A new report shows solar remains the dominant source of new electricity in the United States, even as installations slowed last year. The findings come as Duke Energy plans to expand fossil fuels to meet rising demand in North Carolina.
The U.S. installed 43.2 gigawatts of solar capacity in 2025, a 14% drop from the year before. But solar still accounted for 54% of all new electricity-generating capacity added to the grid, according to a report from the Solar Energy Industries Association and Wood Mackenzie.
Combined with battery storage, the two made up 79% of new capacity.
Despite the slowdown, solar remains the fastest-growing and most widely deployed source of new power nationwide, largely because of its cost and speed.
“Solar power is the fastest and most affordable new source of energy supply,” said Sean Gallagher, senior vice president of policy at the Solar Energy Industries Association. “There’s no fuel cost. The sun’s free, and you’re not subject to the volatility that you see with other fuels.”
That national trend stands in contrast to Duke Energy’s latest long-term plan, which proposes extending coal use and building new natural gas plants while scaling back solar procurement compared with previous projections.
The 2025 Carolinas Resource Plan outlines how the utility intends to meet what it projects will be a surge in electricity demand — driven by population growth, manufacturing and energy-intensive data centers tied to artificial intelligence.
Duke says the plan balances reliability and cost. Company spokesperson Bill Norton has said rates will still rise under the proposal, but less than under the utility’s previous plan.
But clean energy advocates argue the strategy moves in the wrong direction at a time when solar is proving to be both economical and scalable.
“This is the wrong time for us to be turning away from that resource,” said Matt Abele, executive director of the North Carolina Sustainable Energy Association. “Solar continues to be the lowest-cost form of electricity generation available and is a really important tool to help mitigate rising electricity costs.”
Duke Energy did not immediately respond to requests for comment.
A shift in North Carolina
North Carolina has long been a national leader in solar, once ranking second in the country. It now sits closer to fifth, as other states — including Texas, Florida and Arizona — have accelerated development.
Abele said part of that shift stems from policy and market structure. Unlike deregulated states, where independent developers can quickly build projects, North Carolina relies on a utility-controlled planning process that determines what gets built and when.
Recent changes have also reshaped the landscape. State lawmakers eliminated a requirement that Duke cut carbon emissions 70% by 2030, replacing it with broader mandates focused on reliability and cost.
At the same time, Duke’s latest plan delays some solar development while increasing reliance on natural gas — a move critics say could lock in higher costs over time.
Abele pointed to fuel volatility as a key concern.
“A large majority of those rate increases can be directly attributed to the volatility of natural gas costs,” he said. “When those costs go up, they get passed directly on to customers.”
Rising demand, competing solutions
The debate is unfolding as electricity demand surges across the country.
North Carolina is among the fastest-growing states for power demand, driven in part by data centers, manufacturing expansion and population growth.
Gallagher said solar and storage could play a major role in meeting that demand quickly — especially compared with fossil fuel infrastructure that can take years to build.
“It takes five to seven years to build a new natural gas plant,” he said. “A new solar facility can be brought online in a number of months.”
Battery storage is also changing how solar can be used, allowing energy generated during the day to be deployed during peak evening hours.
“Storage is the game changer,” Gallagher said. “It helps smooth out those power prices and make that solar power available all day long.”
Still, the solar industry faces uncertainty.
The report points to federal policy changes, tariff actions and new restrictions on supply chains as factors that delayed projects and contributed to last year’s slowdown.
Those same uncertainties could shape how quickly solar grows in the coming years.
Even so, Wood Mackenzie forecasts the U.S. solar market will nearly triple over the next decade, reaching 769 gigawatts of installed capacity by 2036.
What comes next
For North Carolina, the question is less about whether demand is coming and more about how to meet it.
Duke’s plan calls for a mix of natural gas, extended coal operations, nuclear development and expanded battery storage.
Advocates argue the state should lean more heavily on solar, storage and energy efficiency — including allowing large users like data centers to build their own clean energy resources.
“If we’re limiting how much solar and battery storage can be deployed, we’re going to find ourselves in a difficult position to keep up with demand,” Abele said.
Duke is expected to submit an updated plan later this year.
The outcome will shape not only how North Carolina powers its growth, but how much customers ultimately pay for it.
