Utility System Construction NAICS 2371

Mar 17, 2025 - Solar, Battery Storage to Lead 2025 Electricity Generation Growth

• US electricity generation capacity additions in 2025 are expected to be led by solar and battery storage projects, according to the US Energy Information Administration (EIA). The US is projected to add 63 gigawatts (GW) of generating capacity in 2025, led by utility-scale solar with 32.5 GW, followed by battery storage (18.2 GW), wind (7.7 GW), and natural gas (4.4 GW). Additions in Texas (11.6 GW) and California (2.9 GW) will account for nearly half of the solar capacity additions in 2025. Other states that are expected to have significant upticks in solar additions in 2025 include Arizona, Florida, Indiana, Michigan, and New York.
• On March 12, the EPA said it aims to roll back many regulations related to air, water, and waste that affect power plants, according to Utility Dive. However, research firm Capstone suggests that current and future litigation could prevent any changes from going into effect before the next presidential administration. The EPA intends to take interim steps to reduce regulations sooner, including a possible two-year exemption for power facilities impacted by EPA mercury and air toxin standards while the official rulemaking policy plays out. The EPA also hopes to reconsider several other power-related regulations, including ambient air quality standards for soot, a rule that regulates ozone from drifting into other states, regulation of how coal ash is handled, and power plant effluent rules.

• North American construction and engineering spending on power projects in 2025 is expected to grow by 7% after increasing an estimated 10% in 2024, according to FMI’s first-quarter 2025 North American Engineering and Construction Outlook. Demand is being driven by increased electricity consumption from manufacturers, and power-hungry data centers that support AI, cloud computing, and quantum computing. Data centers currently account for about 3% of US electricity consumption but are expected to rise to 5% by 2030. To meet growing demand, power providers are delaying the phasing out of older generation facilities and taking steps to modernize the grid. Tech companies are making investments in microgrids, nuclear, and battery storage power to help meet their data center needs. Construction spending in the power sector is expected to slow to 3% annual growth in 2026 and 2% in 2027 before rising slightly to 3% in 2028.
• Soon after taking office, President Trump signed several executive orders, including a pause on federal permitting for land-based and offshore wind projects, according to The Wall Street Journal. The administration’s moves have created uncertainty for future wind projects, although work is continuing for land- and ocean-based projects already underway. Offshore wind, which requires permitting in US-held waters, faces the most uncertainty. However, while most land-based wind development is on private property, projects may need permits from agencies ranging from the Army Corp of Engineers to the Bureau of Land Management, which creates opportunities for the executive branch to create friction. The offshore wind industry faced significant setbacks before Trump’s election, including inflation, supply chain headaches, and high interest rates.