The 50 States of Grid Modernization: States Encourage Targeted DER Deployment Through Location-Based Incentives in Q2 2026
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Raleigh, NC – (July 22, 2026) The NC Clean Energy Technology Center (NCCETC) released its Q2 2026 edition of The 50 States of Grid Modernization. The quarterly series provides insights on state regulatory and legislative discussions and actions on grid modernization, utility business model and rate reforms, energy storage, microgrids, and demand response.
The report finds that 44 states, as well as the District of Columbia and Puerto Rico, took actions related to grid modernization during Q2 2026 (see figure below), with the greatest number of actions relating to energy storage deployment proposals (63), interconnection rules (47), overall utility business model reforms (46), performance-based energy storage incentives (35), performance-based regulation (32), and smart grid technology deployment (29).
A total of 481 grid modernization actions were taken during Q2 2026, in addition to over 300 introduced bills. California, Maryland, Virginia, and New Jersey saw the most action during the quarter, followed by Illinois, New Mexico, Louisiana, and New York.
Q2 2026 Legislative and Regulatory Action on Grid Modernization
The report discusses three trends in grid modernization actions taken in Q2 2026: (1) utilities pursuing location-based incentives for distributed energy resources, (2) policymakers scrutinizing utility spending on infrastructure upgrades, and (3) states facilitating virtual power plant participation in wholesale markets.
“We’re seeing a continued trend towards increased scrutiny on utility investments,” observed Nick Montoni, Senior Program Director at NCCETC. “Whether directing the study of cost-saving grid technologies, requiring more robust justification for infrastructure upgrades, or expanding utility scenario modeling requirements, policymakers are looking for more ways to understand and reduce utility costs.”
The report notes the top five policy developments of Q2 2026 were:
- Minnesota regulators approving Xcel Energy’s first-of-its-kind virtual power plant program;
- The Maryland Public Service Commission approving virtual power plant programs;
- California regulators beginning a review of advanced electric rate design;
- Virginia lawmakers enacting a flurry of new grid modernization laws; and
- The North Carolina Utilities Commission approving dynamic line rating prototypes.
“Increasingly, location-based incentives are being incorporated into utility programs to encourage targeted deployment of distributed energy resources where the grid can benefit the most,” noted Autumn Proudlove, Managing Director – Policy and Markets at NCCETC. “This has the potential to reduce the need for other grid investments while providing direct financial benefit to customers – all at a time when energy affordability is a top concern.
View the 50 States of Grid Modernization Q2 2026 Quarterly Report Executive Summary
View and Purchase the 50 States of Grid Modernization Q2 2026 Quarterly Report
ABOUT THE NC CLEAN ENERGY TECHNOLOGY CENTER
The NC Clean Energy Technology Center, as part of the College of Engineering at North Carolina State University, advances a sustainable energy economy by educating, demonstrating and providing support for clean energy technologies, practices and policies. It serves as a resource for innovative, sustainable energy technologies through technology demonstration, technical assistance, outreach and training. For more information about the Center, visit: http://www.nccleantech.
Media Contact: Shannon Helm, NCCETC, [email protected]