Solar Expansion Leads Projected U.S. Power Generation Growth

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Written by Aaron Studwell, Ph.D., Energy Meteorologist & Analyst (Sugar Land, Texas)

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Summary

Solar power will be the primary driver of electricity generation growth in the United States over the next two years, even as the nation's power grid faces growing pressure from rising demand.

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Solar Plants in the Development Pipeline Being Commissioned

New research from the U.S. Energy Information Administration (EIA) shows U.S. electricity generation will grow through 2027, led by rapid solar expansion. Rising power demand and expanding battery storage are reshaping the grid, while traditional fuels remain important but gradually lose share. Substantial solar capacity that has been in various stages of development and construction in recent years is being commissioned and adding new generation to the grid.

Per the EIA report, total U.S. electricity generation totaled about 4,260 billion kilowatt-hours (kWh) in 2025. Generation is expected to continue increasing, rising by roughly 1.1% in 2026, then accelerating to 2.6% in 2027. While electricity demand is growing, the sources supplying that power are gradually shifting away from traditional fuels toward renewables.

Click on the image at right for a chart of power generation by source.

Solar's Increased Share of Domestic Generation

Coal, natural gas, and nuclear power continue to fuel most of the United States' power supply. Natural gas remains the single largest source of generation, though its share is forecast to slowly decline as more renewable energy comes online. Coal generation rose in 2025, influenced by colder weather, higher natural gas prices, and emergency authorizations issued by the Department of Energy.

An underlying assumption by the EIA is coal-fired generation's share will fall again as aging power plants retire and face competition from cheaper alternatives. However, this may not occur for several years, depending on which path the current Administration takes.

Solar power stands out as the fastest-growing energy source. The EIA projects solar generation will increase from about 290 billion KWh in 2025 to approximately 424 billion kWh by 2027. Much of this growth comes from large utility-scale solar projects, especially in Texas, California, and the Southwest. Wind generation is also expected to rise, though more slowly and unevenly across regions.

Click on the image at right for a chart of power generation changes by region.

Challenges Faced

One of the key challenges highlighted by the EIA is rising electricity demand. Growth in data centers, artificial intelligence, electric vehicles, and industrial electrification is increasing the strain on the power grid. This new and ever-increasing demand requires continuous electricity, not just during peak daytime hours. Both grid and generation reliability are a growing concern for utilities and regulators.

BESS to the Rescue?

Battery energy storage systems, often called BESS, are playing an increasingly important role in addressing these challenges. Batteries allow excess electricity from renewables to be stored and used later, helping smooth out fluctuations in generation. During periods of high demand or low renewable output, stored energy can be released quickly to support the grid. This flexibility improves reliability, reduces the risk of outages, and allows renewables to replace a larger share of fossil fuel generation.

The EIA's research shows that the combination of rapid solar growth and expanding battery storage is reshaping the U.S. power sector. While traditional fuels remain essential, renewables and storage are becoming central to meeting rising demand and maintaining grid stability in the years ahead.

Key Takeaways

• Solar power is projected to be the fastest-growing source of U.S. electricity generation through 2027, driven by large utility-scale projects, particularly in Texas, California and the Southwest.
• Total U.S. electricity generation is expected to increase modestly in 2026 before accelerating in 2027, matching rising demand.
• Natural gas remains the largest single source of power generation, while coal's role is expected to decline over time, though the timing depends on policy and plant retirement decisions.
• Rising electricity demand from data centers, artificial intelligence, electric vehicles, and industrial electrification is increasing strain on grid and generation reliability.
• Battery energy storage systems are becoming critical for managing renewable variability, supporting grid stability, and enabling higher penetration of solar and wind resources.

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About IIR News Intelligence
IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resources' Global Market Intelligence (GMI).

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).