The Benefits of a Transmission Investment Tax Credit

High-voltage transmission towers and power lines against a blue sky with scattered clouds.

Key Takeaways

  • Transmission upgrades are necessary to meet growing electricity demand and to deliver affordable and reliable power to American families and factories. 
  • A transmission investment tax credit (ITC) could spur investment in grid upgrades by providing long-term investment certainty. 
  • Transmission expansion could save U.S. ratepayers up to $27.7 billion per year. 
  • A transmission investment tax credit could generate as many as one million new U.S. jobs, including immediate construction jobs for transmission projects and long-term roles maintaining them.  

Background

After two decades of flat or falling electricity demand, the U.S. power grid faces a projected need for an additional 166 gigawatts of new capacity by 2030—equivalent to 15 times the power demand of New York City.1 This increase in demand is driven by a number of factors including industrial and manufacturing growth, increased demand for computing, and the expansion of electricity use in home heating, cooling, and other consumer applications.2 

To help meet this demand growth, the nation’s transmission capacity must also grow. By 2035, regional transmission needs are projected to increase by 64-128%, and interregional transmission needs are expected to increase 112 to 412%.3 Unfortunately, the buildout of transmission lines has slowed, especially for interregional higher voltage lines that produce the greatest benefits. After building around 5,000 miles of transmission in 2013, the United States has added fewer miles each year since, with only about 400 miles of transmission built in 2025.4 

By comparison, China has built more high-voltage direct current (HVDC) transmission capacity over the last 15 years than the United States has in its entire history.5  

Our outdated grid is costing Americans every year. Its inefficiency results in higher electricity bills for American households, its bottlenecks create unnecessary outages in severe weather, and our inability to build is an economic vulnerability. 

Need for an Investment Tax Credit for Electric Transmission 

An investment tax credit for electric transmission would provide developers with long-term investment certainty, helping to drive necessary private-sector led expansion. Such expansion could save electricity consumers in the residential, industrial, and commercial sectors up to $27.7 billion per year,6 supporting the delivery of affordable, reliable, secure electricity for American families and factories.  

Preliminary analysis identified 50 high-voltage, regional and interregional transmission projects that would likely be eligible for the 30% transmission ITC as proposed under the 2026 Grid Resiliency Tax Credit Act. These projects represent approximately $90 billion in total investment. Of the 50 eligible projects, just over half are expected to start construction and qualify for the tax credit, mostly due to remaining permitting risks and the challenge of finding buyers and sellers to purchase capacity on the interregional transmission lines.  

The table below summarizes the expected investment and jobs created7 under two scenarios: 1) All projects are completed; and 2) A scenario where we estimate odds of success.8  

Transmission projects can support short-term jobs in construction, manufacturing, and engineering as well as longer-term jobs maintaining projects. In the table below, one job-year means one full-time-equivalent job sustained for one year. 

This is a preliminary analysis, and is likely to be on the lower end, particularly if permitting reforms that expedite the development timeline for projects are enacted.

All projects are completedProjects weighted by odds of success
Total transmission investment$87.4 billion$47.3 billion
Direct Job-Years9 620,000428,000 
Indirect Job-Years 934,000 606,000
Total Job-Years 1,554,000 1,034,000 

ACORE Background

ACORE’s membership represents the breadth of the clean energy economy with firms that finance, develop and build, manufacture equipment, as well as major consumers of clean electricity. Upgrading and expanding the nation’s transmission network is one of ACORE’s top priorities and is essential to promoting American economic prosperity, national security, and technological advancement. Based on analysis of the benefits to transmission development, consumers, job creation, and other factors ACORE has been a longtime supporter of establishment of an ITC for transmission10, and the Macro Grid Initiative is a leading voice for the expansion of the nation’s transmission capacity by building new high-voltage regional and interregional power lines and deploying advanced transmission technologies.  

1 John D. Wilson, Sophie Meyer, Zach Zimmerman, and Rob Gramlich, “Power Demand Forecasts Revised Up for Third Year Running, Led by Data Centers,” Grid Strategies, November 2025, https://gridstrategiesllc.com/wp-content/uploads/Grid-Strategies-National-Load-Growth-Report-2025.pdf

2 Ibid. 

3  Devin Hartman, Kent Chandler, and Beth Garza, “Twelve Policy Priorities to Secure Bulk Electric Reliability,” R Street, May 13, 2025, https://www.rstreet.org/research/twelve-policy-priorities-to-secure-bulk-electric-reliability/; “National Transmission Needs Study,” Grid Deployment Office, U.S. Department of Energy, October 2023, https://www.energy.gov/sites/default/files/2023-12/National%20Transmission%20Needs%20Study%20-%20Final_2023.12.1.pdf

4 “Energy Infrastructure Update for December 2025,” Federal Energy Regulatory Commission, April 9, 2026, https://www.ferc.gov/media/energy-infrastructure-update-december-2025

5 Dana Golden, “Transmission Dominance with Chinese Characteristics,” ChinaTalk, June 21, 2026, https://www.chinatalk.media/p/transmission-dominance-with-chinese/. 

6 Zach Zimmerman, Michael Goggin, Rob Gramlich, and Gretchen Kershaw, “Large-Scale Transmission Deployment Saves Consumers Money,” Grid Strategies, ACEG, June 2025: https://cleanenergygrid.org/wp-content/uploads/2025/06/GS_Transmission-Deployment-Saves-Consumers-Money_vf.pdf.  

7 Methodology Note: In terms of job creation, both alternating and direct current transmission lines yield substantial, though slightly different, employment opportunities. Based on a review of several different economic impact studies, investment in direct current transmission projects creates around 4,000 direct job-years for every $1 billion invested, and 7,300 indirect and induced job-years. For alternating current transmission projects, per $1 billion invested, there are around 11,500 new direct job-years and 15,500 indirect and induced job-years. 

8 Methodology Note: Success is calculated as a weighted average where 90% of regional projects, 80% of HVAC interregional projects, and 30% of HVDC interregional projects are successfully completed.  

9 Direct jobs are created by the transmission project itself (i.e. construction), and indirect jobs are supported through the projects’ supply chain, including manufacturing transmission components. Because transmission investments can support jobs for different lengths of time across construction, manufacturing, engineering, and related industries, these impacts are often reported in job-years, where one job-year means one full-time-equivalent job sustained for one year. 

10 Michael Goggin and Rob Gramlich, Grid Strategies LLC for ACORE, “Investment Tax Credit for Regionally Significant Transmission Lines: A Description and Analysis,” published May 13, 2021: https://acore.org/wp-content/uploads/2021/05/Investment-Tax-Credit-for-Regionally-Significant-Electricity-Transmission-Lines-ACORE.pdf.