US renewable energy and energy storage development powered through major policy changes in 2025 to help meet rising energy demand, according to a new report.
Retail electricity demand rose 2% year-over-year in 2025 and 8% over the past decade, largely met by additions of renewables, batteries, natural gas and energy efficiency, BloombergNEF and the Business Council for Sustainable Energy said Feb. 18 in their 2026 Sustainable Energy in America Factbook.
As suppliers scramble to meet demand, however, "ratepayers are increasingly feeling the pinch," said the report, adding that electricity costs are "top of mind for policymakers."
"With energy demand rising and concerns about energy costs mounting, we also need speed coupled with affordability," Business Council for Sustainable Energy President Lisa Jacobson told reporters at a press briefing ahead of the report's release.
"[Last year] has shown that despite uncertain market and policy conditions, this broad portfolio of energy efficiency, natural gas and renewable energy are meeting energy demand and are helping to put downward pressure on energy costs ... but we have much more to do."
Jacobson said Congress and the Trump administration should prioritize technology-neutral permitting and siting reform, invest in energy infrastructure and continue supporting research and development.
Data center demand, affordability concerns
Data centers contributed significantly to rising energy demand, growing more than 150% over the past five years and 21% year-over-year, the report said. Through the first quarter of 2025, the US had a cumulative 23 GW of live data center IT capacity and 48 GW under construction or committed, it added.
Data centers have faced opposition partly because ratepayers are concerned about rising electricity bills. Retail prices nationally rose 2.3% year-over-year and 32% over the past decade, the report said.
"There's a lot of nuance into recognizing what is causing power price increases and what is not," Anthony Fratto, senior director of research and analysis at the American Clean Power Association, said during the briefing. Fratto pointed to factors such as rising natural gas prices in 2022, which utilities have spread out over the past few years, as well as the cost to replace aging transmission and distribution lines and expenses from extreme weather events like wildfires.
"All this load growth that's occurring now, it may not show up in your power bill in the next six months. But in two to four to six years, if we don't build enough power to meet expected demand growth, it's just going to place even more upward pressure on your retail power prices," Fratto said.
Investments hit record $378 billion
The US added 54 GW of new utility-scale generation and storage in 2025, primarily solar and storage, according to the report, which relied on BloombergNEF and US Energy Information Administration data.
Renewables accounted for 61% of new capacity at 33 GW, including 27 GW of utility-scale solar, the report said. Developers added a record 15 GW of utility-scale energy storage, up 35% year-over-year. Wind additions totaled 6 GW, while natural gas additions doubled year-over-year to 5 GW, rebounding from a record low in 2024.
US power generation reached a 20-year high in 2025, rising 3% year-over-year to reach 4,514 TWh. Natural gas represented 40% of total generation, zero-carbon sources provided 43% and coal's share increased to 16%.
Investments in renewables and energy transition sectors grew 3.5% year-over-year to a record $378 billion. Power purchase agreements for zero-carbon electricity reached 29.5 GW in 2025 as technology companies signed deals to power AI-related data centers.
"What we still see is a very strong market for carbon emission-free procurement," Nidhi Thakar, senior vice president, policy at the Clean Energy Buyers Association said at the briefing, noting a shift to procure more nuclear and hydropower.
A record $115 billion was invested in grid infrastructure in 2025, according to the report.
'Turbulent year'
Demand for renewables remained strong despite sweeping policy changes and tariff-related uncertainty, with continued growth in energy investment and deployment.
"This was a turbulent year … but what we see across all of this analysis is that sustainable energy really held its ground in 2025," Trina White, BloombergNEF's senior associate, North American energy transition, said at the briefing.
"Factors beyond just government support and especially factors even beyond just the climate crisis have been bolstering the energy transition," White added.
The July 2025 budget bill altered key clean energy tax credits, requiring businesses to adjust to accelerated phaseouts and new restrictions, including compliance with foreign entities of concern (FEOC) requirements.
The Treasury Department and IRS recently issued interim FEOC guidance, which "provide a bit more surety and there's still open questions that they have not answered," Fratto said.
