Text settings Story text Size Small Standard Large Width * Standard Wide Links Standard Orange * Subscribers only Learn more Minimize to nav On Monday, the Energy Information Agency released its analysis of the energy trends of 2025, covering the entire globe. It confirms and extends the primary conclusion of a more limited analysis by the International Renewable Energy Agency: 2025 was the first year of solar’s dominance. Increased solar production was a key reason the growth of carbon-free energy sources outpaced rising demand.
Coupled with a massive growth in battery storage and relatively stagnant fossil fuel use, the year has led the EIA to declare that “the world has entered the Age of Electricity.”
The EIA report covers energy use, including the electrical grid, transportation, home heating, and other forms of consumption. As such, it can track how some of those uses are shifting, as electric vehicles displace some gasoline use and heat pumps replace gas and oil heating. It also saw a more global trend: the demand for electricity grew at twice the rate of overall energy demand. All of these went into the conclusion that we’re starting the Age of Electricity.
In terms of specifics, the EIA saw electric vehicle demand rise by nearly 40 percent, with electric car sales being a quarter of the total of cars sold last year. While that’s having a measurable effect on electricity demand, it remains relatively small at the moment. It’s almost certain to be contributing to the size of the rise in oil use last year: 0.7 percent. In absolute terms, that’s less than half the average rise of the previous decade.
Heat pump sales were largely flat last year, but in a number of countries, past growth has meant that heat pumps now account for a majority of new heating units sold. But relatively cold weather in populated regions of the world made the building sector the primary driver of demand for natural gas. Even so, its use rose only 1 percent in 2025 compared to 2024.
Trends like these are likely to accelerate in 2026 due to the conflicts in the Middle East. The closing of the Straight of Hormuz will severely affect the flow of oil globally, and a number of countries are dependent on liquefied natural gas from Persian Gulf states. Even if non-fossil alternatives were unavailable, we’d see lower consumption due to a combination of reduced availability and higher prices. Instead, we’re more likely to see an accelerated shift away from fossil fuels due to increased interest in electrified alternatives and government efforts to limit the impact of future fuel shocks.
When it comes to supplying electrons for those alternatives, the central story is solar power. “The absolute increase of solar PV generation in 2025 is the largest ever observed for any source,” the EIA says, “excluding years marked by rebounds from global economic shocks such as COVID-19.” In other words, with nothing in particular driving the energy markets in 2025, Solar’s growth was unprecedented. On its own, its growth covered a quarter of the rising demand for all forms of energy. If you limit it to electricity, increased solar production covered over two-thirds of the increased demand.
Overall, solar generated over 2,700 terawatt-hours last year, more than double its output from three years earlier. It now accounts for over 8 percent of the world’s total electricity production. Thirty individual countries installed at least a gigawatt of solar last year, and it is now the single largest grid source by capacity (though other sources still outproduce it at the moment).
The solar boom is the primary reason that carbon-free generating sources—hydro, nuclear, solar, wind, and other renewables—were able to grow faster than demand in 2025. In other words, as electrification increases, we’re at the point where we are capable of meeting the additional demand without boosting carbon emissions. These sources covered nearly 60 percent of the overall growth in demand for energy of all types.
Solar’s growth is being accompanied by a key enabling technology: batteries. Batteries were the fastest-growing power technology, with capacity additions rising 40 percent between 2024 and 2025, reaching 110 GW of new capacity last year. That is apparently more than the highest one-year addition of natural gas capacity, and leaves our total installed capacity at over 10 times what it was just five years ago. Batteries, when combined with cheap solar, can limit the need for fossil fuel-powered backups.
As noted above, natural gas use increased (by about 1 percent), but that was primarily driven by weather-driven heating demand. Coal was largely flat, with use rising by just 0.4 percent. While the US saw a small increase in coal use, coal use in the EU dropped below 10 percent of electricity production last year for the first time since statistics were kept. While China commissioned a lot of coal plants in 2025, those were largely started during a prior energy shock. China actually saw its coal use for electricity drop last year due to its massive investment in renewables (China was responsible for 60 percent of renewable global growth last year).
Last year, nuclear remained stable, with about 3 GW of newly commissioned plants offsetting the retirement of 3 GW elsewhere. China is the major player here, too, with enough plants under construction that it will eventually surpass the US in installed nuclear capacity if all of them are commissioned. Twelve GW of new plants started construction last year, with nine of the 10 total plants being located in China.
In keeping with all of the trends above, energy-related carbon emissions grew last year, but only by about 0.4 percent. While that’s still enough to create a record high, it is well below some of the growth of the past and represents the third straight year that the growth of emissions has slowed. One potentially critical aspect of this is that China’s emissions actually declined in 2025, which the IEA ascribes to a mixture of industrial changes and the explosive expansion of renewable energy.
2025 saw relatively low growth in carbon emissions compared to most other years, with many of the exceptions representing period of economic turmoil. EIA All the green tech we’ve installed over the last six years have cut significantly into the rise in emissions we’d have expected without their deployment. EIA All the green tech we’ve installed over the last six years have cut significantly into the rise in emissions we’d have expected without their deployment. EIA 2025 saw relatively low growth in carbon emissions compared to most other years, with many of the exceptions representing period of economic turmoil. EIA All the green tech we’ve installed over the last six years have cut significantly into the rise in emissions we’d have expected without their deployment. EIA The EIA also estimates that the green tech we’ve installed since 2019—renewables, EVs, heat pumps, etc.—along with nuclear power, has displaced about 7 percent of total fossil fuel use in 2025 and reduced carbon emissions by 8 percent compared to where they might be. In terms of coal use alone, it estimates that these systems have displaced the equivalent of India’s 2025 coal use.
And, as noted above, it is difficult to imagine a scenario where the supply interruptions caused by the closure of the Strait of Hormuz don’t interfere with global fossil fuel use in 2026. But the world has seen shocks cause one-time drops in emissions in the past. The key question now is whether this event will accelerate many countries’ efforts to move away from fossil fuels.
