Experts warn administrative attacks on new energy projects could soon spike electricity prices: 'I don't think everybody realizes how big the crunch is going to be'

Renewable-energy executives have warned that unprecedented moves by the federal government could grind new cleaner-energy projects to a halt just as the U.S. struggles to meet growing electricity demand, CNBC reported.

"I don't think everybody realizes how big the crunch is going to be," Kevin Smith, CEO of solar and battery developer Arevon, told CNBC. "We're making that crunch more and more difficult with these policy changes."

What's happening?

After years of electricity demand in the U.S. remaining relatively flat due to gains in energy efficiency, demand for power has begun to increase sharply, according to the U.S. Energy Information Agency. 

Electricity-hungry data centers, particularly those behind energy-intensive AI models, have been the major drivers of increased demand. 

A 2024 report released by the Department of Energy found that data centers accounted for 4.4% of all U.S. electricity consumption in 2023. That figure was expected to grow to between 6.7% and 12% by 2028. 

At the time of the report's publication, experts expressed confidence that these growing energy needs could be met using cleaner, renewable sources of electricity. 

"The United States has seen an incredible investment in artificial intelligence and other breakthrough technologies over the last decade and a half, and this industrial renaissance has created greater demand on our domestic energy supply," Jennifer Granholm, who was Secretary of Energy at the time, said in 2024, per the DOE. 

"We can meet this growth with clean energy," Granholm continued.

However, with the federal government announcing a new, more stringent review process for renewable-energy projects, industry experts have begun to question whether the U.S. will be able to increase electricity production fast enough to meet rising demand, according to CNBC. 

Why does the energy crunch matter?

If electricity demand outpaces the growth in supply, it means higher prices for everyone, from factory owners to consumers. The result could be significantly slower economic growth overall. 

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Renewable-energy projects are important because they typically can be brought online much more quickly than power plants using coal or natural gas. 

For example, a massive new solar and battery-storage array that helps to power the City of Los Angeles took just two years from the time shovels hit the ground until the project was brought into service. 

By comparison, the world currently is experiencing a severe backlog of the turbines used in natural-gas-powered facilities, leading to wait times as long as seven years, according to S&P Global. 

Additionally, cleaner, renewable-energy power plants are responsible for far less heat-trapping, health-harming pollution overall than their nonrenewable counterparts, which are powered by dirtier, extracted fuels like coal and natural gas. 

What's being done about the energy crunch?

Unless the federal government begins embracing renewable sources of energy, the U.S. might not be able to meet rising demand for electricity. 

To encourage political change, you can use your voice, contact your elected representatives, and vote for pro-environment candidates. 

Further, regardless of the policies coming out of Washington, D.C., you can make a difference by driving an EV and installing solar panels on your home. Home solar can reduce your electricity bill to practically zero while also lowering planet-heating pollution. 

With federal tax incentives for home solar ending Dec. 31 and credits for EVs ending on Sept. 30, it's important to act soon if you want to take advantage. Solar can take up to three months to complete on time, but if you're interested in getting quotes before it's too late, EnergySage has a comparison shopping tool for local solar installers that's a great way to find one that still has installation slots available. 

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