Then in 2025, the energy world just flipped on its head. Renewable energy sources continued their upward trend as they captured almost 50 percent of the net capacity additions. We know this milestone signifies a tremendous accomplishment. As we’ve highlighted this week, renewables have for the first time ever overtaken coal in power generation—a groundbreaking change that signals a new era in global energy. With policy and demand finally aligned, solar power truly led the charge in new capacity additions. It represented 64.1% of total, continuing a robust 5% increase over last year.
The year was not without its challenges, particularly for offshore wind, which struggled against unfavorable U.S. policy signals and tariff pressures. Even amidst these challenges, coal proved to be remarkably resilient and continued to be the largest, by far, source of electricity generation in the world. Gas power plants quickly became the quickest and easiest option for developers looking for a quick buck while filling an immediate need for capacity. North America’s energy sector continued to prosper with a staggering 1,659 deals. These transactions came in at $780.5 billion, an extraordinary 31.61% increase over last year.
The optimism surrounding renewable energy quickly hit one hurdle after another. Such delays and policy uncertainties reduced the expected cumulative capacity for 2030 by over 10% compared to last year. A whopping $557.3 billion flowed into transmission and distribution (T&D) infrastructure. This investment only underscores the critical need for and importance of grid modernization.
The Rise of Solar Power
Solar power became the overwhelming lead story in 2025’s energy growth narrative. With new solar capacity additions spurring on the overall expansion, the sector showed incredible strength and flexibility. GlobalData anticipates that global solar capacity will approach nearly 3 terawatts (TW) by the end of 2025, underscoring the ongoing commitment to solar technology.
“Despite tariffs, supply chain tensions and geopolitical headwinds in 2025, renewables kept expanding because their underlying economics and policy support are now deeply entrenched,” – Pavan Vyakaranam.
Renewable energy generation is expected to be dominated by solar photovoltaic (PV) systems and onshore wind technologies. By 2033, they will surpass all thermal generation combined, including coal, gas and oil. This transition is part of the larger national movement towards cleaner, safer, and more economically viable energy sources, propelled by economic realities and favorable regulatory environments.
Offshore wind took some major blows in 2025. The sector just went through one of its biggest down years for net capacity additions. Projections predict a decrease of 28% in the high-case scenarios and 26% in the low-case scenarios by 2035. These challenges further illustrate the current volatility and high risk with renewable energy investments.
Employment Trends in the Power Sector
The 2025 shock to the power sector saw a large increase in employment above baseline and growth stopped altogether. In the fourth quarter last year and first quarter this year, jobs exploded to record highs, lifted by undeniable economic momentum from late 2024. Companies accelerated hiring in anticipation of tighter clean energy tax credit rules under the Inflation Reduction Act (IRA) and rising demand from sectors such as data centers and construction.
“Jobs surged in Q1, benefitting from strong late-2024 economic momentum, as companies accelerated hiring ahead of tighter clean energy tax credit rules under the IRA,” – Pavan Vyakaranam.
This momentum did not last. That’s because in the second quarter, hiring plummeted. This drop all happened as new costly ‘Foreign Entity of Concern’ requirements cascaded down the supply chain and slowed projects down. Early, atypical monsoon weather in other big markets such as India complicated construction and weighed on power demand.
As employment began to decline throughout the third and fourth quarters, experts noted that companies were refocusing on adapting to the new regulatory environment. Instead, the focus was on making things more efficient and faster through digitalization, rather than expanding greatly on a new massive scale.
“But in Q2, hiring fell abruptly as new ‘Foreign Entity of Concern’ requirements disrupted supply chains,” – Pavan Vyakaranam.
Financial Landscape and Future Projections
North America was the center of the deal-making universe in 2025. It logged a staggering 1,659 transactions comprising $780.5 billion. The rush was largely fueled by a wave of mega mergers and acquisitions. The biggest surprise event was Essential Utilities’ transformative, all-stock $30 billion merger with American Water Works.
“This data reflects North America’s multiple mega-deals in 2025,” – Pavan Vyakaranam.
Analysts expect that wave of deal activity to peak in 2026. This growth will be powered by simultaneous and accelerating expansions in renewable energy and storage technologies. This is where digital infrastructure is becoming a major player. First, more companies are prioritizing the improvement of supply chain resilience and grid reliability.
Dangers are still apparent as policy uncertainties cast a shadow on future outlooks. Through these delays and through a process of downsizing, cumulative capacity forecasts for 2030 have decreased by approximately 10% each year. The continued predominance of coal in many power systems either shows how far it has dug its heels in worldwide, or its entrenched nature.
“Coal remains the single largest source of electricity, showcasing how deep-rooted coal is in many power systems across the world,” – Harminder Singh.