Solar power supplied the majority of the growth in U.S. electricity demand last year. The new analysis from global energy think tank Ember showed the importance of this renewable source in meeting surging domestic needs.
U.S. electricity demand rose by 135 terawatt-hours (TWh) in 2025. It was a 3.1% increase, the fourth-largest in the past 10 years. During the same time, solar generation expanded by 83 TWH, rising 27% from 2024. Ember found that the increase covered 61% of all new electricity demand, far more than any other source.
"Solar growth was essential in helping to meet fast-rising U.S. electricity demand in 2025," said Ember's chief analyst Dave Jones. "It generated where it was needed, and—with the surge in batteries—increasingly when it was needed," he added.
Southern Sunshine
Regional data shows the U.S. South played an outsized role in this trend. Texas alone accounted for the largest absolute increase in solar output, reflecting both strong demand growth and rapid deployment of utility-scale projects. Solar met 81% of electricity demand growth in both Texas and the Midwest, while covering about one-third of demand growth in the Mid-Atlantic region.
Several large facilities came online during the year, including the 153-megawatt Felina Project in El Paso, Texas, the 150-MW Ratts 1 Solar Project in Indiana, and the 145-MW Axial Basin Solar Project in Colorado, according to federal energy regulators. High solar irradiance, faster permitting, and available land made these locations lucrative.
Timing also mattered. Ember found that the increase in solar generation fully met the rise in U.S. electricity demand during daytime hours between 10 a.m. and 6 p.m. Eastern. Rapid growth in battery storage enabled solar to cover a portion of evening demand, shifting power generated during peak sunlight to later hours.
The U.S. Energy Information Administration's Short-Term Energy Outlook expects electricity generation to continue rising over the next two years, with solar remaining the fastest-growing source.
Utility-scale solar generation could climb from about 290 billion kilowatt-hours in 2025 to 424 billion kilowatt-hours by 2027, driven by nearly 70 gigawatts of new capacity scheduled to come online. Texas is expected to lead, with solar generation in the ERCOT market nearly doubling over the period.
Precious Metal Gatekeeper
However, a surge in silver prices is emerging as a potential risk to the pace of solar expansion. Spot silver prices have surged in recent months. Spot prices hit a fresh all-time high of $99.36 today, posing a potential risk to the pace of solar expansion.
"Spiking commodity prices are creating irresistible cost pressures for solar manufacturers," Yali Jiang, an analyst at BloombergNEF, said, according to Tiger Brokers. He warned that higher silver costs are likely to push module prices up after years of losses across the sector.
The cost of silver used in solar cells is now more than 29% of a panel's total cost, up sharply from 3.4% in 2023 and about 14% in 2025.
Manufacturers have strived to reduce silver use, cutting the average from around 11 milligrams per watt in 2024 to about 9 milligrams per watt in 2025. Yet, aggressive substitution carries technical and financial risks.
"If a panel fails after ten years but has a twenty-year warranty, the manufacturer could face massive liabilities," said Gregor Gregersen, founder of Silver Bullion Group, clarifying why progress in reducing silver use has been steady rather than abrupt.
Price Watch: Invesco Solar Energy (NYSE:TAN) is up 9.98% year-to-date.
Photo by Bilanol via Shutterstock
