The US energy system continues to transform with increasing investment in a broad mix of sources. And while the investment diversity provides encouraging news, some concerns about meeting long-term demand growth and the viability of specific segments are emerging.

So says the Sustainable Energy in America Factbook, the annual review of energy markets co-produced by BloombergNEF and the Business Council for Sustainable Energy (BCSE). Overall, the investment message is very strong, with renewable energy growing fastest among energy sources, while the emissions picture was less optimistic as levels ticked up 0.5% in 2024 compared to 2023.

“The mantra has shifted to more energy now,” says Lisa Jacobson, BCSE president, “from a more diverse mix of sources.” The power sector has been fastest growing, led by increasing demand from industry and transportation sectors. Data center demand gets the most media attention these days but the electrification of oil & gas production as well onshoring of US manufacturing have also been major demand contributors.

Overall, the factbook offers a mixed picture from an emissions perspective. Energy productivity continues to improve, with energy consumption rising only 0.5% as the US economy expanded at 2.8%. This combination led to a 2% rise in energy productivity, the highest recorded to date for the US economy. But emissions also rose in 2024, and the US emission trend is well off the target needed to meet previous climate commitments.

When considering emissions targets and the impact across sectors, the outlook is mixed. Some positive trends are emerging while others offer cautionary messages.

On the side of positive trends:

• Coal continued to decline as fuel for electricity generation being replaced by renewables. Since 2012, the portion of electricity generated from coal dropped from nearly 40% to only 15% in 2024.
• Renewables continue to expand in the power sector, growing 10.2% year on year to 24% of total, including the contribution from wind, solar, biomass, waste-to-energy, geothermal and hydropower.
• US accounted for the largest share (43%) of digitalization activities in the power sector globally, led by grid control technologies, analytics software, and sensors and edge control hardware.

A few areas of concern also emerged from the factbook:

• The pace of new cleantech investment has slowed, with only 60 new announcements in 2024, compared to a total of 264 since the passage of the Inflation Reduction Act (IRA) in August 2022. Projects for electric vehicles, solar and battery lead this list.
• Wind project development slowed in 2024 due to permitting and grid constraints and remains under pressure from the new administration. Several states have aggressive targets for wind deployment over the next few years and most are well behind planned timelines.
• Hydrogen project announcements continued to grow but delays on tax rules clouded the economics of new projects, and market demand remained uncertain. The suspension of funding for federal clean energy funding since January 2025 has paused most activity in this segment.

This historical snapshot of energy development must now be considered within the context of the new administration, which is targeting a different prioritization of energy investment. The funding freeze of IRA and Infrastructure Investment and Jobs Act, as well as the reduction in workforce across the Energy, Commerce and related departments are slowing project development and funding activities.

Energy diversity is a tool for long-term competitiveness and this retrenchment away from broadening the energy mix could be a risky approach. Already the US is behind China in clean energy investment, with the US investing 1.2% of 2024 GDP compared to 4.4% of GDP in China. And this investment shift comes as the impacts of climate change are increasing across all regions. In the most recent climate survey by Yale, 66% of Americans think global warming is affecting US weather with one in three saying it is “affecting weather a lot”.

As US representatives begin to step back from global discussions on the environment, the funding and science gap will continue to grow. And if the local loss of policy support persists, it will have a long-term impact.

“2024 saw transformation and diversification of the energy system, and it has a lot of momentum,” said Tom Rowlands-Rees, Head of North America Research for BloombergNEF. “Past policies brought this about, and future policies need to play their role, too.”