Much literature on federalism and multi-level governance argues that federalist institutional arrangements promote renewable-energy policies. However, the U.S. case supports a different view, that federalism has ambivalent effects. Policy innovation has occurred at the state level and to some extent has led to policy adoption by other states and the federal government, but the extent is limited by the veto power of fossil-fuel interests that are rooted in many state governments and in Congress, buttressed by increasing Republican Party hostility to environmental and climate policy. This argument is supported by a detailed analysis of five periods of federal and state renewable-energy policy-making, from the Carter to the Trump administration. The negative effects of federalism on national renewable-energy policy in the United States, in contrast to the West European cases in this special issue, are mainly due to the interaction of its federalist institutions with party polarization and a strong domestic fossil-fuel industry.