Despite a slowdown in growth, solar power remains the leading source of new electricity capacity in the United States. Meanwhile, Duke Energy’s plans to expand fossil fuel generation have sparked questions about costs and clean energy in North Carolina.

A new report shows that despite a decline in installations last year, solar power continues to dominate new electricity generation capacity in the United States. This discovery comes as Duke Energy plans to expand its fossil-fuel capacity to meet North Carolina’s growing energy demand. In 2025, the United States installed 43.2 GW of solar power capacity, a 14% decrease from the previous year. However, according to reports by the Solar Energy Industries Association and Wood Mackenzie, solar energy continues to account for 54% of new grid-connected power generation capacity. When combined with battery energy storage, the two together account for 79% of new capacity additions.

Despite signs of a slowdown, solar power remains the fastest-growing and most widely deployed new electricity source nationwide, largely due to its cost-effectiveness and rapid deployment capabilities. “Solar power is the fastest-growing and most affordable new source of energy,” said Sean Gallagher, Senior Vice President of Policy at the Solar Energy Industries Association. “There are no fuel costs. The sun is free, and you’re not subject to the price volatility that plagues other fuels.”

This national trend stands in stark contrast to Duke Energy’s latest long-term plan, which proposes extending the use of coal and constructing new natural-gas-fired power plants, while reducing the scale of solar energy procurement compared with earlier projections. The 2025 Carolina Resources Plan outlines how this utility intends to meet the anticipated surge in electricity demand, driven primarily by population growth, manufacturing expansion, and energy-intensive data centers supporting artificial intelligence. Duke Energy stated that the plan strikes a balance between reliability and cost. Company spokesperson Bill Norton said that, under the proposal, electricity prices will still rise, but by a smaller margin than the company had previously planned. However, clean energy advocates argue that this strategy is heading in the wrong direction, now that solar power has been proven both cost-effective and scalable.

“Now is the wrong time for us to walk away from this resource,” said Matt Abel, Executive Director of the North Carolina Sustainable Energy Association. “Solar power remains the lowest-cost form of electricity generation available today and an essential tool for helping to mitigate rising energy prices.” Duke Energy did not immediately respond to a request for comment.

The Transformation of North Carolina

North Carolina has long been a national leader in the solar energy sector, once ranking second nationwide. It has now slipped to near fifth place, as other states—including Texas, Florida, and Arizona—have accelerated their pace of development. Abel pointed out that this shift is partly attributable to policy measures and market structure. Unlike deregulated states that allow independent developers to rapidly advance projects, North Carolina relies on a utility-controlled planning process to determine what and when to build. Recent developments have also reshaped the landscape. State lawmakers repealed a mandate requiring Duke Energy to reduce carbon emissions by 70 percent by 2030, replacing it with broader directives that place greater emphasis on reliability and cost. Meanwhile, Duke Energy’s latest plan has delayed some solar-energy projects while increasing reliance on natural gas, a move critics say could lock the company into higher costs over the long term.

Abel regards fuel price volatility as a key concern. “The vast majority of electricity price increases can be directly attributed to fluctuations in natural gas costs,” he said. “When these costs rise, they are passed on to consumers without delay.”

Demand is rising, and stakeholders are engaged in strategic negotiations.

As national electricity demand surges, a related debate is unfolding. North Carolina is one of the fastest-growing states in terms of electricity demand, driven in part by data center development, manufacturing expansion, and population growth. Gallagher stated that solar power and energy storage can play a crucial role in meeting energy demand—especially when compared with fossil-fuel infrastructure, which can take several years to build. “Building a new natural gas power plant takes five to seven years,” he said, “whereas a new solar facility can be commissioned in just a few months.” Battery energy storage is also transforming how solar power is used, enabling the energy generated during the day to be discharged during peak demand periods in the evening.

“Energy storage is a game-changer,” Gallagher said. “It helps smooth out electricity price volatility and makes solar power available around the clock.” Nevertheless, the solar industry continues to face uncertainty. The report notes that changes in federal policy, tariff measures, and new restrictions on supply chains were factors that led to project delays and contributed to last year’s slowdown. The same uncertainty could shape the pace of solar energy growth in the coming years. Even so, Wood Mackenzie forecasts that the U.S. solar market will nearly triple over the next decade, with installed capacity reaching 769 GW by 2036.

Future Outlook

For North Carolina, the question is not whether demand will materialize, but how to respond. Duke’s plan calls for a mix of natural gas, extended coal operations, nuclear energy development, and expanded battery storage. Advocates argue that the state should place greater reliance on solar power, energy storage, and energy efficiency— including by permitting large consumers such as data centers to develop their own clean-energy resources. “If we cap the deployment of solar power and battery storage, we will find ourselves in a position where it is difficult to keep pace with demand,” Abel said. Duke Energy expects to submit an updated plan later this year. The outcome will not only shape how North Carolina advances economic growth, but also determine how much customers ultimately pay for it.