Invest­ment in ener­gy research and devel­op­ment in the U.S. is declin­ing despite calls for an enhance­ment of the nation’s capac­i­ty for inno­va­tion to address envi­ron­men­tal, geopo­lit­i­cal, and macro­eco­nom­ic con­cerns. We exam­ine invest­ments in research and devel­op­ment in the ener­gy sec­tor, and observe broad-based declines in fund­ing since the mid-1990s. The large reduc­tions in invest­ment by the pri­vate sec­tor should be a par­tic­u­lar area of con­cern for pol­i­cy mak­ers. Mul­ti­ple mea­sures of patent­ing activ­i­ty reveal wide­spread declines in inno­v­a­tive activ­i­ty that are cor­re­lat­ed with research and devel­op­ment (R&D) investment—notably in the envi­ron­men­tal­ly sig­nif­i­cant wind and solar areas. Trends in ven­ture cap­i­tal invest­ment and fuel cell inno­va­tion are two promis­ing cas­es that run counter to the over­all trends in the sec­tor. We draw on pri­or work on the opti­mal lev­el of ener­gy R&D to iden­ti­fy a range of val­ues which would be ade­quate to address ener­gy-relat­ed con­cerns. Com­par­ing sim­ple sce­nar­ios based on this range to past pub­lic R&D pro­grams and indus­try invest­ment data indi­cates that a five to ten-fold increase in ener­gy R&D invest­ment is both war­rant­ed and feasible.