Solar power and battery storage are expected to lead new U.S. generating capacity additions in 2025, according to the Energy Information Organization (EIA).
The EIA expects 63 gigawatts (GW) of new utility-scale electric-generating capacity to be added to the U.S. grid in 2025. This is 30% higher than the 48.6 GW of capacity added in 2024, the largest capacity installation year since 2002. Solar and battery storage are expected to contribute 81% of this year’s capacity increase.
Solar Additions
In 2024, generators added a record 30 GW of utility-scale solar power to the U.S. transmissions network, contributing 61% of capacity additions. The EIA expects this trend to continue in 2025, with the addition of 32.5 GW of new utility-scale solar capacity.
Texas and California are expected to account for nearly half of these additions, with 11.6 GW and 2.9 GW to be added, respectively. Meanwhile, Indiana, Arizona, Michigan, Florida, and New York are each expected to add over 1 GW of new solar capacity in 2025, contributing around 7.8 GW in total.
In addition to the development of new solar farms, the U.S. has also dramatically expanded its solar manufacturing sector. In February, the country’s solar module manufacturing capacity surpassed 50 GW.
Since the introduction of the Inflation Reduction Act (IRA), the Bipartisan Infrastructure Law, and the CHIPS Act, U.S. solar module manufacturing has grown five-fold, making the U.S. the third-largest solar module producer in the world, according to the Solar Energy Industries Association.
During the last two years, solar manufacturers have announced $36 billion in investments in the sector, supporting the creation of an anticipated 44,000 manufacturing jobs. This investment is expected to increase the total solar module manufacturing capacity to 56 GW, which is enough to meet the U.S. solar project pipeline demand. This is key considering that the Trump administration is threatening tariffs on the import of various products from Canada, Mexico, China, and other countries.
Battery Storage Additions
U.S. battery storage additions could reach record levels this year, with 18.2 GW of utility-scale battery storage expected to be added to the grid, higher than the record figure of 10.3 GW added in 2024. This marks a significant increase from the 4 megawatts (MW) added to the grid in 2010. By July 2024, there was over 20.7 GW of battery energy storage in the U.S.
Battery storage helps to balance supply and demand and improve grid stability. It is expected to play a leading role in the future of the world’s energy as the U.S. and other countries worldwide increase their renewable energy capacity. Batteries will be used to store excess electricity from renewable energy projects, such as wind and solar farms, during high production hours. They will store this energy to deliver to consumers during low/no production hours. For example, it will supply electricity from solar projects to the grid at night, when the sun is not shining but the power demand remains high.
While the U.S. battery storage capacity is expected to increase this year, the industry could suffer from the imposition of tariffs on imports by the Trump administration, as the U.S. is still heavily reliant on China for its lithium-ion batteries.
In 2023, the U.S. had 60 GWh of lithium-ion battery manufacturing capacity for all applications. However, the demand for batteries for electric vehicles alone exceeded this capacity. In the second quarter of 2024, China contributed 82% of U.S. lithium-ion battery imports, followed by Japan, Hungary, South Korea, and Poland.
President Trump’s introduction of additional 10% tariffs on Chinese goods, on top of the existing tariffs, could have a significant impact on the price of U.S. battery imports.
Other Energy Sources in 2025
The EIA expects 7.7 GW of wind energy capacity to be added to the U.S. grid in 2025, an increase from 5.1 GW in 2024. Texas, Wyoming, and Massachusetts will contribute nearly half of all new wind additions.
Natural gas is expected to contribute 4.4 GW of new grid capacity this year, with Utah, Louisiana, Nebraska, North Dakota, and Tennessee leading these additions.
Meanwhile, the EIA predicts that coal retirements will accelerate, with 6%, or 11 GW, of coal-generating capacity being removed from the U.S. electricity sector in 2025, and a further 2%, or 4 GW, leaving the grid in 2026.
Despite the uncertainty surrounding the U.S. renewable energy industry at present, solar power and battery storage are expected to contribute a large proportion of the additions to the U.S. grid this year. Wind power will also play a major role in new transmission network additions. However, the introduction of tariffs on the import of goods from China could drive up the cost of batteries, which may contribute to higher spending by utilities and may ultimately drive up consumer costs.
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