Renewables Grow Strongly in the US, but the Gap with China is Widening

in Japanese

Despite President Trump’s relentless attacks on clean energy technologies, renewable energy (RE) and batteries continue to experience sustained growth in the United States. This success is primarily due to their robust cost competitiveness and tax credits. Among these technologies, solar photovoltaic (PV) is making considerable progress, including in terms of domestic manufacturing capacity. However, these significant advances remain insufficient to catch up with China, the United States’ main economic rival. This is because in China, the growth of RE is not strong, but explosive.

RE represented 73% of new electricity consumption in the United States in 2025

In the United States, the year 2025 was marked by significant growth in electricity consumption (+138 TWh, or +3.1%), mainly due to increasing demand from the commercial and residential sectors.

“Consumption” means: total national generation + imports – exports (the United States is traditionally a net importer of electricity from Canada and Mexico, the two countries with which its power grid is interconnected).

RE accounted remarkably for almost three-quarters of the growth in electricity consumption [Figure 1].

Figure 1: United States – Change in Electricity Supply, 2025-2024

As a result, the share of RE reached just over a quarter (25.5%) of the United States’ electricity consumption in 2025 [Figure 2], compared to 20.1% in 2020.

Figure 2: United States – Electricity Consumption Mix (%), 2025

Since the beginning of the decade, the increase in the share of RE is mainly due to solar (+5.3 percentage points) and wind (+2.0 percentage points) [Figure 3]. It has led to a decrease in the shares of coal (-2.6 percentage points) and nuclear (-2.0 percentage points).

Figure 3: United States – Electricity Consumption Mix (%), 2020-2025

In the United States, unsubsidized solar PV ($58/MWh on average for new power plants) and onshore wind ($61/MWh) are the cheapest new electricity generation technologies [Figure 4]. Economically, they are therefore the preferred solutions for meeting the new electricity demand.

However, they remain more expensive than amortized power plants, such as combined cycle gas turbines (CCGT) ($31/MWh) and nuclear reactors ($34/MWh).

Figure 4: United States – Power Generation Cost of Selected Technologies, 2025

In January 2021, former President Biden announced that the United States aimed for a carbon free power sector by 2035. To achieve this ambitious goal, proactive decarbonization policies were essential. For example, subsidies to make new solar PV and onshore wind competitive with existing CCGT, thus enabling their accelerated deployment.

In line with this objective, the Inflation Reduction Act was enacted in August 2022, outlining the key implementation details of the investment and production tax credits. [For detailed explanations of these tax credits, see: Renewable Energy Institute, United States Carbon Free Power Sector by 2035: Economics and Technology Propel Renewables (September 2024).]

The One, Big, Beautiful Bill Act, signed by President Trump in July 2025, restricts the eligibility conditions for new solar PV and onshore wind projects for tax credits and sets several deadlines:¹

• Projects whose construction begins on or after January 1, 2026, are not eligible for tax credits if they have certain ties with foreign entities of concern (FEOC), namely China, Russia, Iran, and North Korea. Specifically, thresholds are set for a project to be eligible for credits: the minimum share of a project’s manufactured product costs attributable to non-FEOC must be 40% in 2026 and 45% in 2027.
• Projects whose construction begins between January 1, 2026, and July 3, 2026, are eligible for tax credits if they comply with the FEOC rules.
• Projects whose construction begins on or after July 4, 2026, must comply with the FEOC rules and be placed in service no later than December 31, 2027, to be eligible for tax credits.
• Projects whose construction begins on or after January 1, 2028, are not eligible for tax credits.

In this less favorable context, the role of states as a counterweight to presidential power is important.

States implement key policies such as renewable portfolio standards (RPS) and clean energy standards (CES) (including RE and nuclear). These standards require electricity suppliers to provide their customers with defined minimum shares of renewable or clean energy by a specified date.

RPS compliance costs are passed on to consumers. They averaged around 4% of retail electricity bills across states, based on the most recent data available (typically 2023 or 2024).² This is modest, especially considering the benefits of reduced carbon dioxide emissions and better protection against the volatility of fossil fuel prices.

As of December 2025, 27 states – more than half of the country’s states – had implemented a RPS and 13 states had implemented a CES (all requiring 100% clean energy) [Table 1].

Last year, states maintained their previous commitments, with a few exceptions.

In June, Maine introduced a new 100% CES for 2040, including a 90% RPS. Prior to this new legislation, the state aimed for a 100% RPS by 2050. This political decision prioritizes accelerating decarbonization rather than solely promoting RE.

In July, Connecticut lowered its RPS for 2030 from 48% to 37%. However, it maintained its commitment to achieving its 100% CES for 2040. Slower RE growth over the next five years will complicate progress toward decarbonization.

Table 1: United States – RPS & CES by State, as of December 2025

Solar PV dominates RE growth, its national supply chain is once again fully covered

In the United States, solar power (essentially PV) alone accounted for 84% of RE growth in 2025 [Figure 5].

Figure 5: United States – Change in RE Electricity Generation, 2025-2024

In addition to being the cheapest electricity generation technology among new technologies, solar PV benefits from the shortest lead times in the United States: only 2 years, including development and construction for utility-scale projects [Table 2].

This is a crucial advantage when it is necessary to respond quickly to new electricity demand, a situation the United States is currently facing.

Table 2: United States – Lead Time by Power Plant Type

Moreover, solar power is popular in the United States, and its good social acceptance facilitates the smooth deployment of this technology.

According to the Pew Research Center, a nonpartisan think tank that conducts annual surveys of Americans’ opinions on energy, 77% of Americans favored increased development of solar power in 2025.³ By comparison, 68% favored increased development of wind power and 59% favored increased development of nuclear power.

The popularity of solar PV stems from its ability to be installed on individual homes, thus enabling personal energy independence. Solar panels are also perceived as less visually obtrusive than wind turbines and less dangerous than nuclear reactors.

The integration of solar PV into power system operations is facilitated by the significant expansion of ever cheaper batteries (-93% for lithium-ion battery pack prices since 2010).⁴

It is estimated that a record capacity of 13 GW of batteries has been installed in the United States in 2025, allowing the cumulative capacity to reach 45 GW.⁵ At the end of last year, the states with the largest cumulative battery capacity were California (18 GW) and Texas (12 GW).

In these two states, the primary application of batteries is energy shifting for short-duration (e.g., charging a battery with surplus solar energy at near-zero marginal cost during daytime and discharging it to meet peak demand after sunset).

On the manufacturing side, the American solar PV industry, which was in a critical situation just a few years ago, has been fully revived thanks to a combination of protectionist measures (i.e., import tariffs) [Table 3] and support mechanisms (i.e., tax credits). [For detailed explanations of these tax credits, see: Renewable Energy Institute, Progress in Diversifying the Global Solar PV Supply Chain (December 2024).]

Regarding import tariffs specifically, assuming a price of $0.09/W for modules produced in China, applying a 350% tariff on these modules (as fixed since November 2025) raises their price to $0.41/W (excluding freight and insurance).⁶

This price is not competitive compared to modules imported from other countries, such as Indonesia, Laos, India, and Malaysia ($0.27/W on average, including import tariffs, freight, and insurance) and to modules manufactured in the United States ($0.36-0.42/W).⁷ This effectively discourages the purchase of modules produced in China for the development of solar PV projects in the United States.

Table 3: United States – Import Tariffs on Solar Cells and Modules from Selected Countries,
as of December 31, 2025

For several years, the United States did not have production capacity to manufacture ingots, wafers, and cells. At the end of 2025, the country was once again able to cover the entire solar PV supply chain. More specifically, from upstream to downstream, the United States’ annual manufacturing capacity reached 26 GW for polysilicon, 2 GW for ingots, 2 GW for wafers, 3 GW for cells, and 69 GW for modules.⁸ For comparison, the country’s annual installed solar PV capacity reached 51 GW in 2025.

This strengthens the United States’ resilience in the face of China, which overwhelmingly dominates the global solar PV supply chain.

China expands its lead over the United States

Between 2020 and 2025, the gap between China and the United States widened in terms of the share of RE in electricity consumption. In 2020, this share was 7.2 percentage points higher in China (27.3% versus 20.1%). By 2025, it was 11.5 percentage points higher (36.9% versus 25.5%) [Figure 6].

It is worth noting that the share of RE in electricity consumption experienced relatively weak growth in both countries in 2021 and 2023 (i.e., +0.4-0.6 percentage points). In 2021, this slowdown was due to the sharp rebound in electricity demand following the COVID-19 pandemic that struck the world in 2020. In 2023, it was due to droughts that negatively impacted hydroelectric power generation.

Figure 6: China and United States – Share of RE in Electricity Consumption, 2020-2025

In China, the growth of RE is explosive. The Chinese power system is 2.3 times larger than that of the United States. In 2025, compared to the United States, the increases in installed capacity in China for solar PV, wind and batteries were respectively 7.3, 14.8 and 3.6 times greater (!) [Figure 7].

Figure 7: China and United States – Change in installed Capacity of Selected Clean Energy Technologies, 2025-2024

In 2025, annual installations of solar and wind reached new highs in China, as developers rushed to commission their projects before the introduction, starting June 1, of a contract-for-difference mechanism deemed less advantageous. [For a detailed explanation of the introduction of this mechanism, see: Renewable Energy Institute, Progress of China and India in Switching from Coal to Renewables (November 2025).]

For example, last year in China, the average monthly installed solar capacity was 47 GW from January to May and 20 GW from June to December.⁹

According to BloombergNEF, in 2026, new solar and wind installations are likely to decrease, but they are expected to remain high: 321 GW and 94 GW respectively.¹⁰

It is also interesting to examine how the gap between China and the United States is expected to evolve.

Published in November 2025, the International Energy Agency (IEA)’s latest World Energy Outlook offers informed projections.

In this report, the IEA develops two scenarios for each of these countries: the Current Policies Scenario (“CPS”) and the Stated Policies Scenario ("STEPS”).

The CPS considers existing policies and regulations and adopts a cautious perspective on the pace of deployment and integration of new energy technologies into the energy system.

The STEPS includes policies that have been formally proposed but not yet adopted. Furthermore, in the STEPS, the barriers to the introduction of new technologies are lower than in the CPS.

Regarding China, the STEPS assumes that provincial and national non-fossil power targets will be extended beyond their current expiration dates. It also assumes additional power market reforms and enhancement of interprovincial exchanges.

Regarding the United States, the STEPS assumes that the states’ RPS and CES will be extended and strengthened beyond their current expiration dates.

In both scenarios, the IEA projects that the RE gap between China and the United States will double over the next decade, reaching around 23 percentage points in 2035 [Figure 8].

Figure 8: China and United States – Share of RE in Electricity Generation, Projections for 2035

These results reflect different policy orientations and different levels of relative cost competitiveness [Figure 9].

While in China, new solar PV and onshore wind were already cost-competitive with existing coal (the country’s main electricity generation technology) in 2024, in the United States they will be cost-competitive with existing gas (the country’s main electricity generation technology) by 2035.

Figure 9: China and United States – Assumptions Regarding Power Generation Costs under the CPS, Projections for 2024 and 2035

In conclusion, while President Trump aggressively promotes 20th-century energy production technologies (i.e., fossil fuels and nuclear power), China is massively deploying and exporting 21st-century electrical technologies (e.g., solar PV, wind, and batteries). These opposing strategic approaches will have significant consequences for the economic development of both countries and their respective influence on global geopolitics.