With the surge in electricity demand in the United States, solar energy is expected to flourish and its growth rate may surpass other sources of electricity.
According to data from the US Energy Information Agency (EIA), in 2023, solar energy accounted for only 3.9% of the total electricity generation in the United States, while natural gas accounted for as much as 43%. But leaders in the clean energy industry believe that the industry is at a turning point, especially in an environment where tech giants such as Microsoft and Amazon are seeking clean energy to power their data centers.
The data center is the pillar of Internet and AI applications. Industry leaders believe that with the decline in the price of solar panels and batteries, the economic benefits of renewable energy have been strengthened. "They have become cheaper, cleaner, and easier to install, so the future will be renewable energy," said Andr é s Gluski, CEO of American independent power provider AES
UBS's research report in May showed that in the past five years, Amazon, Microsoft, Meta, and Google alone accounted for 40% of the demand for large-scale utility solar projects in the United States. UBS stated that artificial intelligence requires 10 times more electricity than Google Search, and these tech giants are all pursuing 100% clean energy.
According to estimates from the US Department of Energy, solar energy is expected to account for 58% of the country's new electricity generation by 2024, with a record increase of 36.4 gigawatts in installed capacity, almost twice the increase from last year. Battery storage is also expected to more than double, reaching 14.3 gigawatts.
Source: EIA
Joseph Rand, an energy policy researcher at Lawrence Berkeley National Laboratory (LBNL), said, "We are seeing a surge in demand for clean energy. The economy of wind and solar energy has become so competitive that it is the cheapest form of power generation in many parts of the United States."
By contrast, natural gas may only increase by 2.5 gigawatts this year, accounting for only 4% of the planned total electricity addition of 62.8 gigawatts, the lowest figure in 25 years. But natural gas producers believe that they are more capable of meeting the surging demand, especially in data centers, than renewable energy.
The natural gas industry has stated that natural gas has low prices, abundant reserves, can be quickly deployed, and most importantly, is reliable. Although it is a fossil fuel, it also plays a role in energy transformation, replacing more polluting coal-fired power plants.
Richard Kinder, Executive Chairman of American natural gas pipeline operator Kinder Morgan, once said, "I believe tech giants will recognize the role that natural gas and nuclear energy must play." Kinder said, "They know that the wind won't keep blowing, and the sun won't keep shining. Using batteries to make up for energy shortages is not feasible in practice and economy."
In response, Dan Shugar, CEO of American photovoltaic leader Nextracker, said, "The main energy source for data centers will be renewable energy because technology companies have very strict sustainable development goals and they do not want electricity to come from fossil fuels."
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