2025 was a big year for cleantech and energy transition. Here's a roundup of some of the most important things that happened — and a couple of trends I'll be following in 2026.

Let's start with the big picture.

The Global Story: The Clean Energy Transition Is Still On

While renewables faced political headwinds in the United States, globally, the energy transition continued to gather steam.

Renewable Penetration Accelerates, Overtakes Coal

In its mid-year review, energy think-tank Ember reported that for the first time in history, renewables overtook coal as a share of global electricity generation. As of the report's publication, renewables accounted for 5,072 TWh (34.3%) of production; coal fell 0.6%, to 4,896 Twh (33.1%). Since 2010, "solar has gone from smallest to largest source of capacity."

The IEA projects that renewable capacity will double between 2025 and 2030. Batteries are continuing to get cheaper, and deployment of battery storage is quickly making 24 hour dispatchable solar a reality, according to Ember.

China is driving much of this acceleration, but the growth of solar is having disruptive effects across much of the developing world. In Pakistan, for example, soaring grid utility costs have driven huge imports of rooftop solar capacity.

The EV Revolution Is Accelerating

Globally, the move from internal combustion engines (ICE) to electric vehicles (EVs) has been rapid and continues to accelerate, with China again leading the way. Approximately 50% of auto sales in China this year were electric, with Chinese producer BYD leading the market.

Sales of hybrid and electric trucks have risen dramatically in China as well — so dramatically that they are rapidly "resetting global fuel-demand trajectories," according to Business Standard. As recently as of 2020, almost all new Chinese trucks ran on diesel. Today, 22% are battery-powered. Year-over-year, Chinese diesel consumption is falling by double digits.

Energy Security Is the New "Green Premium"

Energy security was the global sleeper story of energy transition in 2025.

As reports from the Carlyle Group and Ember explained, the growing insecurity of global trade is driving nations to reduce their imports of fossil fuels by increasing nuclear and renewable energy. Escalating trade conflicts and the threat of shooting wars are putting pressure on countries around the world to reduce their dependence on volatile fuel imports. Countries are increasingly realizing that these conflicts are threatening global trade agreements that they have taken for granted.

A tariff and a security premium are analogous to a carbon tax and a green premium—and may be more effective at spurring transitions. France has one of the lowest carbon footprints in the world, but it didn’t get there because its leaders wanted to save the climate—it got there because they wanted energy independence.

— New Joule Order, Carlyle Group, p. 11.

The pressure to reduce dependence on imported fuel is particularly acute in China and Europe, which don't have large oil and gas reserves.

This is not the first time energy security has driven investment toward fossil fuel alternatives. In the 1970s, the peaking of conventional oil in the United States, coupled with OPEC oil shocks, jump-started a nascent solar industry and sparked the first widespread push for efficiency standards.

The difference today is that solar costs 99% less per watt than it did in the 1970s.

Peak Fossil Fuel Trade and Demand Destruction

The confluence of these factors has led to a marked slowdown in the international oil and natural gas trade. China, whose oil consumption has increased year-over-year for decades, saw oil consumption plateau and decline slightly. The IEA pointed to the increase in EVs and the rapid buildout of public transportation, particularly high-speed rail, as significant factors.

Meanwhile, there are signs that the international market for liquified natural gas (LNG) is collapsing.

After Russia invaded Ukraine in 2022, European gas buyers turned to the international LNG market. The United States, Qatar, and other major producers rushed to bring new LNG projects on line. Since then, however, Europe's overall gas consumption has dropped precipitously. In the developing world, LNG has developed a reputation as "an expensive, unreliable fuel source" which has "prompted some buyers to reverse plans centered on greater LNG consumption" according to the Institute for Energy Economics and Financial Analysis (IEEFA). In late 2024, IEEFA predicted that LNG markets are headed for "an unprecedented supply glut."

In response to oversupply, in October, Pakistan asked Qatar to divert 24 contracted LNG tankers to the international market. By all accounts, the growth of distributed solar has been a major driver of collapsing gas demand.

The Biggest Domestic Stories

OBBBA and Executive Orders Targeting Clean Energy

Without a doubt, the biggest U.S. clean energy story of 2025 was the One Big Beautiful Bill Act (OBBBA) and the Trump administration's other actions against clean energy.

On his first day in office, the president ordered all agencies to "immediately pause" disbursement of IRA and Infrastructure Investment and Jobs Act funds. Multiple courts blocked the funding freeze as an illegal impoundment of funds Congress had appropriated.

With the passage of the OBBBA in July, the administration shifted from blocking disbursements to eliminating the programs themselves. In addition to many other provisions, the bill gutted clean energy tax credits that had been created or expanded under the Biden administration's Inflation Reduction Act (IRA).

Under the new legislation, residential tax credits are effectively gone — electric vehicle tax credits died on September 30th, and residential energy credits expire on December 31, 2025.

On the commercial side, solar and wind projects must now either begin construction by July of 2026 or be completed by the end of 2027 — a significant acceleration from prior law, which had given developers until 2029 or 2030 to be placed in service.

To be eligible, projects must also comply with more stringent foreign entity of concern (FEOC) rules. These rules eliminate incentives for projects that have components made by China.

One small silver lining was battery storage: standalone systems remain eligible for both investment and production tax credits through 2033, with a gradual phase-down through 2036.

Battery manufacturers will still have to abide by FEOC rules, however. Manufacturers that have domestic production will likely benefit; some companies that make EV batteries are pivoting to the battery storage market.

Wind Battles

Meanwhile, the administration attempted to kill offshore wind development with aggressive executive action. These actions have faced lawsuits and losses in court, but have successfully slowed several large projects.

On day one, the president issued an executive order temporarily preventing any new leases for wind projects on the outer continental shelf. Federal agencies immediately suspended the issuing of new permits, leases, and authorizations.

In April, the administration ordered Equinor, a Norwegian wind company, to stop construction on the Empire Wind project off Long Island. At the time of the order, the project was 30% complete. The project was later restored after negotiations with New York Governor Hochul.

In August, the administration ordered Revolution Wind, a project off the New England coast that was 80% complete, to halt construction as well. In September, a judge issued an injunction reversing that rule.

On May, 17 states filed a lawsuit challenging the day one executive order. In December, a federal judge struck down the order, ruling that it was "arbitrary and capricious."

So at the moment, it seems as if the administration's executive actions against wind may not go through. Nevertheless, they have created significant delays, cost wind developers millions, and left uncertainty in the industry.

More broadly, wind battles highlight the degree to which the administration is willing to pursue any administrative or legislative means necessary to halt or slow renewable energy projects.

Nearly 2,000 Power Projects Cancelled

In part as a result of these policies, nearly 2,000 power projects in the United States — a sixth of the country's total generation capacity — was cancelled this year, according to Michael Thomas of Cleanview.

The vast majority of these cancellations are of solar, storage, and wind projects. In addition to Trump administration policies, local opposition to projects, a failure to build transmission lines, and worsening economics for battery storage because of tariffs all played a role.

"The current trajectory is unsustainable," Thomas writes.

 America is simultaneously approving unprecedented electricity demand while cancelling the generation needed to meet it, creating policy incoherence that threatens grid reliability, affordability, and the country’s competitiveness in the global AI race.

Data Center Wars Heat Up

Speaking of AI: after several years of mostly flat growth, experts are now projecting huge increases in electricity load in the coming years — much of it driven by AI and large data centers.

Data centers use a staggering amount of electricity. Debates on how to reliably meet this demand dominated much of the energy discussion this year.

On the question of supply, there were no easy answers. Renewables — especially large-scale solar + storage — are likely the fastest, cheapest, and easiest source of power. But solar+storage also has capacity limits, which is a problem for an industry that needs 99.999% reliability. Adding enough storage to deliver 24/7 firm capacity changes the economics significantly.

Utilities and data center operators are turning to natural gas and nuclear, but face roadblocks here as well. High global demand has created shortages for natural gas turbines, which are projected to last until the early 2030s. New and restarted nuclear plants face similarly long timelines and are only projected to provide 10% of data center demand by 2035.

The need to procure capacity is already driving up costs significantly for customers in some regions, with the PJM as the most notable example. PJM's Independent Market Monitor found data center load added $9.3 billion to its 2025/2026 capacity auction — costs that are already being passed through to customers.

A bipartisan coalition of state legislators is pushing for a “bring your own capacity” rule that requires data centers to contract for new power plants that match their electricity needs or accept reduced service during peak times.

Proposals for data centers to reduce demand during peak times, or purchase flexibility from the surrounding community through virtual power plants (VPPs) are among a handful of proposed solutions.

Clean Energy's Resilience

In spite of intense political headwinds and setbacks in the United States — including the large numbers cancelled projects Michael Thomas reported on — the clean energy industry has shown some surprising signs of resilience.

According to the Solar Energies Industry Organization (SEIA), the United States added 11.7 GW of new solar capacity in the third quarter of this year — the third largest on record. Solar and storage accounted for 85% of all new power added to the grid in 2025.

Cleantech stocks have also rebounded, outperforming other stock indexes. According to a Bloomberg report, analysts at Jefferies Financial Group are calling it "glory days" for green investors, pointing to staggering $2 trillion invested globally last year. Ironically, part of the reason is that it simply will not be possible to meet AI data center demand in the short term without renewables.

Trends I'm Watching in 2026

Is the AI Bubble Bursting?

Af this writing, The Wall Street Journal is reporting that CoreWeave, a cloud computing company often seen as a poster child of the new AI economy, has lost $33 billion in value in six weeks (46% of its value) — stoking fears among skeptics that the AI bubble may finally be bursting.

What are the energy implications if projected data center growth doesn't materialize?

Will Utilities and Data Centers Lose Their "Social License?"

The partially accurate perception that data centers are responsible for rapidly rising utility bills is creating a political wave that could hinder big tech's AI ambitions.

In a recent Open Circuit podcast, Jigar Shah made the point that people across the political spectrum seem to be against data centers these days.

It’s not just Bernie and the MAGA people who hate data centers ... the Bulwark Podcast hates data centers ... Pod Save America came out against data centers ... And so if you’re a governor that just got elected in Virginia and New Jersey, you’re like, “I don’t know how much I should do for data centers.” ... All these red state governors are like, “I don’t know. I think politically we should be against data centers.”

The administration's ongoing war against renewables — the only source of generation that can meet data center demand in the short term — is likely to make the problem worse.

The backlash may not be limited to data centers. As electricity rates rise, utilities will feel the heat as well.

In the United States, nearly 70 percent of electric customers are served by investor-owned utilities (IOUs). These regulated monopolies make money by investing in infrastructure and earning a regulator-approved return.

Most people take this system for granted, but as a recent American Prospect essay argued, "2025 may be the year this regulatory framework collapses under its own contradictions."

In just the first half of the year, IOUs requested approval for an unprecedented $29 billion in additional revenue. They cited growing electricity demand, including from data centers powering artificial intelligence, needed upgrades to aging infrastructure, and mandates to decarbonize in several states. Yet rate hikes have also translated into skyrocketing CEO compensation and record-breaking profits for shareholders. And in many parts of the country, IOU rates are rising much faster than those of their municipally owned counterparts.

It will be interesting to see where "regulatory capture" sits in the energy word cloud by the end of 2026.

Short of dismantling the IOU model outright, expect to see more pushback and new proposals on pricing, especially around distributed energy resources and electrification.

The economist Ahmad Faruqui, who I interviewed last month, has been one of several voices pushing back against utility narratives on rooftop solar and electrification rates, among other topics.

Journalist Leah Stokes is another. Stokes recently wrote a piece for the Atlantic offering several proposals to reduce customer costs, including making electricity free during the middle of the day (when grid solar is abundant), reducing profits for IOUs, having states build transmission systems (instead of IOUs), and shifting the costs of climate-related grid-hardening away from ratepayers to states and/or fossil fuel companies.

In short, while the clean energy transition faced undeniable headwinds in 2025, it maintained momentum internationally. Energy security will continue to be a driver of change.

In the United States, renewables + storage still have structural and price advantages. Clean energy is retrenching but the transition is still moving forward.

In 2026, a lot will depend on how permitting, data center build out, and public pressure on utilities play out.

Affordability will remain a major issue. Clean energy advocates will be well-positioned if they can position themselves as cheaper and more efficient alternatives to fossil fuels.

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