Electricity generation in the U.S. is on a trajectory of growth, with the potential to reshape the landscape for small businesses over the next few years. According to the U.S. Energy Information Administration (EIA), total electricity generation for 2025 reached a notable 4,260 billion kilowatt-hours (BkWh). As we move into 2026 and 2027, projections indicate a growth rate of 1.1% in 2026, climbing to 2.6% by 2027, hoping to reach approximately 4,423 BkWh. This increase brings both opportunities and challenges for small business owners who are navigating an evolving energy market.
A significant shift is occurring in the sources of electricity generation. While traditional sources like natural gas, coal, and nuclear combined accounted for 75% of total generation in 2025, that figure is expected to decline to 72% by 2027. The rise of solar and wind energy, which is anticipated to grow from 18% in 2025 to about 21% by 2027, represents not just an environmental paradigm shift but also presents practical implications for small business energy strategies.
For small business owners, this transition offers crucial benefits. The EIA highlights that utility-scale solar is the fastest-growing source of electricity in the nation. With almost 70 gigawatts of new solar capacity slated to come online between 2026 and 2027—a whopping 49% increase compared to the end of 2025—businesses should consider integrating solar power into their operational models. This move could not only lower energy expenses but also resonate with consumers who are increasingly prioritizing sustainability.
The state of Texas is emerging as a hotbed for solar energy generation. Projections estimate that solar production will surge in the Electric Reliability Council of Texas (ERCOT) from 56 BkWh in 2025 to 106 BkWh by 2027. The expansion of battery storage to support these solar installations is also noteworthy, expected to grow from about 15 gigawatts (GW) in 2025 to 37 GW by the end of 2027. This increase addresses one major concern for businesses that require consistent power supply despite variations in solar generation.
Texas is not the only region undergoing change. The Midcontinent Independent System Operator (MISO) traditionally reliant on wind power is also beginning to see solar projects come online, with MISO solar generation projected to increase from 31 BkWh in 2025 to 46 BkWh by 2027. For small businesses in these areas, diversifying energy sources may not only lead to potential savings but also enhance energy reliability.
However, while electric power options expand, small business owners should remain aware of the changing dynamics. Natural gas remains the largest electricity source in the U.S., but its share is decreasing. The forecast suggests a stagnation at 1,696 BkWh by 2026, only slightly increasing to 1,711 BkWh in 2027. This slower than average increase may be partially countered by rising electricity demand, particularly from data centers.
Coal generation saw a temporary rise in 2025, but the long-term outlook is concerning. With existing policies and retiring plants, EIA predicts a decline in coal-generated power by around 5% annually over the next two years, further shrinking its contribution to around 15% by 2027 from the current 17%. Business owners in coal-dependent regions may need to strategize swiftly about their energy sourcing in anticipation of these shifts.
For businesses considering moving toward renewable sources, financial incentives, such as tax credits for solar installations, could significantly alleviate the upfront costs. However, transitioning comes with its own set of challenges, including the need for new infrastructure and understanding the nuances of renewable energy contracts.
Small business owners in all sectors should stay informed about these energy trends, as the implications stretch far beyond simple cost savings; they tap into consumer desires for more sustainable practices and may even influence local economic conditions as energy markets continue to evolve.
As the landscape of U.S. electricity generation transforms, businesses that adapt will not only stay ahead of the curve but may also find themselves leading the charge in the shift toward a more sustainable energy future.
For more in-depth insights, you can refer to the original release from the EIA here.
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