Utility System Construction NAICS 2371

Jul 18, 2026 - Electricity Infrastructure Construction to Post Steady Growth

• According to FMI's 2026 Energy and Power Overview, US power construction spending is projected to rise from $158 billion in 2025 to $255 billion by 2030, driven by surging electricity demand, aging infrastructure, and stricter grid reliability requirements. Electric transmission and distribution will account for about half of total power construction spending through 2030. Transmission is forecast to grow at a 13% compound annual rate as utilities expand capacity for data centers, industrial electrification, and regional grid projects. Electric power generation is also expected to increase, led by natural gas plants and continued investment in utility-scale solar and battery storage. Grid modernization, resilience upgrades, and replacement of aging equipment is forecast to sustain elevated construction activity throughout the decade.
• A draft US Department of Energy National Transmission Needs Study says expanding interregional transmission and strengthening links between grid operators offer the greatest potential to reduce congestion and improve grid reliability, according to Utility Dive. Congestion added $12 billion to wholesale power costs in 2024, up from $11 billion in 2023, and DOE expects them to continue increasing. The report identified high-value opportunities for new transmission between ERCOT and neighboring grids, the Eastern and Western interconnections, and several regional grid operators. DOE also found the Southeast would benefit significantly from stronger transmission connections with neighboring systems. From 2016 through 2024, about 150 miles of interregional transmission was built annually, incumbent utilities developed 98% of transmission projects, ERCOT added the most transmission mileage, and PJM's eastern region had the highest annual transmission spending.

• A recent report by the Solar Energy Industries Association (SEIA) and Wood Mackenzie said the US added 7.8 gigawatts of solar capacity in the first quarter of 2026, with solar remaining the top source of new power added to the grid. Solar and storage accounted for 91% of new capacity installed in Q1, supported by demand for fast-to-deploy power, energy security, and insulation from fuel price volatility. Utility-scale solar contracts rose 15% year over year, driven in part by tech companies seeking power to meet AI-related electricity demand. However, permitting delays and policy shifts continue to pose challenges, and Wood Mackenzie expects US solar additions to be flat over the next five years.
• Wind and solar developers have safe-harbored a large pipeline of projects ahead of the One Big Beautiful Bill Act's July 4, 2026, deadline to qualify for Inflation Reduction Act tax credits, according to Utility Dive. Tax-credit marketplace operator Crux estimated in February that 170 GW of projects had been safe-harbored, a total that industry experts said has likely grown since then. Projects that miss the deadline will struggle to qualify before an end-of-2027 placed-in-service cutoff, which could push future power purchase agreement prices (PPA) higher as developers seek to offset the loss of tax credits. Camelot Energy Group estimated that a 200-MW solar project without a 30% investment tax credit would require PPA pricing in the mid-to-high $60s per megawatt-hour, about 50% above a tax-advantaged project.