The U.S. energy market in 2025 will be shaped by federal policy shifts, state-led renewable mandates, and rising energy costs. While fossil fuel expansion takes priority at the federal level, businesses will face regulatory changes, price volatility, and shifting procurement challenges.
With demand increasing and technology advancing, staying ahead of policy updates, efficiency strategies, and market trends will be key to managing costs and minimizing risk.
Regulatory and Policy Changes Shaping the Market
Under President Trump’s new administration, federal energy policy has undergone a dramatic shift, including the recent “Unleashing American Energy” Executive Order, which accelerates oil and gas leasing on federal lands, streamlines pipeline approvals, and halts new offshore wind development.
These moves align with the administration’s broader push for energy independence and deregulation, aiming to boost domestic production as well as reduce reliance on foreign energy imports. However, these changes have also raised concerns among renewable energy advocates and climate-focused industries, who warn of potential long-term economic and environmental risks.
At the same time, state-level regulations are counteracting federal rollbacks, particularly in states like New York and California, where stricter energy efficiency standards and emissions regulations continue to push businesses toward sustainability-focused energy procurement strategies.
Global Energy Investment and Demand Trends
Beyond U.S. policy shifts, the global energy investment landscape is undergoing a change:
Declining Oil and Gas Investments – Global upstream oil and gas investments are projected to decline by 2% in 2025, marking the beginning of an expected long-term decrease. Meanwhile, shale and tight oil investments are set to drop by 8%, reflecting slowing production expansion.- Renewable Energy Takes the Lead – Investment in low-carbon energy solutions, including wind and solar, is projected to surpass oil and gas investments for the first time by 2025. This signals a major turning point in the energy transition, with renewable energy investments growing by 50% since 2020.
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What this means for businesses…
- Federal incentives now favor oil, gas, and pipeline infrastructure, requiring businesses to reassess energy procurement strategies.
- State-led regulations still prioritize efficiency and renewables, meaning companies with multi-state operations must adapt to a shifting regulatory landscape.
Energy Pricing Outlook and Market Volatility
The EIA forecasts record-high U.S. crude oil production in 2025, averaging 13.5 million barrels per day (EIA). However, global factors may still introduce volatility, with Brent crude expected to average $74 per barrel, “8% less than in 2024, and then continue to fall another 11% to $66/b in 2026.”
Demand for natural gas is also on the rise, particularly from AI-driven data centers and industrial electrification. U.S. natural gas demand is projected to reach a record 104.5 bcfd in 2025.
Meanwhile, wholesale electricity prices are projected to increase by an average of 7% in 2025, with California and the Southwest seeing hikes of 30-35%. Rising natural gas prices (up 24%) will contribute to these cost increases.
What this means for businesses! With higher electricity and fuel costs looming, companies should focus on long-term energy procurement strategies, energy efficiency investments, and demand-side management solutions to reduce exposure to price swings.
The Renewable Energy Landscape and Policy Uncertainty
Despite federal policy shifts, renewable energy continues to expand. The EIA estimates that renewable energy sources will contribute 25% of U.S. electricity generation in 2025. Solar power is expected to lead this growth, with the electric power sector adding 26 gigawatts (GW) of new solar capacity in 2025 and an additional 22 GW in 2026. These additions are anticipated to increase U.S. solar generation by 34% in 2025 and by 17% in 2026.
However, as federal support declines, businesses will need to rely more on state-level incentives and corporate sustainability programs to sustain their renewable energy commitments.
The key takeaway? Companies should continue exploring Power Purchase Agreements (PPAs), on-site solar solutions, and energy storage investments to maintain cost stability and sustainability goals.
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Technology and AI in Energy Efficiency
The rising energy demands of AI-driven data centers and industrial automation are reshaping energy consumption patterns. According to the EIA, U.S. electricity demand is projected to grow 2% annually in 2025 and 2026, marking the first three-year consecutive growth streak since 2005-2007.
Businesses are responding by integrating AI-driven energy management systems to track usage, forecast costs, and optimize procurement. Smart grid technology and demand response programs are also becoming vital tools, allowing companies to reduce usage during peak pricing periods.
What this means for businesses… Companies that invest in real-time energy monitoring, AI-driven load balancing, and automation will gain greater control over costs and consumption, positioning themselves for long-term resilience.
Recap & Strategic Tips for Businesses
Successfully managing energy costs and energy procurement in 2025 will require a proactive approach. Businesses should:
✅ Diversify Energy Procurement Strategies – Secure long-term renewable contracts where incentives remain available while keeping options open with natural gas and on-site generation.
✅ Improve Energy Efficiency – Upgrade to energy-efficient HVAC systems, optimize building management systems, and implement smart grid technologies to lower costs and enhance grid reliability.
✅ Stay Ahead of Regulatory Changes – Keep up with federal rollbacks and evolving state-led clean energy programs to ensure compliance and adjust procurement strategies accordingly.
✅ Take Advantage of Incentives – With shifting federal policies, businesses should maximize state-level grants, tax credits, and corporate sustainability programs to reduce costs.
✅ Utilize Battery Storage Solutions – Invest in energy storage to help manage peak pricing, reduce dependence on volatile electricity rates, and improve overall energy resilience.
✅ Work With An Energy Advisor – Pilot Energy’s energy advisory services help businesses adapt to evolving policies by offering tools and solutions to stay ahead.
About Pilot Energy
Founded in 2001, Pilot Energy is an unbiased and independent energy procurement advisor that empowers leaders to confidently know when, where, and how much energy to purchase by leveraging our unique blend of industry knowledge and innovative digital platforms. Putting our know-how to work daily, we drive clarity and control in decision-making and take pride in providing unparalleled personalized service. Guiding businesses with strategic innovation while committing to sustainable solutions.
Ready to improve energy procurement strategies? Schedule a free consultation from Pilot Energy today!