Federal permitting reform legislation and regulatory action are gaining bipartisan momentum in Washington, yet grid-scale battery storage developers continue to face multi-year interconnection delays that threaten project timelines and financing across the United States. The tension between accelerating approvals and persistent grid access bottlenecks has emerged as a defining challenge for the utility-scale storage sector in 2026.
Background
Congress and the executive branch have moved on multiple fronts to streamline energy infrastructure permitting. The U.S. House of Representatives passed the Standardizing Permitting and Expediting Economic Development (SPEED) Act on December 18, 2025, by a vote of 221-196. The legislation, sponsored by House Natural Resources Committee Chairman Bruce Westerman (R-AR) and Rep. Jared Golden (D-ME), proposes significant amendments to the National Environmental Policy Act, including shortened review timelines, limits on judicial challenges, and provisions to prevent duplicative federal and state reviews. The bill now awaits Senate action, where it requires 60 votes to overcome the filibuster.
In January 2026, a bipartisan group of more than a dozen governors released reform priorities calling on Congress to ensure federal permitting is "technology-neutral and apolitical," according to a letter led by Oklahoma Governor Kevin Stitt and Pennsylvania Governor Josh Shapiro. The governors recommended adopting digital ePermitting systems, deploying AI tools to accelerate reviews, and ensuring agencies have adequate staffing to process applications.
Meanwhile, FERC Order 2023, issued in July 2023, mandated a shift from first-come, first-served serial interconnection studies to a cluster-based, first-ready, first-served model. Regional transmission operators are still implementing the transition.
Details
Despite legislative progress, the interconnection queue remains a formidable obstacle. As of the end of 2024, approximately 10,300 projects representing 1,400 GW of generation and 890 GW of storage were actively seeking grid interconnection, according to Lawrence Berkeley National Laboratory's 2025 "Queued Up" report. Total queue volume declined 12% year-over-year-the first drop in at least a decade-but the decrease was driven largely by record withdrawals and fewer new applications rather than improved processing efficiency.
A record 112 GW of solar and storage capacity withdrew from the queue in 2024 due to political uncertainty, elevated interest rates, tariffs, and local permitting challenges, according to Lawrence Berkeley National Laboratory. The median time from interconnection request to commercial operation has doubled, from under two years for projects built in 2000-2007 to over four years for those built between 2018 and 2024.
A survey of 50 renewable energy developers released by clean energy finance platform Crux in April 2026 quantified the cost of permitting delays. All 50 respondents reported increased project costs, with a majority citing a 6-10% rise in total costs; some reported increases exceeding 25%. More than 80% of developers surveyed said they intentionally site projects to avoid triggering federal permitting requirements, according to Crux. When asked what single change they most wanted, 72% of respondents chose more predictable outcomes over faster timelines or simpler processes.
Hasan Nazar, head of policy at Crux, noted that developers are not seeking weaker environmental protections. As Nazar told E&E News, "developers can absorb difficulty, but they cannot build under uncertainty."
Interconnection challenges vary significantly by region. In PJM, which serves more than 65 million people across 13 states and Washington, D.C., projects that became operational in 2025 had spent an average of eight years in the queue, according to analysis from Novogradac citing Rocky Mountain Institute data. PJM has introduced a new cycle-based interconnection process for 2026, requiring projects to demonstrate site control, permitting progress, and financial readiness earlier. As previously reported in coverage of the Trego 200 MW BESS project near Reno, even individual projects that secure local approval face extended interconnection study timelines.
Outlook
The Bipartisan Policy Center's Xan Fishman said a broader permitting deal could be signed into law in the second quarter of 2026, though analysts at Capstone and others have cautioned that the Senate path remains uncertain. Senate Democrats have expressed concern that the SPEED Act does not adequately address transmission infrastructure development. More than 600 organizations, led by the U.S. Chamber of Commerce, have signed a coalition letter urging Senate passage of federal permitting reform. Whether legislative action translates into measurable reductions in project lead times-particularly for battery energy storage systems paired with solar and wind-will depend on coordinated implementation across federal, state, and local jurisdictions.
