Fact vs Fiction: Renewables Surging Against Fossil Fuels

Record renewables pipeline set to dominate US grid through 2026

US energy developers have lined up 86 gigawatts of new electricity capacity for 2026. This represents the largest single-year addition since 2002. Renewables and battery storage account for 93% of that total.

The figures come from the US Energy Information Administration’s February 2026 generator inventory. Solar projects make up 43.4 gigawatts. Battery storage adds another 24 gigawatts. Wind contributes 11.8 gigawatts. Natural gas, by contrast, accounts for just 6.3 gigawatts.

For UK businesses tracking energy markets and supply chain implications, these numbers matter. They show how quickly the US grid is shifting away from fossil fuels. Consequently, companies with US operations or suppliers need to understand the commercial and compliance context driving this change.

Solar and storage projects concentrated in three states

Texas leads solar development with 17.4 gigawatts planned for 2026. This represents 40% of the national total. Arizona and California each account for 6% of planned solar capacity.

The largest single project is Tehuacana Creek 1 Solar in Texas. It combines 837 megawatts of solar with 418 megawatts of battery storage. This configuration reflects a broader trend: developers increasingly pair solar with storage to provide power after sunset.

Battery storage projects total 24 gigawatts across the US in 2026. Texas again dominates with 53% of planned capacity. California follows with 14%, while Arizona accounts for 13%.

Wind capacity additions reach 11.8 gigawatts in 2026. This more than doubles 2025 levels. Major projects include the 3.65-gigawatt SunZia onshore wind farm in New Mexico. Offshore wind is also expanding, with Vineyard Wind 1 adding 800 megawatts off Massachusetts and Revolution Wind contributing 715 megawatts near Rhode Island.

Market forces drive expansion despite political opposition

The Trump administration has consistently promoted fossil fuel production. Federal policy emphasizes oil, gas, and coal development. However, market economics tell a different story.

In 2025, the US added 53 to 54 gigawatts of utility-scale capacity. Renewables and storage comprised between 61% and 93% of new builds, depending on how you categorize hybrid projects. Natural gas additions doubled year-on-year but remained secondary to clean energy.

Renewables generated 25.7% to 26% of total US electricity in 2025. This compares with 24.1% in 2024. Natural gas remains the largest single source at 40%, but its share is gradually declining. Meanwhile, solar recorded the fastest growth rate of any power source.

During 2025, renewables added 55.8 gigawatts to the grid. Fossil fuels and nuclear combined added just 0.8 gigawatts. This gap illustrates the momentum behind clean energy investment, regardless of federal rhetoric.

Several factors explain this disconnect. Solar and wind costs have fallen dramatically over the past decade. Corporate buyers increasingly demand renewable electricity to meet their own climate commitments. State-level policies in key markets like California, Texas, and New York provide additional incentives. As a result, developers follow the money toward renewables.

Grid investment and demand growth support transition

US utilities and grid operators invested $115 billion in 2025 to support capacity expansion. This spending addressed transmission constraints, interconnection backlogs, and system upgrades needed to integrate variable renewable generation.

Electricity demand is growing modestly. The Energy Information Administration projects a 1.1% increase in 2026, from 4,260 terawatt-hours in 2025 to approximately 4,304 terawatt-hours. Growth comes primarily from data centers, industrial electrification, and electric vehicle charging.

Solar generation is projected to rise from 290 terawatt-hours in 2025 to over 420 terawatt-hours in 2026. Battery storage plays an increasingly important role in balancing supply and demand, particularly in markets like Texas where renewable penetration is high.

The US renewable energy market was valued at $260.4 billion in 2025. Forecasts suggest it will reach $579.9 billion by 2034, representing a compound annual growth rate of 9.3%. Globally, renewables reached 793 gigawatts of new capacity in 2025, surpassing coal generation for the first time.

Implications for UK businesses with US exposure

UK companies with US operations should note several practical consequences. First, energy procurement strategies need updating. The US grid is becoming cleaner faster than many businesses anticipated. This creates opportunities to secure renewable power purchase agreements at competitive prices, particularly in Texas, California, and the Southwest.

Supply chain considerations also shift. Manufacturers with US facilities may face pressure from customers to demonstrate clean energy use. Public sector buyers in states like California and New York increasingly require suppliers to report emissions and source renewable electricity. These requirements mirror the direction of UK policy under frameworks like PPN 06/21.

For UK businesses considering US expansion, site selection increasingly depends on grid composition. States with high renewable penetration offer easier paths to clean energy sourcing. Texas provides abundant solar and wind but faces grid reliability questions. California offers strong policy support but higher overall energy costs.

Reporting requirements are also evolving. US subsidiaries of UK-listed companies must track Scope 2 emissions. As the grid mix changes rapidly, emissions factors shift correspondingly. Businesses need systems to update these calculations frequently rather than relying on outdated regional averages.

Financial planning must account for energy price volatility. Natural gas prices drive electricity costs in many US markets. However, solar and wind now set marginal prices during large parts of the day. This changes the risk profile of energy budgets, particularly for businesses that can shift consumption to coincide with renewable generation peaks.

Policy tensions create both risks and opportunities

The mismatch between federal policy and market reality creates uncertainty. The administration has proposed measures to slow renewable development, including changes to permitting rules and tax credit eligibility. However, most 2026 projects are already contracted and financed, limiting near-term impact.

State policies partly insulate renewable development from federal shifts. California, New York, and several other states maintain their own clean energy mandates and incentives. These create a floor under demand regardless of federal policy changes.

Nevertheless, longer-term risks exist. Federal tax credits for solar and wind investments could be reduced or eliminated. Transmission planning processes might prioritize fossil infrastructure. Trade policies could increase costs for imported solar panels and wind turbine components.

For UK businesses, this policy uncertainty reinforces the value of flexible energy strategies. Long-term fixed-price power purchase agreements lock in current economics but reduce flexibility if policy or market conditions shift. Shorter-term contracts or hedging instruments may prove more suitable in the current environment.

Grid constraints remain the primary barrier

Interconnection queues present the biggest obstacle to renewable development. Projects wait an average of three to five years for grid connection approval. This delay stems from inadequate transmission capacity in many regions, particularly those with the best wind and solar resources.

The Midcontinent Independent System Operator queue alone contained over 1,000 gigawatts of proposed projects as of late 2025. Many will never be built. However, the backlog illustrates the scale of developer interest in renewables compared with fossil projects.

Transmission investment lags generation capacity growth. Building new high-voltage lines requires navigating multiple state regulatory processes and land-use approvals. Federal coordination is limited, slowing projects that cross state boundaries.

This creates practical challenges for businesses seeking renewable energy. Even in states with abundant solar and wind resources, securing a specific allocation from a new project can prove difficult. Corporate buyers increasingly turn to virtual power purchase agreements as a workaround, but these don’t provide physical delivery of power.

Essential facts about 2026 US capacity additions

• Total planned capacity for 2026 reaches 86 gigawatts, nearly double the 53 gigawatts added in 2025.
• Solar accounts for 43.4 gigawatts or 51% of 2026 additions, with Texas alone representing 17.4 gigawatts of that total.
• Battery storage contributes 24 gigawatts, up from 15 gigawatts in 2025, with 53% located in Texas.
• Wind capacity additions total 11.8 gigawatts, more than doubling 2025 levels and including major offshore projects in the Northeast.
• Natural gas accounts for only 6.3 gigawatts, representing roughly 7% of total 2026 additions.
• Renewables generated 25.7% of US electricity in 2025, up from 24.1% in 2024, with solar showing the fastest growth rate.
• The US renewable energy market was valued at $260.4 billion in 2025 and is forecast to reach $579.9 billion by 2034.

What UK businesses should consider now

Companies with US operations or supply chains should review their energy procurement approach. The rapid shift toward renewables creates pricing opportunities, particularly for businesses that can commit to longer-term contracts in high-growth states.

SBS works with UK businesses expanding internationally to map energy risks and opportunities across different markets. Our net-zero program for carbon reporting compliance helps companies track emissions across multiple jurisdictions, including US operations that require Scope 2 calculations.

Businesses should also assess whether their US suppliers face energy transition risks. Companies relying on fossil-based generation may encounter rising costs or compliance challenges as state-level policies tighten. Diversifying suppliers to include those with renewable energy strategies reduces this exposure.

For businesses considering US market entry, energy should feature prominently in site selection. Access to renewable electricity increasingly influences both operating costs and the ability to meet customer requirements. States like Texas offer abundant renewable capacity but require careful assessment of grid reliability. California provides policy stability but higher overall energy costs.

Companies operating in sectors with significant US public sector exposure should monitor procurement policy developments. Federal agencies and state governments increasingly require suppliers to demonstrate emissions reductions and renewable energy use. This mirrors requirements UK businesses already face domestically through frameworks like PPN 06/21.

Training teams to understand US energy market dynamics proves valuable for businesses with American operations. The market structure differs significantly from the UK, with wholesale electricity pricing, renewable energy credit systems, and state-by-state regulatory variations. SBS Academy training on Scope 3 emissions covers international supply chain considerations, including US-specific reporting requirements.

Where to find authoritative US energy data

The US Energy Information Administration publishes monthly electricity data including detailed capacity additions, generation statistics, and grid composition by region.

For businesses tracking renewable energy procurement options, the National Renewable Energy Laboratory provides technical analysis and market assessments across solar, wind, and storage technologies.

Companies considering US expansion should consult the Department of Energy’s Office of Energy Efficiency and Renewable Energy for state-level policy summaries and incentive programs.