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Coal And Solar Gain Ground as Natural Gas Slips

Coal And Solar Gain Ground as Natural Gas Slips


By Andi Anderson

Coal and solar energy are both seeing growth in the U.S. power sector, while natural gas—the long-time leader—lost some ground in the first half of 2025.

Newly released Energy Information Administration data shows coal-fired power and utility-scale solar each gained market share, with gas losing 2.7 percentage points.

The shift comes largely from fuel costs. Natural gas prices rose sharply compared to last year, making coal the cheaper option for some utilities. “Plant owners are very sensitive to those price differences in the fuels,” explained Michael Goggin of Grid Strategies. “If it’s a little bit cheaper to run coal as gas prices get higher, then utilities and other power plant operators are going to do that.”

From January to June, U.S. power plants generated 2.1 million gigawatt-hours of electricity, up 2.9% from 2024. Analysts note that this level of growth is significant after decades of little change in overall generation. Rising electricity demand, fueled in part by data centers and other large energy users, has added to the momentum.

 Solar growth was expected due to the many projects recently coming online. Renewables as a whole gained 1.5 percentage points of market share, nearly all from utility-scale solar, while wind and hydropower remained steady.

Despite coal’s short-term boost, experts caution that it is not a long-term trend. “There’s an inexorable long-term trend that gas and renewables are replacing coal generation,” Goggin said. Coal plants in the U.S. remain old and costly to operate, with no new large coal facilities built since 2013.

Brendan Pierpont of Energy Innovation added that coal’s rebound is temporary. “Short-run fluctuations aren’t stopping the long-run decline,” he noted, pointing to rising operating costs of aging coal plants.

Still, regional differences matter. Indiana and Michigan recorded some of the largest gains in coal-fired generation during the first half of 2025. Meanwhile, investors continue to direct new spending toward gas, solar, wind, and battery projects, reflecting the future direction of the U.S. power sector.

Photo Credit: istock-shansekala

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