Federal permitting reform: the impact on development

Federal permit reform has long been an ask of the energy industry. With the pending Bipartisan American Affordability and Jobs Act of 2026 in hand, industry groups and policy leaders in Washington are applauding the effort to speed up infrastructure development. Developers, however, are left with 417 pages of legal jargon to parse through and answer the question: if passed, how would this legislation impact my projects today?

To put this question in perspective, not all renewable projects are subject to federal agency review. In our 2026 pipeline, only 22% of required permits are non-ministerial federal permits. If you’re a DG developer with limited wetlands disturbance, no threatened or endangered species on site, and no FAA triggers, you likely have no federal nexus at all. Larger utility-scale projects and Bureau of Land Management sites are the ones most likely to be impacted by this legislation.

For those that are impacted, some recent history helps explain the purpose of this bill. Before 2025, federal permits were rarely painless, but the process was predictable. Developers knew what each agency required and what outcome to expect. File the eNOI with EPA for Construction General Permit coverage, and you could generally count on authorization after the standard waiting period. This changed in 2025, particularly due to the Department of Interior's (DOI) memo, "Departmental Review Procedures for Decisions, Actions, Consultations, and Other Undertakings Related to Wind and Solar Energy Facilities". The memo sent wind and solar decisions through several new layers of review, and projects got stuck between agencies indefinitely.

The impact of this was widespread. Major roadblocks appeared, such as the complete stop of the Bureau of Land Management review process. But the impact showed up in less obvious places too. For example, the U.S. Fish and Wildlife Service (USFWS) IPaC species list stopped supporting concurrence letters or permits, but was still a useful screening tool for identifying potential threatened and endangered species. As projects with a federal nexus got held up in DOI review, the standard 90-day window for IPaC report validity expired. It quickly became unknown how financiers would treat IPaC reports going forward.

Much of the intent of the Act is to remedy this problem. It puts guardrails on reviews under policies such as the National Environmental Policy Act, National Historic Preservation Act, Clean Water Act, and Endangered Species Act. The legislation narrows the scope of which projects are subject to review; for those that are, it caps review timelines and limits litigation. While the intent is to resolve some of the political headwinds the infrastructure industry has been fielding, whether it improves the process in practice is less certain, for a few reasons.

First, the timelines are shorter, but when does the clock start? Deadlines run from the earlier of two dates: the agency's level-of-review determination or its notice that an application is complete. Agencies have 60 days to decide whether an application is complete. If they request more information, a new 60-day window starts when they receive it. In our experience, agency feedback rarely arrives all at once, and successive rounds of comments turn "complete" into a moving target. In the past, this revision process has taken a few months, but could easily be extended. Nothing in the bill caps the number of completeness rounds. If that loop persists, the scheduling risk we have seen over the past year doesn't disappear; it just moves to before the statutory clock starts.

Second, timing matters here. Much of the near-term pipeline has been safe-harbored and must be operational before the four-year continuity clock runs out. A one-to-two-year federal review plus construction leaves little margin for error.

Finally, and perhaps most important, the DOI memo aimed to halt projects, but most of the projects we worked on didn't stall indefinitely. Developers simply got creative when dealing with federal permits. Take, for example, two projects we supported in New York. Each project required a U.S. Army Corps of Engineers (USACE) Nationwide Permit for a culvert and stream crossing on the projects’ access road. Under the DOI memo, USACE had to consult with USFWS on endangered species, and USFWS wasn't responding. The project should’ve stopped in its tracks, but we found a solution. USACE only had to consult USFWS if endangered species might be present on the property. The developer worked with the landowner to clear trees during the preferred tree-clearing window, which removed that concern. USACE then withdrew its request to USFWS and issued the permits.

This wasn’t an ideal scenario, but it also wasn’t a project-killer. And it wasn’t isolated - for six projects we supported in Texas, the developers traded capacity for reduced wetlands impact, avoiding USACE review. For a New York project, the need for a federal take authorization was avoided with a culvert redesign. Developers are used to headwinds - federal pushback didn’t stop projects, just forced creative solutions.

We're hopeful the bill will meaningfully reduce the risk these reviews carry, but there's no guarantee. Developers may eventually redesign projects to add back capacity and accept a federal nexus, but we expect most will wait for early movers to set a precedent before taking that bet.

Despite this cautious near-term view, there’s much to anticipate. There could certainly be updates to the language prior to being brought to the Senate and Assembly chambers. There’s a long-term upside - transmission and interconnection provisions could unlock formerly untapped markets and open new origination opportunities. But, for now, we cautiously anticipate business-as-usual in federal permitting.