Renewable Energy

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Renewable Energy

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2025
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Renewable Energy

Renewable Energy

California has set ambitious renewable energy and decarbonization goals, including a target to reach carbon neutrality by 2045. Following the passage of Senate Bill (SB) 1020—the Clean Energy, Jobs, and Affordability Act of 2022—in August 2022, which set interim targets of 90% clean electricity by 2035 and 95% by 2040 on the way to carbon neutrality by 2045,⁶⁵ California set its sight beyond the coastline by passing laws that would support its very young offshore wind industry. In September 2023, Assembly Bill (AB) 1373 was signed into law, which authorizes the Department of Water Resources (DWR) to serve as a central procurement entity to procure energy resources in order to help the state meet its renewable and zero-carbon energy resources and reliability goals.⁶⁶ Additionally, the state passed AB 3 in October 2023, to develop a 2nd-phase plan and strategy for seaport readiness for offshore wind energy developments.⁶⁷

In 2024, California increased the share of electricity generation (in-state generation and imports) from renewable sources by 4.4% — the highest increase on record. Renewables accounted for 41.3% of generation in 2024, compared to only 36.9% in 2023. Meanwhile, generation from fossil fuels fell to 36.3% in 2024 — a drop of 2.1% and the lowest on record — compared to 41.1% only a few years ago in 2021. This is a remarkable achievement that speaks to California’s long-time commitment to policies that increase the state’s deployment of renewables while reducing reliance on fossil fuel sources.

At the federal level, California faces a new roadblock in expanding its renewable energy capacity. The federal budget bill H.R.1, passed in July 2025, eliminated the Investment Tax Credit (ITC) for utility-scale wind and solar projects that was created in the Inflation Reduction Act (IRA) of 2022. Projects must begin by July 4, 2026 or enter service by the end of 2027 to qualify for the ITC. Projects that start construction by July 4, 2026 must finish within four years.⁶⁸ Fortunately, a recent report found that 76% of solar projects and 86% of wind projects in the U.S. slated to come online by the end of 2028 will be able to access federal tax credits by starting construction before July 4, 2026. These projects account for about 33 GW of capacity.⁶⁹

As California looks to decarbonize by 2045 and transition toward greater utilization of clean electricity sources, there has been accelerating momentum to electrify buildings, homes, and modes of transportation. At the same time, electricity demand is growing for other uses, such as new data centers that are coming online to power artificial intelligence platforms. As of September 2025, PG&E has 9.6 GW of data center capacity in the queue, including 50 MW in construction, 1.6 GW in the final engineering phase, and 7.95 GW in the preliminary phase.⁷⁰ As California continues to press forward in its commitment to propel the clean energy transition, the state’s power grid will face considerable strain and more renewable energy will need to be deployed faster in order to keep up with surging demand for electricity.

Renewable Electricity Generation and Power Mix

In 2024, The percentage of total power mix (in-state generation plus imports) from renewable sources⁷¹ increased to 41.3%, a 4.4% increase compared to 2023.
California maintains a significant lead in renewables, with an average yearly growth rate of 1.9% from 2008 to 2024, compared to the rest of the U.S. growth rate of 0.9%.
Solar and wind are the largest renewable sources, making up 21.3% and 11.9%, respectively, of the state’s total power mix.
In 2024, generation from solar (in-state generation and imports) rose 23.8% compared to 2023, after falling 2.3% compared to 2022 (a historic first). Generation from wind rose 5.4%. For the first time, solar made up over half (51.6%) of California’s RPS-eligible renewable generation.
Generation for all other RPS-eligible renewables fell in 2024 compared to 2023: Biomass (-396 GWh), geothermal (-764 GWh), and small hydro (-748 GWh).

Installed in-state capacity has been falling gradually for biomass (1,278 MW in 2024, down from 1,313 MW in 2014) and small hydro (1,726 MW in 2024, down from 1,758 MW in 2014) and has been stagnant for geothermal (2,715 MW in 2024 versus 2,703 MW in 2014).
In 2024, imports supplied 25.4% of California’s RPS-eligible renewable energy, with 9.4% from the Northwest and 16.0% from the Southwest.
After rising sharply from 30.0% in 2022 to 67.2% in 2023, the share of Northwest imports that are from RPS-eligible renewables maintained an elevated level in 2024 (68.5%). The share of Southwest imports from the same sources increased from 33.8% in 2023 to 39.7% in 2024.
For the first time, electricity generation from RPS-eligible renewable sources and large hydroelectric accounted for over half (52.3%) of the power mix in 2024, an increase of 3.7% from 2023. Meanwhile, generation from fossil fuels fell to 36.3% in 2024, the lowest on record.
From 2015 to 2024, California added 34.0 gigawatts (GW) of utility-scale capacity into its grid, mostly from solar (20.7 GW). During the same period, the state retired 12.0 GW of utility-scale power plants, mostly from natural gas (10.3 GW).

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Renewable Portfolio Standards (RPS) and Community Choice Aggregators (CCAs)

Renewable or clean energy mandates are in effect in twenty-eight states, Washington, D.C., and two territories. Three of these states (Hawaii, Rhode Island, and Vermont) plus Washington, D.C. have a 100% RPS goal. California is one of the 16 states with RPS targets of at least 50% of retail electricity sales.
Electricity generated from RPS-eligible sources in the total power mix reached 41.3% in 2024, missing the interim SB 100 goal of procuring 44% of retail electricity sales from RPS-eligible renewable sources by the end of 2024.
However, this represents a 4.4% increase from 2023, and if California can keep this pace, it could meet the 2026 goal of 50% of generation from RPS-eligible renewable sources.

In 2024, total estimated annual load in Community Choice Aggregations in California increased by 4.4% from 2023 to 2024, totaling 65,809 gigawatt-hours (GWh) in 2024.
Although all CCAs are on track to meet the overall RPS requirements (44%) for the 2021-2024 compliance period in 2024, the CCAs’ aggregated RPS percentage is expected to drop slightly from 59% in 2023 to 57% in 2024.

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Renewables Interconnections, Installations, and Curtailments

After a stellar year of growth in 2023, 2024 was a relatively muted year of interconnected distributed capacity of solar within the three investor-owned utilities service territories, totaling just 1,600 MW (in alternating current) in 2024, down 29.9% from 2023.
Residential continues to be the largest sector, accounting for 62.1% of the interconnected distributed generation installed (933 MW) in 2024, but it is a 46.8% decline relative to 2023’s 1,865 MW. On the other hand, installations rose 68.0% or 197 MW in the commercial sector.
In California, small-scale solar PV net generation totaled 31,723 GWh in 2024, up 3,621 GWh or 12.9% from 2023. California accounted for 37.5% of all small-scale solar PV net generation nationwide.
By sector, California accounted for 29.0% of all small-scale solar PV net generation nationwide in the commercial sector, 38.2% in the residential sector, and 69.4% in the industrial sector.

Small-scale solar PV net generation is more than half of California’s utility-scale solar PV total generation (59,283 GWh). However, small-scale solar PV generation grew slightly slower, percentage wise, in California (+12.9%) than the rest of the U.S. (+16.2%) from 2023 to 2024.
California added 116 MW of wind capacity in 2024, and cumulative installed wind capacity totaled 6,329 megawatts (MW) in California, a 1.9% increase from 2023 (6,213 MW).
In the first five months of 2025, curtailment totaled 2,742 GWh electricity generated (220 GWh from wind and 2,521 GWh from solar), which has slightly surpassed the total curtailment of 2,595 GWh in the first five months of 2024 (+5.6%).
California curtailed 220 GWh from wind and 2,521 GWh from solar during the first five months of 2025. Wind and solar curtailments rose 26.3% and 4.2%, respectively, relative to the first five months of 2024.

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Energy Storage and Capacity

In 2024, California added 5,743 MW of energy storage, an increase of 69.2% compared to 2023’s addition of 3,394 MW.
4,881 MW of that came from the utility-scale sector, with the remaining 789 MW from the residential sector and 73.5 MW from the commercial sector.
California had already surpassed storage additions in all of 2024 in the first three months of 2025, adding 7,272 MW to the grid.
As of April 3, 2025, California has added 23.2 GW of energy storage cumulatively, with over half of the capacity (12.2 GW) added after 2023.
In 2024, California added 3,774 MW of nameplate capacity energy storage while the rest of the U.S. added 7,355 MW. Compared to 2023, energy storage capacity addition grew 28% in California and 88% in the rest of the U.S.
Most of the energy storage systems that came online in 2024 are composed of lithium-ion (Li-ion) batteries, which have a longer average duration in California (3.6 hours) than the rest of the U.S. (2.3 hours).

Systems with a duration of four hours were the most common in California, accounting for 77.1% (2,911 MW) of the state’s capacity addition in 2024, compared to 30.0% (2,209 MW) of the rest of the U.S.
As of the end of 2024, California has 8,551 MW of proposed energy storage capacity in the pipeline for 2025 to 2027, which is more than the cumulative capacity added from 2013 to 2023 (7,913 MW).
The prevalence of lithium-ion battery projects across the state expanded considerably in 2023, with 29 counties in California hosting these installations within their respective territories.
CAISO interconnected queue moderated significantly from 283 GW in 2023 to 158 GW in 2024 as a result of not opening a cluster window, which is how a project can enter the active queue.
Energy storage projects (standalone or hybrid) accounted for most of them, totaling 135 GW.
Due to the increased popularity of pairing solar PV projects with battery storage, these projects made up 73 GW of the interconnection queue.

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Footnotes

⁶⁵ SB-1020 Clean Energy, Jobs, and Affordability Act of 2022. Available at: https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220SB1020

⁶⁶ AB-1373 Energy. Available at: https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202320240AB1373

⁶⁷ AB-3 Offshore Wind Energy: Reports. Available at: https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240AB3

⁶⁸ “Effects of HR1 on commercial, utility US solar markets.” Solar Power World. July 18, 2025. Available at: https://www.solarpowerworldonline.com/2025/07/effects-of-hr1-on-commercial-utility-us-solar-markets/

⁶⁹ “Report: Most solar and wind projects are safe harbored.” Latitude Media. November 13, 2025. Available at: https://www.latitudemedia.com/news/report-most-solar-and-wind-projects-are-safe-harbored/

⁷⁰ PG&E 2025 Third Quarter Earnings. Available at: https://s1.q4cdn.com/880135780/files/doc_financials/2025/q3/Q3-25-Earnings-Presentation.pdf

⁷¹ Renewable Portfolio Standard eligible sources include biomass, geothermal, solar, wind, and small hydroelectric facilities. Small hydroelectric projects are hydroelectric projects that are less than 30 MW of generation capacity.