The infrastructure investment case for solar and storage

For most of the past two decades, U.S. electricity demand was largely flat. During that time, utilities planned for incremental growth, and investors financed generation assets in a market characterized by predictable load forecasts. Today, that long period of stability is giving way to a different operating environment.

Hyperscale data centers, advanced manufacturing, and broad electrification are driving sustained increases in power consumption across multiple regions. U.S. data center load alone is projected to more than double from 35 gigawatts (GW) in 2024 to 78 GW by 2035. Utilities are reporting large-load interconnection requests arriving earlier and at a greater scale than prior planning cycles anticipated, even as many grids operate near existing capacity limits. The sector now faces a more complex reality: new generation must be financed and delivered, and it must happen quickly.

For infrastructure investors, the opportunity here is real, but so is the risk of backing the wrong assets. Fortunately, a close look at the data quickly clarifies the leaders: more than 30 GW of solar were installed across the U.S in the first nine months of 2025, while 12.6 GW of energy storage was installed. Together, these resources accounted for the majority of new capacity additions last year, underscoring where the system is already turning to meet incremental load growth. Capital is increasingly following that reality, positioning solar and storage as the next generation of infrastructure investments.

Coming of age

Solar and storage weren’t always the default choice for infrastructure investors. Just over a decade ago, the United States had only a few gigawatts of installed solar capacity and even less utility-scale storage. But growth did not remain incremental for long.

Within a few years, deployment accelerated through a combination of cost compression, expanding procurement pipelines, and early institutional backing. I witnessed this first hand during my time at the Department of Energy’s Loan Programs Office, where I worked on some of the first loans for utility-scale solar facilities, helping validate the asset class for private capital. The federal Investment Tax Credit provided longer-term revenue visibility, while the more recent Inflation Reduction Act expanded incentives for both solar and standalone storage.

The outcome is evident in today’s power system. More than 160 GW of utility-scale solar is operating nationwide, while grid-scale storage deployment now exceeds 137 GWh. Looking ahead, nearly 70 GW of solar is scheduled to come online by 2027, and 24 GW of utility-scale battery storage is expected to be added to the grid this year alone. With deployment and cost trajectories firmly established, the remaining question for investors is how those fundamentals translate into long-term value.

Economics

The reason solar and storage have moved from emerging technologies to essential capacity is ultimately economic. In a market facing accelerated load growth, capital is flowing toward resources that can deliver dependable electrons within defined budgets and timelines, and do so with greater cost certainty over time.

The industry continues to pursue new combined-cycle gas plants, advanced nuclear, geothermal, and other firm resources. While these technologies may play an important long-term role, they face near-term economic and execution constraints. Gas turbines ordered today face delivery backlogs that extend into the end of the decade. Meanwhile, advanced nuclear and geothermal projects, while making progress, have longer development cycles and greater construction risk. In an environment where utilities and large energy buyers are prioritizing access and speed, those constraints matter.

Solar and storage operate under a different economic model. A solar facility requires significant upfront capital, but once built, the primary input — sunlight — is free. A gas or coal plant, by contrast, combines infrastructure investment with decades of fuel purchases, exposing owners to commodity price volatility and geopolitical risk. 

That distinction has become increasingly important. Over the past fifteen years, the levelized cost of electricity from utility-scale solar has declined by roughly 90%, reshaping its competitive position in wholesale markets. At the same time, technological improvements have extended expected operating timelines. A decade ago, many projects were modeled with useful lives of 15 to 20 years. Today, advances in module durability, racking systems, and performance management support lifespans of 30 years or more. For investors, that extension meaningfully lowers lifetime cost per megawatt-hour and enhances long-term return visibility.

That economic advantage is amplified when paired with storage. Battery costs have fallen sharply over the past decade, following a trajectory similar to solar’s earlier decline. Since 2010, lithium-ion battery pack prices have dropped more than 90%, driven by manufacturing scale, chemistry improvements, and supply chain efficiencies. As costs fall and deployment scales, battery storage is becoming more competitive, allowing renewable projects to shift output into higher-value periods and strengthen overall economics. 

Financing structures have evolved in parallel with these cost improvements. The transferability of federal tax credits — preserved in recent legislative negotiations — allows credits associated with solar and storage projects to be sold directly to third parties. That flexibility reduces reliance on traditional tax equity structures, expands the pool of eligible capital providers, and improves transaction efficiency. For infrastructure investors, the result is greater capital liquidity and a more streamlined path to deployment.

For infrastructure investors, the implication is clear. Assets that convert upfront capital into decades of predictable output, without ongoing commodity exposure, offer a fundamentally different risk profile than fuel-dependent generation. As demand accelerates, that distinction becomes increasingly material to portfolio construction.

Infrastructure reality

For years, solar and storage were discussed primarily through the lens of the energy transition. Today, they are being evaluated through a different filter: economics and delivery. Their front-loaded capital structures, improving durability, and limited fuel exposure position them to meet rising demand within real-world constraints. The pace of deployment reflects that shift — and so does capital. In 2025 alone, global investment in the energy transition totaled $2.3 trillion, with approximately $1.2 trillion directed toward renewable energy and power grids.

This is no longer a question of preference or policy alignment. It is a question of which resources can be financed, built, and operated with predictable outcomes. In that context, solar and storage are not alternative assets — they are becoming foundational infrastructure. For investors, that reality makes solar and storage less a thematic allocation and more a disciplined portfolio decision.