Utilities must build new generation at the lowest possible price to provide the electricity their customers need. Choosing unaffordable options that can’t come online in time to meet surging demand could leave consumers footing the bill, or worse, in the dark.

Energy Demand Just Keeps Growing

An unprecedented data center boom could triple energy consumption by 2028, potentially hitting 12% of national total electricity use, up from 4.4% in 2023. Manufacturing has rebounded, fueled by the Inflation Reduction Act attracting $600 billion in industrial investment. Meanwhile, electric vehicles and appliances are nudging up residential power demand as more consumers plug in.

Add in rising air conditioner use as global warming increases temperatures and it’s no surprise the North American Electric Reliability Corporation warned large portions of the U.S. face blackouts.

So far utilities have kept pace by adding gas and renewables. And while gas is the largest overall source of America’s electricity, contributing 40% of generation in 2024 and displacing coal, which has fallen to just 16% of U.S. power, solar is now America’s fastest-growing electricity source.

Solar use has grown 7.8-fold over the past decade, outstripping gas’ 1.4-fold growth rate. Combined with wind power, these renewable technologies provide 17% of U.S. electricity supply, enough to power 70 million average homes – remarkable considering three years ago coal provided three times wind and solar’s combined output.

That’s supplanting gas growth. Solar added 64 terawatt-hours of generation in 2024, larger than last year’s 59 TWh rise in gas, reducing consumer reliance on an inherently volatile fuel that increased electricity bills 14% in 2022.

Solar-Plus-Storage Is Filling the Gap to Meet New Demand

Energy Innovation analysis shows clean energy can come online fast enough to meet rising demand without needing gas to fill the gap, and solar-plus-storage has stepped up.

California, which suffered rolling blackouts in August 2020 during record heat waves, made it through last summer’s record heat without breaking a sweat thanks largely to storage capacity growing from .5 GW in 2018 to 13.3 GW in 2024.

Texas broke power demand records last summer amid massive data center growth and brutal heat waves, and peak summer demand is expected to soar from 85 GW in 2024 up to148 GW in 2030. Adding 19 GW of solar and 6.2 GW of storage since 2019 helped keep the lights on – an 800% increase in solar and 5,500% increase in battery storage over that period.

Solar-plus-storage is solving demand growth by providing reliable power when the grid needs it most – during peak hours. Solar consistently generates electricity to charge batteries, which can discharge their power whenever it’s needed, cheaper than a new gas turbine.

Meanwhile new gas plants face massive hurdles to near-term growth. All major gas turbine manufacturers have delivery backlogs until at least 2029 – meaning a utility that wants to build gas today must wait years to plug it in. “To get your hands on a gas turbine right now and to actually get it to market, you’re looking at 2030 or later,” said NextEra CEO John Ketchum.

Compare that to solar-plus-storage: U.S. Energy Information Administration data shows utilities plan to add 110 GW of solar and 63 GW of storage through 2028, compared to just 25 GW of gas.

American factories can supply utilities with this new solar and battery power. Domestic solar manufacturing capacity more than tripled from 14.5 GW in 2023 to 50 GW in early 2025, and existing U.S. factories can now produce enough to meet nearly all domestic demand.

Battery manufacturing capacity is growing apace – IRA provisions have spurred a “battery belt” stretching from the Upper Midwest to the Southeast, and the U.S. could add more than 80 GW of new storage manufacturing capacity by 2028.

Solar-Plus-Storage Is Keeping Bills Down

Solar-plus-storage’s biggest payoff may be keeping customer costs stable. That’s important considering Americans pay more than ever for power – average U.S. household electricity prices rose 21.9% from 2018 to 2023, and could rise another 7% in 2025.

Energy Innovation analysis found the primary causes of power bill increases are volatile fossil gas prices, coal plants that cost more to run than replacement with renewables, extreme weather, and transmission costs. Outside of wildfire-ravaged California, states that installed the most wind and solar since 2010 including Iowa, Oklahoma, and New Mexico saw the lowest rate increases – lower even than inflation.

Building gas to meet rising power demand risks higher utility bills. EIA predicts a 91% increase in gas costs from 2024 to 2026 with “additional risk over the forecast period” from new liquefied natural gas exports, which could grow more than 16% from 2024 to 2025.

Every “dollar increase in natural gas costs consumers $34 billion plus about $20 billion in higher electricity costs,” said Paul Cicio, President of the Industrial Energy Consumers of America. It’s “only going to get worse from here as LNG exports increase.”

But solar and battery storage costs have both fallen around 90% over the last decade. By 2035, solar costs could fall nearly 10% and battery storage costs could fall nearly 50%.

“New solar plants, even without subsidies, are within touching distance of new U.S. gas plants,” said BloombergNEF’s Amar Vasdev. “Solar will become even more compelling in the coming years, especially if the U.S. starts exporting liquified natural gas and exposes its protected gas market to global price competition.”

Preserving existing federal policies could help ensure these fast-falling prices cut consumer costs. A 2023 study from 17 universities, think tanks, national laboratories, and a federal agency predicted clean energy tax credits could cut monthly customer electricity bills 4.5% in 2030, and up to 8.6% in the decades after that.

But the Trump administration has targeted these provisions to pay for its intended tax cuts for the wealthiest Americans, even though 21 Republican members of the House of Representatives oppose repealing IRA provisions.

February 2025 analysis by Brattle for conservative environmental group ConservAmerica estimates repealing the IRA would spike U.S. electricity costs $51 billion per year by 2035, and utility executives agree. “If you take renewables and storage off the table, we’re going to force electricity prices to the moon,” said Ketchum.

Smart Policy Creates A Stronger, Cheaper Grid

The policy decisions and investment choices our government and utilities make today will determine the reliability and affordability of America’s grid for years to come. With demand rising fast, solar-plus-storage is the best choice to add generation without exposing customers to volatile prices or supply chain challenges.

“We’ve got to be really careful here from an affordability standpoint about the choices we’re making,” said Ketchum. “What we don’t want to do is drive ourselves to only one solution — that being a gas-fired solution — that’s now more expensive than it ever has been in its history. It just so happens that the most economic solution comes with clean energy benefits.”