Washington, D.C., February 18, 2026 – A significant uptick in U.S. electricity demand was recorded in 2025, marking a departure from decades of stagnation and coinciding with a rise in electricity prices. This development, along with unforeseen policy shifts, posed both challenges and unexpected opportunities for the energy sector, according to the newly released 2026 Sustainable Energy in America Factbook by BloombergNEF (BNEF) and the Business Council for Sustainable Energy (BCSE).
The year saw an increase in both wholesale and retail power prices amidst heightened political attention on energy affordability. Retail electricity demand rose by 2% in 2025 compared to the previous year, marking an 8% increase over the last decade. Despite significant challenges, various energy sectors, such as energy efficiency, renewable energy, and sustainable transportation, have spurred U.S. power generation to its highest in two decades.
“2025 was a significant year for U.S. energy industries, with impactful market and policy changes that have altered the trajectory for all sectors,” stated Lisa Jacobson, President of BCSE. “These fast-moving dynamics provide an opportunity to accelerate investment into a broad portfolio of sustainable energy technologies.”
Data Centers: A Major Driver of Increased Energy Demand
The 2026 Factbook highlights data centers as a key factor behind the rising U.S. power demand, with their electricity consumption skyrocketing over 400% in the past decade. By the first quarter of 2025, data center IT capacity in the U.S. reached 23 gigawatts (GW), with an additional 48 GW planned or under construction. Despite this surge in consumption, total primary energy use grew by only 1.2% in 2025, thanks to long-term investments in energy efficiency.
Electricity costs have become a focal point for policymakers, particularly in regions dependent on natural gas, such as the Northeast and Mid-Atlantic. For example, New York State saw a 62% rise in wholesale power prices from 2024 to 2025, while New England experienced a 60% increase. Nationally, residential electricity prices rose by 32% over the last decade.
“As demand from energy-hungry data centers continues to grow, we’ll likely continue to see upward pressure on power prices,” explained Ethan Zindler, BloombergNEF’s Head of Country and Policy Research. “The need to expand supply from sustainable energy sources has never been clearer.”
Expansion of Sustainable Energy Technologies
In 2025, the U.S. commissioned 54 GW of new utility-scale generation and storage capacity, the most in over two decades. Renewable sources constituted 61% of this new capacity. Notably, utility-scale solar led with 27 GW commissioned, while a record 15 GW of energy storage was added. Investment across energy transition sectors increased by 3.5% to a record $378 billion.
Corporate power purchase agreements for zero-carbon electricity reached an unprecedented 29.5 GW in 2025. Additionally, electric vehicle (EV) sales hit a record 1.6 million units, driven by the impending expiration of federal tax credits. With the rise of EVs and AI data centers, grid infrastructure investment reached $115 billion.
“The need for electricity infrastructure is growing rapidly with rising EV sales and the AI data center build-out,” noted Trina White, BloombergNEF’s Senior Associate for North American Energy Transition.
Challenges with Policy and Permitting
The energy sector’s growth in 2025 faced hurdles due to policy uncertainty stemming from 87 new U.S. trade and tariff policies. The abrupt phasing out of federal tax incentives in late 2025 further complicated matters. Federal permitting delays also slowed energy project advancements, with 377 GW of new capacity applying to connect to the grid.
“Businesses are ready to deploy solutions to meet energy demand, but they need certainty that policies and permits will not change once commitments to long-term energy sector investments have been made,” said Lisa Jacobson, BCSE President.
The 2026 Sustainable Energy in America Factbook comprises over 60 slides filled with data visualizations, offering an extensive overview of the U.S. energy landscape. It details the contributions of key energy sectors and provides insights into market and investment trends, technological advancements, and policy developments.
Access the complete 2026 Sustainable Energy in America Factbook at bcse.org/factbook.
Original Story at about.bnef.com