US Clean Power Development Sees Record Progress, As Well As Stronger Headwinds
After several record-breaking years, the U.S. clean energy sector faces a critical moment.
Solar deployment and electric vehicle (EV) sales broke records in 2023 and 2024. Renewables now dominate new power generation capacity, while new domestic clean energy manufacturing facilities are popping up around the nation.
However, headwinds are also getting stronger. Several challenges persist that are slowing deployment, including lack of sufficient grid capacity and large interconnection queues, permitting and siting challenges, high interest rates, and lingering supply chain issues. These factors have been holding clean power development back at a time when it needs to be surging ahead.
Meanwhile, the need for increased clean energy development has become even more urgent in recent years, as skyrocketing demand from data centers and more is leading to significant electricity load growth in the U.S. for the first time in decades. And with a new federal administration creating roadblocks for leasing and permitting wind energy, freezing funding, and threatening to upend policies like the Inflation Reduction Act and Bipartisan Infrastructure Law, it may become even harder to make progress.
Here, we take stock of recent successes and challenges to clean energy development in the U.S., using data through 2024:
Recent Trends in US Clean Power Development
Following the record-breaking outcomes of 2023, 2024 was another impressive year for clean energy deployment in the United States. These upward trends signal that clean electricity sources are an increasingly vital part of the U.S. economy and power system, with renewable sources and battery storage making up the vast majority of new additions to the grid.
Solar and battery storage continue to set installation records, while wind energy has plateaued.
Solar surpassed 2023’s record installations in 2024, adding an estimated 39.6 gigawatts (GW) of capacity, compared to 27.4GW in 2023. Installed solar capacity in the U.S. now totals about 220 GW, enough to provide over 7% of the nation’s electricity. This continues a decade-long trend of rapid growth in solar power.
Battery storage nearly doubled in 2024, with total installed capacity reaching almost 29 GW — and projected to grow another 47% in 2025. This growth in capacity will help support the grid when variable renewable energy technologies, such as solar and wind, are unavailable, making the U.S. power system more stable and secure.
At the same time, onshore wind capacity growth has tapered off, with only 5.3 GW of new generation added in 2024, significantly less than wind installation levels in previous years. According to the Energy Information Administration (EIA), installed wind capacity totaled 153 GW at the end of 2024. Limited growth of wind power resulted in part from a focus on repowering older facilities as well as continued challenges related to supply chains, financing, interconnection and permitting.
Geothermal and nuclear see renewed interest
Carbon-free energy sources that can operate around the clock, such as geothermal and nuclear, are quickly gaining attention. Despite generating only 0.4% of the total U.S. utility-scale electricity mix, geothermal technologies are seeing interest from large energy buyers and utilities. For example, Fervo Energy recently announced the execution of two power purchase agreements (PPAs) with Southern California Edison that would add 320 MW of geothermal to the grid. New geothermal technologies can provide 24/7 power, have dropped in cost, and can be sited in a wide range of geographies.
Over the last decade, nuclear power plants have been decommissioned at a faster rate than they have been built, with nuclear accounting for 18.6% of all U.S. generation through 2023. But it’s now seeing renewed interest from corporate purchasers. For example, in 2024, Microsoft signed a 20-year power purchase agreement with Constellation for nuclear energy from a previously shuttered unit at the Three Mile Island plant; Amazon said it would invest $500 million in small modular nuclear reactors (SMRs); and Google announced plans to purchase power from SMRs owned by Kairos Power.
Adding it up: Is the grid decarbonizing fast enough?
Taken all together, renewables vastly outpaced other generation sources and collectively accounted for around 90% of the United States’ new installed capacity in 2024. With the new projects online, renewables (including wind, solar, geothermal and hydropower) and battery storage now make up 30% of the country’s large-scale power generating capacity. In 2024, all carbon free electricity sources, including nuclear, supplied nearly 44% of electricity, while renewables, including small-scale solar, supplied nearly 25%.
So where does this put us in terms of achieving a carbon free grid? Studies show that reaching 90% or more carbon-free electricity by 2035 — a key element of achieving a clean energy economy — would require 60-70 GW of new renewables per year over the next decade, as well as other forms of carbon-free power. Last year, the U.S. saw additions of about 45 GW of solar and wind combined. This increase from 2023 shows robust progress, but we still need more growth in carbon free generation to meet grid decarbonization targets.
Although EV sales reached a new record in 2024, growth has slowed.
In addition to the record battery storage installations by utilities in the power sector, battery electric cars continue to gain ground in the U.S. A record-breaking 1.3 million electric vehicles (EVs) were sold in 2024—accounting for around 8.7% of new cars sold. Similar to 2023, EV sales in Q4 2024 set a new record for volume sold in a single quarter (365,824 vehicles), boosted in part by attractive lease deals and manufacturer discounts. EV volumes were also more evenly distributed across more manufacturers, according to Kelly Blue Book data.
While the total number of EVs sold set a record, the rate of EV sales growth continues to slow compared to previous years. The number of EVs sold in 2024 were up only 7.3% compared to 2023, slower than the 49% increase seen from 2022 to 2023.
The U.S. also continued to make progress in expanding EV charging infrastructure in 2024, adding more than 37,700 charging ports, including 12,500 fast chargers. The country now boasts more than 204,000 publicly available charging ports nationally.
But more chargers are needed to meet growing demand. Public and private investment is continuing, with states awarding $330 million to EV charging developers under the National Electric Vehicle Infrastructure (NEVI) program in 2024. However, there is uncertainty over this program’s future given a recent executive order and actions by the Trump administration to block disbursement of these funds and a program pause by the Federal Highway Administration.
New domestic manufacturing facilities are helping to build a U.S. clean energy supply chain, but faster progress is needed.
While recent clean energy manufacturing has been dominated by places like China and the European Union, the U.S. has been scaling up its domestic supply chain, driven in part by investments from the CHIPs and Science Act, Bipartisan Infrastructure Law, and Inflation Reduction Act. The country will need to continue this expansion to stay competitive globally.
According to American Clean Power Association, at least 160 clean energy manufacturing facilities or expansions have been announced since August 2022, driven by tax credits in the Inflation Reduction Act, with 47 announced in 2024 alone. Collectively, these facilities are expected to result in 100,000 new manufacturing jobs and at least $500 billion in investment, $75 billion of which has already been spent. Domestic manufacturing of solar modules in particular grew substantially in 2024 to surpass 50 GW — enough to meet all existing U.S. solar demand — with five new or expanded manufacturing facilities in Alabama, Florida, Ohio and Texas. In addition, manufacturing of silicon cells for solar resumed in the U.S. in 2024 for the first time since 2019.
With this surge in investment, clean energy is a dominant driver of domestic jobs in the energy industry. According to Deloitte, clean energy jobs represented more than half of energy jobs added in 2023, with hiring for renewable energy — particularly solar — at twice the levels of the fossil fuel industry.
States are rolling out new policies and programs to support climate and clean energy action.
2024 saw some very encouraging policy developments at the state level, from 100% clean electricity commitments to enhanced vehicle emissions standards. Vermont updated its renewable portfolio standard to require that utilities achieve 100% clean energy by 2035. Maryland’s governor signed an executive order requiring the state to develop a framework for a 100% clean energy standard by 2035. Massachusetts passed a climate omnibus bill that is, in part, intended to accelerate clean energy deployment through permitting reform.
In addition to these important state policy actions, residents in several states voted to support pro-climate ballot initiatives during the November 2024 election. Washington state voters rejected a proposal to end a cap-and-trade program. Hawaii and California voters supported new funds for climate resilience. Louisiana voters ensured that revenues from state-owned clean energy is transferred into a coastal protection fund.
With so much uncertainty at the federal level going forward, states and cities can play an even more important role in energy policy over the next four years. They are demonstrating that there is support for continued clean energy progress.
Despite Progress, Headwinds to Clean Energy Development Are Growing Stronger
Despite this record-breaking progress and renewables’ growing share within the U.S. power sector, clean energy deployment has been stymied by several barriers. The industry has faced persistent challenges including insufficient transmission access, high interest rates, an uptick in local siting opposition and supply chain issues. These headwinds are becoming even stronger under the Trump administration.
Lack of sufficient transmission and interconnection queues are slowing clean energy deployment.
The U.S. transmission grid is in dire need of expansion, particularly given projections of rapidly rising demand. Studies estimate that transmission infrastructure will need to grow by as much as 57% by 2035 to meet increased electricity demand. Through November 2024, an estimated 275.5 miles of high-voltage (345 kV or greater) transmission lines have been deployed — a considerable increase from 2023’s 59.5 miles of high-voltage lines, but still insufficient given grid needs nationally. FERC estimates that an additional 1,236 miles of lines have a high probability of being completed by the end of April 2027.
Furthermore, interregional transmission is needed for grid reliability and energy security, particularly with electricity demands increasing. According to a recent study by North American Electric Reliability Corporation (NERC), at least 35 GW of additional transfer capability will be necessary by 2035 to ensure grid stability.
Lack of sufficient transmission capacity has prevented new clean energy projects from coming online. According to the Lawrence Berkeley National Lab, the current active capacity in U.S. interconnection queues is twice that of all existing U.S. power plants, with renewable energy projects representing over 95% of projects in the queue.
FERC Order 2023 addressed interconnection reforms such as updates to the processes transmission providers use to study and connect generation facilities to the power system, but it has yet to significantly address the interconnection queue backlogs. In addition, substantial progress was made in 2024 with the adoption of FERC Order 1920 (later modified as Order 1920a), the landmark transmission planning rule that addresses long-term planning and processes for allocating transmission costs. Implementation will take time, and details of how regions comply remain to be seen, but the rule should help planners better anticipate future needs.
Local opposition to clean energy project siting is increasing.
Local opposition to clean energy projects continues to be a prominent concern for new development. Survey data from Lawrence Berkeley National Lab suggests that clean energy developers often believe local opposition is among the leading causes of project delays or cancelations. The data also suggests that developers often do not begin community engagement efforts until after a project site is selected, likely skipping over a key step of procedural justice and leading to more opposition and longer development timelines.
There was a sharp uptick in local opposition to clean energy projects and policies in 2024, some of which resulted in severe siting restrictions or outright bans. About 15% of U.S. counties established clean energy bans in 2024 – a more-than 110% increase from the previous year. A study by Columbia Law School identified 395 local restrictions to clean energy siting across 41 states, as well as 19 state-level policies that are sufficiently stringent to prohibit renewable project development.
Some states such as California, New York and Virginia have adopted policies to facilitate faster siting by transferring some responsibilities from the local to the state level, while a policy to do so in Michigan has faced significant opposition. These issues of state and local authority will likely continue to play out as new policies are implemented.
Interest rates remained high in 2024, keeping clean energy costs elevated.
Higher borrowing rates continue to weigh on the clean energy industry, increasing project costs. After rapidly raising interest rates in 2023 to battle inflation, the Federal Reserve announced several rate cuts in late 2024, bringing rates down to between 4.25% and 4.5%. These rate cuts, however, have since slowed due to lingering concerns over inflation. The higher upfront capital costs of clean energy investments make them particularly sensitive to interest rate levels and borrowing costs relative to other electricity generation sources, which have more of their costs associated with variable fuel prices.
Despite modest interest rate cuts in 2024, the average prices of renewable power purchase agreements (PPAs) grew last year, though not as quickly as in 2023. Solar PPA prices rose 10.4% year-over-year, while wind PPA prices rose 14.1% year-over-year between 2023 and 2024. PPA prices are not expected to plateau until the 2030s.
Despite the higher prices, corporations continued to sign new clean energy deals in the first half of 2024, resulting in 32 corporate customers announcing 6.9 GW of new clean energy deals.
Higher costs for distributed solar have had significant impacts on the residential solar market as well. In California, higher borrowing costs, as well as changes to the state’s net-metering policy (among other factors) have increased installation costs of solar plus storage systems by 17% for end-users. Following a rush to connect new solar PV systems under the previous net metering rules that offered better incentives, resident requests for solar installation quotes have fallen to about 60% of historical levels. Because of shifts in California and elsewhere, SEIA has projected a 26% national decline in the residential solar sector in 2024 compared to 2023.
Lingering supply chain issues continue to slow clean energy projects, while new trade tariffs will impact costs.
Shortages of transformers — which moderate voltages and are essential for connecting clean energy to the grid — have continued to plague the industry, delaying clean energy projects. According to Wood Mackenzie, the lead time to procure transformers jumped from 50 weeks in 2021 to 120 weeks in 2024. The timeline is even longer for large transformers — up to 210 weeks. At the same time, transformer prices have risen as much as 4-9 times in the last three years.
Tariffs are also increasingly affecting the industry, and proposed tariffs from the Trump administration will likely bring even larger impacts. In 2024, the Biden administration imposed aggressive tariffs on Chinese electric vehicles, solar cells, and some steel, tungsten and aluminum components in an effort to protect U.S. manufacturers. This included a doubling of the tariffs previously in place (increasing from 25% to 50%) on solar components from China, and a removal of the tariff exemption for solar production from four Southeast Asian countries where Chinese solar manufacturers had shifted production.
Higher production costs from tariffs can encourage domestic manufacturing growth, but have also resulted in higher costs of installations. Previous tariffs on solar PV components have been passed on to the consumer at a rate higher than 100% — a $1 tariff causes the final installation price to be $1.35 higher. Research has also shown that while domestic manufacturing of some components did expand after previous solar tariffs were implemented, demand for solar installations would have been 17.2% higher in the absence of tariffs.
The Trump administration threatens new roadblocks to clean energy development.
The Trump administration threatens to exacerbate some of the persistent challenges to clean energy while also creating new roadblocks. The administration has already issued a slate of energy-related executive orders to undo activities from the Biden administration, encourage fossil fuel development, enable LNG exports, ease permitting regulations, pause offshore wind leases, slow EV uptake and freeze disbursements of funds. President Trump also declared a national energy emergency to address rising electricity demand and the need for new power generation and grid upgrades. While legal battles have begun, this unprecedented effort to block funding is creating widespread impacts in states and communities across the country, as well as impacting the domestic industry.
The potential impacts of these and other issues affecting the future of the energy transition will be addressed more deeply in a forthcoming article.
Building a Clean Energy Future in the US
Solving the challenges facing clean energy is taking on new urgency, as the U.S. is seeing increasing electricity demand for the first time in decades. The clean energy industry is well positioned to provide this much-needed power while also creating jobs, boosting energy security and helping to improve the country’s economic competitiveness. Now is the time to confront the mounting headwinds and invest in building a clean energy future that’s good for people, nature and the climate.
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