were against, to me, freedom — as Democrats, they got what they wanted.”

ITC got what it wanted in all five Republican races it intervened in this primary season. The results suggest that even a small amount of strategic spending and targeted messaging can have an outsize impact on the foes of clean energy. If Matzzie and his team keep dealing vengeance to their enemies, they could deliver some of the political firepower needed to create more durable pro-renewable policies.

Using ​“whatever works” to win

ITC kicked off election season by funding attack ads against Rep. Chip Roy in his May primary runoff for Texas attorney general. The ads did not mention Roy’s antipathy to clean energy subsidies. Instead, they blasted Roy for not being loyal enough to Trump. ITC rigorously tests different messages to find what’s most effective, Matzzie explained: ​“We’re going to use whatever works.” Roy lost by 10.4%.

Matzzie, jumping into Republican primary races for the first time, found that each dollar spent on them goes a surprisingly long way. Conservative audiences get their news from a relatively small number of ideologically aligned media spaces, which means ITC can buy ads on Fox News, Truth Social, Rumble, and a few others and have a good shot at reaching a lot of motivated Republican voters, at which point it can cater to those voters’ deeply held beliefs rather than challenging them.

After tackling Roy, ITC put out ads supporting the reelection bid of Iowa Rep. Mariannette Miller-Meeks, a pro-renewable Republican running in a primary against an anti-renewable challenger. ​“Stand with Trump, support MAGA, vote Miller-Meeks,” one of the TV spots declared, alongside photos of the candidate posing with Trump. She won her primary on June 2.

Then, ITC launched its first offensive against Ralph Norman. At that point, he was running in the June 9 primary for South Carolina governor and needed to place in the top two to advance to a runoff. The PAC funded a wave of attack ads against him, and he finished in a distant third.

ITC’s clearest flex thus far has been to take on Tennessee Rep. Andy Ogles, who faced a primary challenge from former state Agriculture Commissioner Charlie Hatcher. Each campaign had spent nearly $600,000; ITC dropped $2 million on a two-pronged strategy to attack Ogles and elevate Hatcher.

The PAC sought to label Ogles as ​“Lyin’ Andy” by calling attention to instances in which he missed votes in Congress and triggered an FBI investigation over campaign finance irregularities.

At the same time, since incumbent Ogles had much better name recognition, ITC paid for ads to raise Hatcher’s profile and ran tracking polls to test their efficacy. Over three weeks, the portion of Republican primary voters who had never heard of Hatcher fell from around half to one-quarter, Matzzie said.

Despite an endorsement from Trump and an infusion of more than $700,000 from the Freedom Caucus Fund, Ogles lost the August 6 primary by more than 6 points.

The upset proved sufficiently embarrassing that Trump disavowed Ogles in a subsequent Truth Social post, calling him ​“a person who I remained loyal to even though he had virtually no chance of winning.”

Can the clean energy industry deter future political attacks?

Of course, there’s no way to prove that ITC’s money played a decisive role in these races. The group operates in a noisy political landscape with many variables at play. Ogles, for instance, was reportedly in hot water with voters over Islamophobic and homophobic remarks, per Politico, and needed to reach new voters due to redistricting. Graham had Trump stumping for her in the state, and his PAC funded a barrage of get-out-the-vote texts for her.

Still, each race turned out the way ITC wanted.

As Matzzie sees it, scientifically proving a causal link is beside the point; what matters is that politicians fear the possibility of this happening to them. That narrative gains strength with each candidate who’s knocked out.

It would be hard to find better testimony to the effectiveness of that strategy than the words of the defeated candidates themselves. Norman railed against ITC during his final minutes in the public spotlight as a candidate. Ogles, before he lost, called out the group during a radio interview: ​“They literally are trying to make an example out of me to try to strike fear in other Republicans. Which is why, if they prevail, this will have a chilling effect to the conservatives in Congress.”

Even if politicians think they can survive an assault from a scrappy team of clean energy enthusiasts, the PAC’s interventions increase the cost of running a campaign, pushing candidates to raise more money to counter the spending. ​“If you make enemies, your next election will be more expensive for you,” Matzzie said.

ITC hopes to keep raising money to spend up to $30 million in this cycle, he said. The PAC is now targeting its first Democratic primary, attacking Rhode Island Gov. Dan McKee for scapegoating clean energy as the cause of the state’s affordability problems. McKee was trailing his challenger in an Emerson College poll released last week.

The general election season will draw a much broader electorate than the races ITC has participated in so far. Matzzie declined to comment in detail on what the PAC’s general election strategy will be.

From political vengeance to broader support

ITC’s efforts may have delivered a visceral satisfaction to clean energy pros chafing from last year’s defeats, but these actions aren’t likely to yield a more renewable-friendly Congress. Two of the candidates it attacked — Norman and Roy — were running for offices outside of Congress. Hatcher was never a champion of wind and solar. Some Republicans may think twice before loudly attacking the clean energy industry in the future, but that doesn’t mean they’re more likely to sign legislation that’s good for the industry.

Meanwhile, the major clean energy trade groups are not exactly embracing the PAC’s approach.

“We’re in the business of making more friends, not more enemies,” Tim Pawlenty, president and CEO of the Solar Energy Industries Association, said in an email. (Matzzie, for his part, allowed that the trade group has ​“to stay friends with everybody so they can walk into every office.”)

Another clean energy leader, cleantech executive and investor Steve McBee, sees ITC’s work on ​“enforcing accountability” as a valuable effort in a broader campaign to expand clean energy’s political power, even as he himself focuses on coalition building.

In May, McBee launched Amped, an effort to mobilize clean energy professionals and executives to engage more in public discourse, in order to build sustainable bipartisan support for their industry.

Though solar, wind, and batteries have taken over the power sector, representing an estimated 93% of all new power plant capacity getting built this year, the industry doesn’t yet wield the political power to match that success.

“We don’t show up with any swagger,” McBee said. ​“We continue to call ourselves ​‘alternative.’ … We find ourselves a bit outside the cultural zeitgeist, and that’s not a good place to be.”

McBee believes that the IRA was a ​“beautifully designed piece of legislation,” but that not enough work was done to tell voters and their representatives about the jobs and economic opportunities flowing to their districts. He wants to spur energy professionals to flood the political arena with the degree of money and effort that the fossil fuel industry has invested over the decades — but without the ​“lying and distortion.”

“The good news is, as an industry, we have all the facts on our side,” McBee said. ​“We just have to prosecute the case.”

Since starting Amped, McBee said he has received hundreds of inbound messages from people who want to help the industry put up more of a fight, noting the ​“organic unstructured energy that can be harnessed.”

That’s a bigger project than the upcoming midterms: to turn the IRA defeat into a political awakening for the clean energy sector.

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As an anchor tenant for several off-site arrays in development, the center will help spur investment and educate residents on the benefits of shared solar.

The Obama Presidential Center, which opened on Chicago’s South Side in June, features a museum full of mementos to democracy and the famous family, native prairie landscaping, an indoor basketball court, and other amenities. It will also be powered entirely by clean energy. Solar panels sit on the roof and on a garden pavilion, and a geothermal system heats and cools the complex. But the bulk of its power will be produced by community solar — the center will pay a set ​“subscription” fee to arrays located off-site.

The Obama Presidential Center will be the anchor tenant for several community solar projects that the Chicago-based company Reactivate is in the process of developing, slated to go online in 2027. Reliable anchor tenants are crucial to the success of community solar: They pay for large amounts — often 40% to 50% — of a project’s output, and can be key to persuading banks or other lenders to help finance a community solar array. The center’s subscription will cover about 6 gigawatt-hours of solar power annually, enough, along with its rooftop panels, for the entire campus.

The Obama Foundation, which runs the center, says community solar is a way to make clean energy accessible to renters, residents in multifamily housing, and those who aren’t able to afford or install solar panels on their own properties. That includes many people who live on Chicago’s South Side, where Obama cut his teeth as a community organizer decades ago.

Community solar delivers significant bill savings to households, especially in Illinois, where a state program guarantees robust benefits to low-income participants.

But in order to reap these savings, residents need to sign up. And too few of the people in marginalized neighborhoods who could benefit most do so, many solar advocates say.

Obama Foundation CEO Valerie Jarrett and Reactivate CEO Utopia Hill hope the Obama Presidential Center’s foray into community solar will raise awareness of, and trust in, the model so that it can help more residents struggling with their energy bills on the South Side and beyond.

They also expect the Obama Presidential Center will set an example for other mission-driven nonprofit organizations and companies to become anchor tenants.

“The foundation sought to use its buying power to catalyze the development of new renewable-energy generation sources,” Jarrett said.

“It is the foundation’s hope that this partnership with Reactivate will encourage other equity-focused organizations to consider community solar as a cost-effective way of procuring renewable energy.”

While Reactivate and other community solar developers in Illinois have signed up thousands of subscribers for their projects, they agree that people are often skeptical of the concept — especially in low-income and Black communities that have sometimes been targeted by predatory lenders and other unscrupulous businesses. Illinois lawmakers and consumer watchdogs, for example, have long struggled to rein in retail electric suppliers that offer residents energy plans under terms that end up being exploitative.

Hill, who grew up in a working-class Chicago suburb, said that people often respond to an offer of guaranteed savings with ​“What’s the catch?”

​“There is no catch. It’s just an opportunity,” Hill said. ​“Having a well-established name [with the Obama Presidential Center] will hopefully help people understand that community solar is a real program that will provide savings.”

A series of Illinois state clean energy laws created robust incentives for community solar development, with particularly generous support for low-income residents and those in environmental justice communities, who are guaranteed savings equal to at least half of the value of the energy generated from their solar subscription.

The program has spurred the installation of community solar arrays located in and serving communities like Waukegan in northern Illinois, a heavily industrial area where community solar built on a landfill provides clean energy and savings to about 1,000 households and the local school district.

A community solar project developed by Reactivate — which focuses on marginalized and underserved communities — in a Chicago suburb provided a total of $186,000 in savings last year to its 650 subscribers, 44% of whom earn less than $20,000 a year.

Mercy Housing, a national nonprofit affordable housing developer, is the anchor tenant for two Reactivate community solar projects that went online in 2024.

The benefits go to two Chicago-area Mercy buildings, with 96 and 65 living units. Mercy Housing senior environmental analyst Max Stewart said they’ve seen significant savings on energy bills, money that can be reinvested into energy efficiency or resident services, and help keep affordable housing projects sustainable. He noted that it can be hard to find organizations willing to make such a big commitment to community solar.

The opportunities available to anchor tenants should get ​“more awareness,” Stewart said. ​“It always helps to have someone leading the way.”

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