The last year has been a time of whiplash for the U.S. energy landscape. Federal policy changed course under the Trump administration. Cost concerns deepened. Uncertainty and energy market turmoil increased. Projected future electricity demand rose dramatically from data centers and other driversnd new barriers to meeting that demand emerged.These challenges have tested the country’s ability to keep pace with rapidly evolving energy needs. Yet even amidst significant headwinds, clean energy deployment remains strong. Data from the end of 2025, the latest available, shows that 90% of new energy capacity added in the U.S. last year came from clean sources.However, fossil fuels are also gaining momentum. Coal use ticked up alongside a wave of new planned gas plants. Taken together, these stories paint a hazy picture for the coming years.Below, we review the pace of clean energy development in the U.S., key trends that defined a turbulent year for America’s energy transition, and where the story goes next. Batteries, which can store power for use when the wind isn’t blowing and sun isn’t shining, saw a 39% increase in installations from 2024-2025. Photo by U.S. government/Rawpixel A New Era of Soaring Electricity Demand and Affordability ConcernsEnergy realities are shifting quickly across the U.S.Electricity demand hit a record high in 2025, rising 2% over 2024 and 9% above 2020 levels. For comparison, electricity demand between 2014 and 2019 across all sectors saw a net increase of only 1.2%. With mostly consistent demand increases since 2020, it appears the era of ‘flat demand’ seen from the late 2000s and 2010s has ended. The U.S. is now firmly in an energy growth era.Recent demand data, however, don’t capture the full story. Projections for data center growth continue to increase exponentially, with some individual data center projects planning to consume more power than entire cities. Utilities project that energy demand could rise 32% nationwide by decade’s end, with one estimate stating that data centers could consume 9%-17% of all U.S. electricity by 2030. While it’s unclear how much of this load will materialize — and how quickly — the expected surge and concentration of large loads in some regions is reshaping planning across the power sector. Manufacturing and electrification are contributing to rising demand, too, particularly in California and the Northeast. Uptake of electric vehicles (EVs), heat pumps and electric water heaters continues. These technologies reduce emissions and are a welcome signal amidst a cooling market and reduced federal clean energy incentives. But it also means steady, accumulating load on an already-strained grid.Meanwhile, energy affordability has emerged as a top concern for households across the U.S. Average residential electricity prices rose 7% from 2024-2025, outpacing inflation. Utilities sought a record $30.5 billion in rate increases, much of it for grid investments and addressing natural disasters. More than two-thirds of Americans reported financial strain due to higher utility bills. Affordability and meeting rapidly growing loads have quickly become a central political issue, especially in areas with steeply rising bills, such as the Mid-Atlantic. These trends significantly shaped how the energy landscape evolved last year and will likely continue to do so. Looking back at 2025 and the latest data, six trends emerge:1) Clean Energy Installations Are Still Strong, with 56 GW of Solar, Wind and Storage Added in 2025.A record amount of electricity generation was brought online in 2025 to meet rising demand. Over 90% of it came from clean energy sources.Based on data from the EIA’s January 2026 Preliminary Monthly Electric Generator Inventory, the U.S. installed 49.6 gigawatts of new utility-scale solar, batteries and wind in 2025. Small-scale solar saw a 6.3 GW increase, raising the total solar, battery and wind capacity added to 55.9 GW. That’s equivalent to roughly double the amount needed to power New England at its highest-ever recorded demand.Natural gas plants represented the remaining 5.2GW of capacity additions. No new coal capacity was added.The clearest power sector generation winner in 2025 was solar, with 27 GW of new utility-scale capacity added to the grid. While this is down from 2024, solar still represented over half of all new installed capacity last year, while utility-scale solar generation increased by 34.5% from 2024-2025.Batteries, which can store power for use when the wind isn’t blowing and sun isn’t shining, are also growing quickly, seeing a 39% increase in installations from 2024-2025. Many battery facilities are co-located with renewables. Two of the largest battery and solar co-located facilities came online in 2025 in Kern County, California and Wharton County, Texas.Importantly, clean energy represents a larger share of the U.S. generation mix than ever before. EIA data show that wind and solar contributed 17% of all utility-scale energy generation in the U.S. in 2025, outpacing coal’s 16.6% figure. On the whole, renewable energy sources, including hydropower, comprised 24% of all utility-scale electricity generation in the U.S. Including small-scale, behind-the-meter solar, this figure rises to 26% of all electricity generation coming from renewables. Finally, combined with carbon-free nuclear energy, the U.S. saw 42% of utility-scale generation come from non-fossil resources in 2025, just above the fraction of natural gas.Even with this progress, 2025 saw major headwinds for renewable energy development — the full effects of which may yet to be seen. The passage of H.R. 1 eliminated federal investment and production tax credits for wind and solar projects unless they begin construction one year after enactment (by July 2026) or are placed in service by the end of 2027. Renewable projects also now face complex rules for materials, components or financing from certain foreign sources, most notably China. These changes created a rush for wind and solar project developers to meet these deadlines, ‘safe harbor’ their projects, and begin construction as soon as possible while facing simultaneous challenges with grid interconnection, market uncertainty and permitting barriers. Visitors inspect a turbine blade at Wild Horse Wind and Solar Energy Center in Washington state. Photo by Cindy Shebley/iStock At the same time, the Trump administration created additional challenges to renewable energy development. This includes delaying or making it more difficult to obtain federal permitting approvals for solar and wind installations and issuing stop-work orders for offshore wind plants.Yet despite these new hurdles, renewable energy and storage are projected to grow over the next few years. In 2026 and 2027, developers plan to install 84 GW of utility-scale solar, 45 GW of batteries, and 20 GW of wind, compared to just 15 GW of natural gas. Much of these upcoming capacity additions will likely come from projects that took steps to ‘safe harbor’ their access to valuable tax credits in 2025, guaranteeing some future solar and wind additions through the end of the decade. Battery storage installations are also likely to continue their rapid growth, since they remain eligible for investment tax credits through 2032. 2) Hyperscalers and Corporate Buyers Drove Significant Demand for Power — Both Clean Energy and Fossil Fuels.Corporate buyers, primarily ‘hyperscaler’ tech companies building large data centers, reported large purchases of clean energy to meet their current and future demands. The U.S. saw 29.5 GW of clean energy power purchase agreements signed in 2025 — about the same as in 2024 — dominated by big tech heavyweights like Meta, Amazon and Google. Purchases included solar, wind and battery storage, as well as growing demand for clean firm power sources such as nuclear, hydro, geothermal and gas with carbon capture.But even while clean energy purchases and development continue, data center developers are also increasingly turning to fossil fuels and on-site power plants to more quickly meet their electricity needs. In 2025 alone, data center developers announced 50 GW of ‘behind-the-meter’ energy projects, with almost half of that capacity coming from natural gas-powered turbines or engines. This is being driven by the need for ‘speed to power,’ with developers trying to secure as much electricity as possible as quickly as possible so they can come online faster. While it’s unclear how many of these projects will be realized, the scale and scope of current plans would represent an explosion of large-scale fossil fuel consumption and emissions in the near-term.Hyperscalers demonstrate this ‘all of the above’ trend. Google, for example, announced an agreement with Xcel Energy in Minnesota for significant solar, wind and iron air batteries, as well as a separate purchase agreement for up to 400MW of natural gas, with 90% of the carbon captured and stored at an ethanol facility in Illinois. But it also recently reached a deal for 900 MW of natural gas to supply a data center under construction with Crusoe, as part of a $40 billion AI investment in Texas. Meta committed to purchase 6 GW of new nuclear power slated to come online by 2035 as well as renewables, but has also recently committed to funding 7.5 GW of natural gas plants at its Hyperion data center in Louisiana. Microsoft even announced that it met its 2025 goal to match all of its electricity from zero-carbon sources in 2025, but also entered into a deal with Chevron for 2.5GW of gas for a West Texas data center.Costs for this infrastructure are becoming an increasingly prominent issue. States and utilities around the country introduced legislation, policies and rate tariffs to ensure that companies developing data centers pay their own costs of generation and grid investments, as well as cover any risks of stranded costs that could be passed on to ratepayers if data center projects do not materialize. In early 2026, seven major hyperscalers — including Amazon, Google and Microsoft — signed a voluntary Ratepayer Protection Pledge, committing to avoid shifting data-center-related costs to consumers. 3) Coal and Natural Gas Made Significant Gains.While data show a continuous rise in renewable energy and storage installations and generation since 2020, fossil fuels made significant gains in 2025. Electricity generation from coal increased by 13% from 2024-2025, likely tied to elevated natural gas prices and the Trump administration’s use of federal funds and emergency powers to support coal plants.Coal generation may continue to rise next year and through 2028 as the Trump administration actively promotes coal mining and power generation. It has redirected funds for carbon capture and energy resiliency projects to support building or recommissioning coal plants, as well as forcing coal plants scheduled for retirement to continue operations. Mandating that uneconomic plants continue to run is increasing costs at a time when affordability is front-and-center for consumers, causing utilities to sue the administration over these requirements. Natural gas generation fell by 3% over the 2020-2025 period and only 5.2 GW of new plants were added (representing only 10% of capacity additions). But plans for future utility-scale natural gas through the end of the 2020s and 2030s have significantly expanded. The EIA December 2026 Preliminary Monthly Electric Generator Inventory reported 44.8 GW of new natural gas capacity planned between 2026 and 2030; this does not include plans for on-site gas plants, which could more than double this figure. In comparison, plans for utility-scale renewables development through 2030 reached 119.1 GW of new utility-scale solar, 65.5 GW of batteries and 21.1 GW of onshore wind, according to EIA. 4) EVs and Electric Appliances Make Some Strides, but Progress Is Shaky.After years of growth and investment, the U.S. EV sector saw a turbulent year. The expiration of clean vehicle tax credits and new tariffs introduced by the Trump administration pushed plug-in EV sales to fall by 4% from 2024. Some automakers responded to federal policy shifts and slowing demand by scaling back EV plans and cancelling almost $20 billion worth of EV projects. However, 2025 was still the second-highest sales year on record for battery electric vehicles, representing 7.8% of all new vehicle sales. Used EV sales accelerated in 2025, seeing a 35% increase over 2024, with more than 375,000 units sold. While the future trajectory for EVs in the U.S. is uncertain, rising gas prices due to the war in Iran have sparked a global wave of interest in electric cars. Multiple automakers have announced new EV models and plans for the near future. The public EV charging network continued to expand rapidly in 2025. More than 18,000 direct current fast charging (DCFC) ports were installed, a 30% jump over 2024. This investment was driven almost entirely by private automakers, retailers and charging providers, indicating robust market interest in building a nationwide fast-charging network. Federal funding may help boost installations in the near future: Although the Trump administration froze federal funding for the National Electric Vehicle Infrastructure (NEVI) program for several months in 2025, funds were released in August. States have planned and obligated over $1.4 billion for charging projects through 2028.Electrification of buildings continued to make strides in 2025, despite headwinds at the state and federal level. Heat pump and electric water heater sales outpaced their gas-fueled counterparts for the fourth year in a row. Data from the Census Bureau revealed that the majority of single- and multi-family homes constructed in 2024 used electric heating. And although H.R. 1 repealed the 25C Energy Efficient Home Improvement Tax Credit, rebates for electric appliances and energy-saving home retrofits are still available through state programs receiving federal funds.Some states with previously ambitious electrification targets, however, retreated. California passed a law pausing all local and state building code updates through 2031. New York Governor Kathy Hochul delayed implementation of a landmark electrification law that would have banned gas in most new buildings.5) Clean Energy Manufacturing Declined Precipitously in 2025, but Clean Energy Jobs Outpace Other Sectors.With changes to federal tax credits under H.R. 1, investment in clean energy manufacturing fell precipitously in 2025, mostly affecting the EV supply chain. Hardest hit were vehicle assembly projects, battery manufacturing, critical minerals projects and electrolyzers. Investments in U.S. clean energy manufacturing fell to $42 billion in 2025, a 17% decline from 2024, according to Rhodium Group. During Q4 of 2025 alone, companies cancelled a record $8 billion in clean energy manufacturing projects, mostly related to EVs, batteries and electrolyzers, with only $3 billion in new announcements in that period. Over the entire year, project cancellations reached $23 billion (5 times 2024 levels and affecting at least 18,000 jobs), compared to $24 billion in announced new manufacturing investments. The loss of future clean energy jobs exacerbates the national trend of declining manufacturing jobs: Tthe U.S. shed 108,000 manufacturing jobs overall in 2025 alone. Solar and wind manufacturing fared better than the EVs supply chain. Solar saw $3 billion in new investment announcements, compared to $300 million in cancellations; wind saw no cancellations during 2025.While 2025 was the second-highest sales year on record for battery EVs, a loss of federal policy support and slowing sales led several automakers to shift EV battery manufacturing facilities to stationary grid storage applications to meet growing data center demand. For example, Ford announced its move from EV manufacturing to grid energy storage systems at its Glendale, Kentucky facility. LG Energy and SK On are also changing from EV to energy storage applications for data centers and grid storage. GM has a deal to provide new and used EV batteries to Redwood Energy for data center storage.These shifts follow years of growth of clean energy jobs, which have outpaced the overall job market as well as fossil fuel jobs. From 2021-2024, clean energy jobs grew 12%, compared to 8% for the overall job market. While hurdles have grown higher, recent data from the Bureau of Labor Statistics still projects double- or triple-digit growth for clean energy jobs between 2024 and 2034.6) Permitting and Siting Challenges Grew Larger Over the Last Year.Headwinds in siting and permitting grew stronger in 2025.For one, federal actions and requirements for additional Department of Interior reviews have made it difficult for wind and solar projects on federal and private lands to obtain federal permits and approvals, resulting in delays and cancellations. Permits that once had a clear process for approval are now required to be reviewed by Cabinet-level staff at the Department of Interior. Further, the administration attempted to halt or limit further work on already fully permitted offshore wind projects nearing completion, most recently with a stop-work order for five permitted projects on the East Coast. The judicial system responded by lifting that order, but policies like these cause turmoil and uncertainty for the U.S. investment environment. They undermine the development of new power generation sources sorely needed to affordably meet growing electricity demand.Meanwhile, utility-scale clean energy projects are increasingly running into community opposition. An annual report from the Columbia Sabin Center, which tracks contested projects and local restrictive ordinances, identified ‘498 contested projects in 49 states, an increase of 32% over last year’s edition, which identified 378 contested projects in 47 states.’ (For more on local restrictions to clean energy, see our recent article.) While permitting and siting issues are not new challenges, they have become more acute and can hamper clean energy development at a time when it needs to be surging ahead. According to Clean Tomorrow, siting legislation was introduced in almost every state legislature last year, with many bills leaning toward anti-clean energy outcomes.At the federal level, permitting reform continues to be a bipartisan topic of interest. Policymakers in Congress have introduced a number of pieces of legislation aimed at accelerating the buildout of energy infrastructure — both clean power and fossil fuels.Clean Energy Momentum Confronts New Hurdles at a Pivotal MomentDespite a turbulent year of fundamental policy changes, clean energy pushed forward in 2025 — even delivering another record-breaking year for solar and storage. Developers brought tens of gigawatts of clean energy online and moved quickly to break ground on clean energy projects, locking in access to federal incentives and ensuring that new solar and wind will continue to be developed in the near-term.Still, the road ahead is far from certain. The industry faces rapidly shifting tariffs, a looming tax-credit cliff, and market volatility driven by everything from data center demand to wars to increasingly extreme weather. Key factors to watch as the year continues include actual demand from large loads, policy approaches to address affordability, evolving trade policy and supply chain issues, and impacts from the conflict with Iran.At the same time, to affordably meet rapidly rising demand, it is imperative that the U.S. upgrades and expands the grid while completing projects that are already underway, particularly wind and solar. Broader permitting reform, which is under discussion at the federal, state and local levels, is also needed to build the right infrastructure — and to remain competitive globally. This is a pivotal moment for the U.S. energy transition. The challenges are real, but so is the momentum. The choices made now — by policymakers, developers, regulators, businesses, investors and more — will set the trajectory for U.S. clean energy for the rest of the decade. View past editions of this article:February 2025 EditionFebruary 2024 Edition

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