U.S. Electricity Demand Surges After Years Of Stagnation, Driven By Commercial And Industrial Growth – EIA

Electricity consumption in the United States is growing again after remaining mostly unchanged for over a decade. According to the latest Short-Term Energy Outlook, electricity use is expected to rise further in 2025 and 2026, surpassing the previous record high set in 2024. This marks a clear shift from the earlier trend of nearly flat electricity demand that lasted from the mid-2000s to the early 2020s.

In the past, any increase in electricity use due to population and economic growth was mostly balanced by gains in energy efficiency and changes in the economy. As industries moved from manufacturing to service-based activities that use less energy, overall demand remained stable. Total electricity consumption includes electricity sold to residential, commercial, and industrial users, along with smaller amounts used for public transportation and direct use at industrial sites that produce their power.

However, this trend has changed since 2020, which was a low point in electricity consumption. From 2020 through 2026, the forecast shows average growth in electricity consumption at 1.7% per year. Within this, the commercial and industrial sectors are expected to see the fastest growth. Electricity demand in the commercial sector, which includes data centers, is forecasted to grow by 2.6% per year, while the industrial sector, including factories and other facilities, is expected to grow by 2.1% per year. Residential sector electricity sales are also expected to rise, but at a slower pace of 0.7% per year. These changes reflect both rising energy needs and ongoing temperature-related changes that affect residential electricity use.

The growing demand is leading to an increase in electricity generation and storage capacity. A large share of this new capacity comes from solar power and battery storage installations. These developments are mainly taking place in regions like Texas, California, the upper Midwest, and the Northeast.

In response to the rising demand, utilities, grid operators, and regulators are also focusing on energy efficiency and demand response programs. These efforts are backed by data from the Federal Energy Regulatory Commission. Additionally, expansion of high-voltage transmission lines is underway to help maintain grid balance and ensure the reliable delivery of electricity.