Solar and Battery Storage Expected to Lead New Electricity Generation Capacity for 2025: EIA

The U.S. Energy Information Administration has released predictions for 2025 in its latest Preliminary Monthly Electric Generator Inventory report. The organization announced that new utility-scale electric-generating capacity in the U.S. will reach 63 gigawatts (GW), led by additions to solar and battery capacity.

The latest report noted that in 2024, utility-scale solar capacity made up 61% of capacity additions in 2024, and this year, there will be about 32.5 GW added. 

In total, new solar projects in 2025 are expected to make up more than 50% of the planned added utility-scale electric generation for 2025. Combined with planned battery storage capacity, the share is 81% of total capacity additions.

Last year, Texas and Florida led the country in new solar additions. This year, Texas will again lead with 11.6 GW of planned new utility-scale solar capacity, followed by California with 2.9 GW. Indiana, Arizona, Michigan, Florida and New York will each add at least 1 GW, totaling about 7.8 GW of new solar capacity across these five states.

In October 2024, EIA reported that battery storage capacity was expanding rapidly in the U.S., and that trend is also expected to continue into 2025. According to the latest report, U.S. battery storage capacity increased by 10.3 GW last year and could reach a record high if the planned 18.2 GW of battery storage capacity begins operations this year.

“This growth highlights the importance of battery storage when used with renewable energy, helping to balance supply and demand and improve grid stability,” EIA explained. “Energy storage systems are not primary electricity sources, meaning the technology does not create electricity from a fuel or natural resource. Instead, they store electricity that has already been created from an electricity generator or the electric power grid, which makes energy storage systems secondary sources of electricity.”

According to the report, wind capacity is expected to increase slightly after a decline in 2024. Last year, wind capacity additions reached 5.1 GW, the lowest amount since 2014, but new wind capacity is expected to reach 7.7 GW this year. This is primarily because of two major offshore projects, including the 800 megawatt (MW) Vineyard Wind 1 in Massachusetts and the Revolution Wind project, with 715 MW capacity, in Rhode Island. Texas, Wyoming and Massachusetts are expected to lead wind capacity additions for 2025.

While renewables are set to take a large share of new utility-scale electricity generation capacity for 2025, fossil fuel-based capacity retirements are simultaneously expected to decline this year. EIA reported that 8.1 GW of coal-fired electricity generation capacity is expected to retire this year, up from the 4 GW retired in 2024. Petroleum power plants, which make up less than 3% of total electric-generating capacity in the U.S., is expected to retire 1.6 GW.

Natural gas retirements are expected to reach 2.6 GW and will primarily include retirement of the less-efficient, simple-cycle natural gas turbine power plants. However, 4.4 GW of newly added natural gas capacity — including half from less-efficient plants and 36% from more-efficient, combined-cycle plants — is planned for 2025.

Although the report of renewables leading the way for new utility-scale electricity generation for 2025 is hopeful, concerns remain over how renewable energy will fare with challenges from the current administration. Already, officials have sued over inaccessible Inflation Reduction Act funding, some of which was dedicated to renewable energy projects. 

As Utility Dive reported, investors have also become cautious, potentially because of uncertainty with how clean energy will fare with the current administration along with high interest rates. Still, there have been investments in energy storage, and larger solar projects (those above 1 MW) actually saw a 21% increase in funding for 2024 compared to 2023.

“That says more about solar as an asset class. A mature asset class that is an attractive investment,” Raj Prabhu, CEO and co-founder of Mercom Capital Group, told Utility Dive.

“I see much more aggressive forecasting when it comes to energy storage installations in 2025,” Prabhu added. “So growth is a little faster in energy storage, and they are key to a lot of energy deals right now.”