EIA expects more solar capacity, higher power prices

Robert Walton | Source: Utility DIVE | Posted 04/14/2025

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Alongside the rise in renewable energy, EIA expects higher power prices, a modest uptick in demand and a short-term increase in coal generation.

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The U.S. Energy Information Administration (EIA) projects a significant increase in solar energy generation, expecting a 35% rise in 2025 and an 18% increase in 2026. This growth in renewable energy is anticipated alongside higher power prices, with the average wholesale price expected to reach $45 per megawatt hour in 2025, a 19% increase from 2024. Residential electricity prices are also set to rise, averaging 17 cents per kWh in 2025 and 17.6 cents per kWh in 2026, compared to 16 cents per kWh in 2023.

Despite efforts to support coal production, the EIA forecasts a decline in U.S. coal output from 580 million short tons in 2023 to 470 million short tons by 2026. However, a short-term increase in coal production is expected this year due to stronger-than-anticipated output. Meanwhile, solar capacity is projected to grow from 91 GW in 2023 to 182 GW in 2026, with wind capacity also increasing. Natural gas demand is expected to rise, primarily driven by exports and increased consumption in residential and commercial sectors, maintaining its share of electricity generation at 40% in 2025 and 2026.

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EIA expects more solar capacity, higher power prices

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