Solar power is expected to remain the main driver of capacity expansion in the US electricity sector over the next two years. According to the latest Short-Term Energy Outlook (STEO) released by the US Energy Information Administration (EIA), installed solar capacity will rise from 183 GW in 2026 to 223 GW in 2027, representing a 21.9% increase in a single year.

The forecast confirms solar's leading role in the country's energy transition, outpacing wind power growth. The EIA expects installed wind capacity to increase from 170 GW in 2026 to 178 GW in 2027, equivalent to a 4.7% annual increase.

Compared with 2025, US solar capacity is projected to expand from 151 GW to 223 GW by 2027, a cumulative increase of 47.7%, while wind capacity will grow from 158 GW to 178 GW, up 12.7% over the same period.

Source: IEA

Electricity generation continues to rise

The EIA also expects US electricity generation to continue increasing over the forecast period.

Total electricity generation is projected to rise from 4,430 billion kilowatt-hours (kWh) in 2025 to 4,502 billion kWh in 2026, reaching 4,636 billion kWh in 2027, reflecting continued growth in electricity demand.

Meanwhile, coal is expected to continue its decline. Coal production is forecast to decrease from 528 million short tons in 2025 to 511 million in 2026 and 492 million in 2027, while coal consumption is projected to fall from 452 million to 399 million short tons over the same period.

Lower wholesale electricity prices this summer

The Short-Term Energy Outlook also projects lower wholesale electricity prices during the summer of 2026, driven primarily by lower natural gas prices delivered to power plants and increasing renewable electricity generation.

The EIA forecasts an average US wholesale electricity price of $45/MWh between June and September, approximately $4/MWh lower than last summer.

The sharpest declines are expected in the western United States, where stronger hydropower and solar generation will help reduce electricity prices. Wholesale prices are forecast to average $23/MWh in California, down 30% year over year, and $28/MWh in the Southwest, a 27% decline. In the Midcontinent Independent System Operator (MISO) region, wholesale prices are expected to fall 18%, supported by higher generation from solar, wind, natural gas and nuclear power.

The EIA's outlook suggests that rapid solar deployment, continued wind expansion and lower wholesale electricity prices will further strengthen the role of renewable energy in the US power system through 2027.