Not even Nostradamus could have predicted the turmoil in the energy sector in 2025. Since the policy goal in the United States seems to be eliminating energy sources that compete with fossil fuels, we can expect continued efforts to terminate clean energy projects, increase costs with tariffs, add permitting restrictions and eliminate funding sources. Meanwhile, costs for clean energy on the world market will continue to decline as the United States looks backward to the good old days of the fossil fuel era. What’s next, a return to the horse and buggy days?
Credit: Sunrun
1. There will be a record number of clean energy company bankruptcies and restructurings in 2026.
Bad news first. The sad thing is that almost all of these companies were founded to save customers money and reduce global warming. We will miss their contributions and hope they still hold onto that clean energy dream.
2. Cities and towns will pass legislation that requires homeowners replace a broken air conditioner condenser with a heat pump unit that can provide both cooling and heating — a process called AC2HP.
Although the fossil fuel industry will aggressively oppose these heat pump requirements, customers will ultimately benefit from cleaner air as well as lower heating and cooling costs — just as we’ve experienced with the transition from incandescent to LED lighting.
3. Utilities will claim that the data center buildout will not cause electric rates to skyrocket.
As Groucho Marx said: “Who you gonna believe, me or your lying eyes?” Nevertheless, the data center buildout will continue, regardless of the impact on ratepayers. As more solar and wind projects are canceled, more power will be generated from polluting and increasingly expensive methane — and even resurrected coal plants.
4. Energy based on moving electrons will get cheaper and cheaper compared to energy based on moving atoms.
When combined with cheap solar, rapid battery pack cost reductions will continue to threaten all other energy sources for grid power over the next five years. Developers of geothermal, nuclear and ostensibly “clean” fossil fuel power will have to reckon with cheap “no moving parts” local energy from mass produced solar and battery systems that can be installed in a matter of months, not years.
5. Battery storage costs will continue to decline rapidly.
Bloomberg NEF observes that battery pack costs are now $108/kWh — and will decline another 3% in 2026. At this level, it is cost-effective to provide battery storage for blackouts extending for one or two days, not just one or two hours.
6. Top tier battery system manufacturers will gain share, as second tier companies drop out of the U.S. market.
Battery system winners will be based on reliability, software and corporate balance sheets — not brochureware.
7. Market share for solar systems with module-level power electronics (MLPE), such as microinverters and optimizers, will decline due to more lenient rapid shutdown requirements in UL 3741.
Customers will be less willing to spring for the extra up-front costs of these components, even though these MLPE systems are more efficient and enable more granular monitoring.
8. The demand for residential solar and battery financing will exceed the supply of quality equipment that meets safe harbor and FEOC requirements.
It would not be a surprise to anyone if new executive order, safe harbor and FEOC restrictions are declared in early 2026, further reducing financeable equipment availability.
9. The hype around plug-in solar, also known as balcony solar, will accelerate as more states propose favorable legislation.
However, it will be at least another year until the necessary UL and NEC safety features are added to these systems. With the combination of new state legislation and manufacturer safety features, the solar gateway drug of plug-in solar will crack the utility interconnection monopoly.
10. Major automakers will offer to sell and install proprietary vehicle-to-grid (V2G) charging systems, but none of these systems will come close to the reliability, functionality and installed-base of the current crop of battery system leaders — including Tesla, FranklinWH and Enphase.
Meanwhile, vehicle-to-home (V2H) systems will become more popular since they can provide customer benefits (cheaper power and blackout protection) without complicated utility integration and non-standard equipment.
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