The renewable energy sector is poised for a historic milestone in 2026, with clean energy sources positioned to become the world’s dominant electricity generation method. Renewables will overtake coal as the leading global power source by 2026 at the latest, according to projections from the International Energy Agency (IEA). By this year, renewables are expected to account for approximately 36% of global power supplies, compared to just 32% from coal—marking coal’s lowest share in a century. This represents a fundamental shift in global energy infrastructure that reflects decades of technological innovation and policy support.
The IEA projects that wind and solar output will surpass 6,000 terawatt hours (TWh) by 2026, up from over 4,000 TWh in 2024. In the United States specifically, renewable energy is on track to supply approximately 1.2 billion MWh in 2026, representing roughly 27% of all US electricity generation. This upward revision reflects the accelerating deployment of utility-scale solar and wind capacity across the nation.
Solar Energy’s Explosive Growth
Solar energy continues its remarkable ascent as the primary driver of global renewable capacity expansion. The US is expected to add approximately 32,500 MW of utility-scale solar in 2025, surpassing the previous record of 30,000 MW achieved in 2024, with similarly robust growth anticipated through 2026. Globally, solar photovoltaic (PV) energy is projected to grow at a compound annual growth rate (CAGR) of 11.7% from 2021 to 2026, significantly outpacing wind energy’s 9.4% CAGR over the same period.
Regional variations demonstrate solar’s versatility across different climates and economies. In the ERCOT region (covering much of Texas), solar represents the fastest-growing energy source, with forecasts showing 92% growth between 2024 and 2026. In the PJM region spanning multiple eastern states, solar generation is predicted to increase by 63% through 2026. Latin America has emerged as a global benchmark for solar deployment, with Chile’s Atacama Desert and other regions benefiting from exceptional solar resources. The region is increasingly adopting solar-plus-storage configurations, which pair photovoltaic panels with co-located batteries to address intermittency challenges and provide greater grid stability.
Wind Energy Acceleration and Offshore Expansion
Wind energy, while growing more slowly than solar, remains a crucial pillar of the renewable energy transition. The global wind power market is projected to expand at an annual growth rate of 10.93%, reflecting the sector’s critical role in energy diversification. In the United States, the EIA anticipates approximately 7,700 MW of new wind capacity additions in 2026. Globally, wind farms are on track to provide about 506 million MWh in 2026, representing roughly 2% growth from previous outlooks.
Offshore wind is emerging as the fastest-growing renewable technology, with technological breakthroughs enabling expansion into previously economically unfeasible locations. The offshore wind market is forecast to surpass US$94 billion by 2028, driven by advancements in turbine design, floating platform technology, and deep-sea installation methods. Floating wind platforms—using spar-buoy, semi-submersible, and tension-leg designs—are unlocking deep-water sites previously considered uneconomical and will enable deployment across a far broader geographic range.
Latin America represents a particularly promising market for offshore wind development. The region could more than double its onshore wind capacity by 2035, surpassing 120 GW, while simultaneously installing its first gigawatts of offshore wind capacity within the same decade. Countries like Brazil and Colombia are moving rapidly, with Brazil developing comprehensive offshore wind regulatory frameworks and Colombia having held its first offshore wind auction in 2024.
Energy Storage Transformation
Energy storage technology is becoming increasingly critical to renewable energy integration, as battery costs continue declining and performance improves. The United States is projected to install almost 15 GW of new battery energy storage system (BESS) capacity in 2026, with Germany and Australia following with 5 GW and 3 GW respectively, and the UK with 3 GW. This substantial investment reflects recognition that storage solutions are essential for managing variable renewable generation.
Next-generation battery technologies are advancing rapidly beyond conventional lithium-ion chemistry. Solid-state batteries promise higher energy density and superior safety profiles by replacing liquid electrolytes with solid materials. Sodium-ion batteries present a compelling alternative, offering lower costs due to sodium’s abundance while reducing dependence on scarce lithium and cobalt resources. Emerging solutions include iron-air batteries, sand batteries, and gravity-based systems, all targeted toward long-duration storage applications that can provide energy over hours or even days.
Advanced Battery Management Systems (BMS) employing smarter algorithms are optimizing charging and discharging cycles, extending battery operational life well beyond a decade and lowering total cost of ownership. The industry is simultaneously addressing sustainability through improved recycling techniques, second-life battery applications, and responsible material sourcing practices.
Green Hydrogen Production Scaling
Green hydrogen—produced via electrolysis using renewable energy—is transitioning from a niche technology to operational industrial-scale deployment. The Netherlands’ H2 Hollandia project reached financial close and is set to become operational in 2026, representing the largest electrolyser in the country. This 5 MW electrolyser, directly connected to a 115 MWp solar park, will produce approximately 300,000 kilograms of green hydrogen annually while helping prevent grid congestion—a creative solution to the growing problem of renewable curtailment.
The global green hydrogen market is anticipated to experience substantial expansion through 2036, with a critical inflection point occurring around 2030-2031 when green hydrogen begins achieving cost competitiveness with blue hydrogen in favorable regions, triggering accelerated industrial adoption. Green hydrogen addresses critical decarbonization needs across transportation, heavy industry, and heating sectors where direct electrification remains challenging. Large-scale projects are advancing across multiple regions, with Phase 1 development beginning in 2026 for several major initiatives involving electrolyzer construction and hydrogen storage infrastructure.
AI-Driven Grid Optimization and Smart Energy Systems
Artificial intelligence is revolutionizing renewable energy integration through predictive forecasting and real-time grid optimization. AI-based tools are reducing system imbalance forecast errors by up to 41%, enabling utilities to maintain grid frequency stability while integrating increasing proportions of variable renewable generation. These machine learning algorithms use weather data and historical measurements to accurately predict solar and wind generation, critically important for grid planning and operational efficiency.
The European Commission will adopt a Strategic Roadmap for digitalisation and AI in the energy sector in 2026, formally integrating AI capabilities across energy infrastructure. AI-driven energy management systems are delivering immediate benefits, with applications including predictive maintenance for wind farms and power lines, real-time fault detection, and automatic power restoration strategies that reduce system downtime and enhance reliability. Smart grid technologies enable dynamic adjustments responding to fluctuating energy supply and demand, while AI algorithms automatically detect faults and switch to backup power sources when necessary.
On the consumption side, AI-based systems are optimizing energy usage by learning user preferences, adapting to weather conditions, and responding to electricity price signals. Belgian tech companies have developed machine learning algorithms that reduce EV charging electricity costs by up to 30% while promoting use of forecasted local energy generation.
Electric Vehicle Grid Integration
The integration of electric vehicles into hybrid grids represents a paradigm shift toward sustainable energy and transportation systems. Smart charging infrastructure is advancing rapidly, enabling two-way communication between vehicles and the grid to optimize charging schedules based on demand, energy prices, and renewable availability. The US EV Grid Integration Solutions market is projected to grow from USD 1.8 billion in 2024 to USD 5 billion by 2033, reflecting massive investment in this critical infrastructure segment.
Vehicle-to-Grid (V2G) technology is emerging as a transformative capability, enabling electric vehicles to not only consume electricity but discharge excess energy back into the grid to provide valuable services including frequency regulation, peak demand shaving, and grid stabilization. While still in early deployment stages, V2G systems are rapidly advancing, with EV aggregators and virtual power plants emerging to harness the collective energy storage capacity of EV fleets.
Regional Renewable Leadership: Latin America
Latin America has established itself as the global benchmark for renewable energy penetration, generating 65% of its electricity from clean sources in 2024, well above the global average of 41%. The region is set to continue consolidating this leadership position through 2026 and beyond.
Brazil plays a particularly central role in the region’s renewable transition, adding 36 TWh of wind and solar generation in 2024 alone, accounting for 78% of wind and solar growth in the entire region. Brazil is implementing comprehensive renewable energy policies, with plans for its first battery energy storage auctions in 2025 and nascent offshore wind regulatory frameworks.
Chile has achieved solar and wind generation exceeding 40% of total electricity in 2024, with related energy storage becoming standard practice. The country is actively developing green hydrogen infrastructure, building on its exceptional renewable energy base. Colombia and other regional nations have established ambitious renewable electricity targets, with Mexico aiming for 45%, Argentina for 57%, Colombia for 70%, and Chile for 80% of power generation by 2030 through competitive renewable energy auctions.
Market Scale and Investment Momentum
The global renewable energy market reflects unprecedented investment and confidence in clean energy’s future. The global solar PV and wind energy market is projected to grow from USD 170 billion in 2024 to USD 450 billion by 2033, representing a 10.5% CAGR. The broader renewable energy market is valued at USD 1.74 trillion in 2025 and is predicted to reach USD 7.28 trillion by 2034 with a 17.23% CAGR, demonstrating exceptional expansion.
Annual global renewable energy investments are surpassing USD 300 billion, with emerging markets in Asia, Latin America, and Africa rapidly expanding their capacity. These investments are driven by declining technology costs, urgent decarbonization needs, corporate sustainability commitments, and increasingly supportive government policies including subsidies and tax incentives.
Critical Challenges and Grid Infrastructure Requirements
Despite remarkable growth projections, renewable energy expansion faces significant implementation challenges that will determine 2026 success. Grid infrastructure modernization remains critical, as variable renewable generation requires enhanced transmission and distribution capabilities, advanced voltage regulation systems, and sophisticated load management. Offshore wind development faces supply chain bottlenecks, complex financing requirements, and environmental considerations requiring coordinated industry and government efforts.
AI’s expanding energy consumption presents a paradox—AI-related electricity consumption could grow by as much as 50% annually through 2030, potentially offsetting renewable gains if not powered by clean sources. Solutions include connecting AI data centers directly to renewable energy sources and implementing advanced efficiency measures.
The momentum toward renewable energy dominance in 2026 reflects a convergence of technological breakthroughs, economic advantages, policy support, and urgency around climate change. Solar energy’s explosive growth, offshore wind’s expansion, energy storage advances, and AI-enabled grid optimization are collectively reshaping global electricity systems toward a cleaner, more resilient future while creating unprecedented opportunities across manufacturing, infrastructure development, and emerging technologies like green hydrogen.