(The Center Square) – Officials in Pennsylvania spent much of 2025 grappling with ways to modernize the state’s energy mix while preparing for a surge of new demand.
In 2026, the pressure will be even higher as AI data centers driven by Microsoft and Amazon come online. And it seems everyone, including Gov. Josh Shapiro, has big ideas for the future.
The governor’s Lightning Plan and a competing push for both fossil fuel and renewable projects drove debate over a host of issues, all circling the same question of whether new generation can be added to the grid fast enough.
Billed as an “all of the above” energy strategy designed to lower consumer costs, create energy jobs, and streamline approval of new power projects in the commonwealth, it has met opposition on several fronts.
The plan – House Bill 501 – requires 35% of generation to come from renewable sources within 10 years. It advanced from the House Environmental & Natural Resource Protection Committee in June by a 14-12 party-line vote, with no Republicans in support. In October, it was removed from the table, with no further action to date.
It also seeks to create the Reliable Energy Siting and Electric Transition (RESET) board, intended to expedite the approval of major energy projects. However, some opponents claimed that it would undermine municipal zoning and local control. In April, it was referred to the House Energy Committee, where it awaits further action.
Industry experts say clean energy projects can be built quickly and affordably, though getting the proposals through the legislative process may take time.
Lawmakers wanting to make solar a part of the state’s broader energy strategy say last year’s budget impasse stalled momentum and now hope the bills will rise on the priority list.
The Solar for Schools Grant Program is one exception: the legislation creating it passed last session with bipartisan support and backing from environmental and labor groups. In the pilot round, demand outpaced funding. The Pennsylvania Department of Community and Economic Development received 88 applications from schools across 25 counties requesting $88 million – more than three times the available $25 million. The administration added another $25 million to the budget in 2025-2026 to expand the program.
A bill to conduct a study on the viability of renewable energy projects on Lake Erie has been lying dormant since May.
During a House Environmental & Natural Resource Protection Committee meeting on the subject, supporters emphasized that the study explores the opportunity to diversify Pennsylvania’s energy portfolio while prioritizing the use of clean, renewable energy without increasing utility prices. Opponents expressed concerns over the impact on wildlife, outdoor recreation, shipping, and tourism.
House Bill 1155, a Democratic-backed community solar proposal, would let people who can’t install panels at home, such as renters, subscribe to a shared solar project to lower their electricity bills while strengthening the grid. It’s also designed so non-subscribers aren’t responsible for costs associated with the program.
Legislation in both chambers takes advantage of the proliferation of warehouses that have popped up in the commonwealth by making use of their rooftops to deploy solar.
House Bill 1260 proposed requiring new warehouses to be built “solar-ready” while offering tax incentives to retrofit existing structures. In parallel, Senate Bill 983 would create a commercial and industrial rooftop solar program designed to streamline front-of-meter projects – installations that can send power back into the grid.
Supporters argued that rooftop solar avoids new land use fights and can scale quickly compared with large greenfield developments. Skeptics warned mandates risk government overreach and suggested incentives-only approaches would be more politically viable.
Federal money is also on the table to help low-to-moderate income households install solar through the Solar for All program, but Pennsylvania law requires legislative approval before it can be accessed.
House Bill 362 was introduced to clear the way for the Pennsylvania Energy Development Authority to tap into the $156 million the EPA awarded in 2024 through the Inflation Reduction Act. The program promises at least 20% savings on electricity bills while also supporting workforce training and upgrades needed to make solar possible.
The tax credits for wind and solar being phased out by the congressional budget resolution passed in July was widely viewed as a blow to the renewable energy industry but clean energy advocates remain optimistic.
Even as electricity costs are projected to rise over the next decade, they say, some wind and solar developments can still qualify for credits if construction begins within a year of the law’s passage. And federal incentives remain available for other technologies such as geothermal and battery energy storage – an especially important opening for Pennsylvania as power demand climbs alongside major tech-sector investment.
Still, others warned that repealing bipartisan federal tax credits for energy manufacturing could jeopardize $1.34 billion in potential investment. Reduced investment and rising energy costs, they say, would lead to 26,000 fewer jobs by 2030 and nearly 29,000 fewer by 2035 compared to projections under current tax policy.
They pointed to a report projecting that the elimination of energy-related tax credits would reduce new clean power additions to the grid by 57% to 72%, even as the state’s energy demand is expected to rise by 4.5 to 6.5 TWh by 2026. Additionally, without technology-neutral federal incentives, electricity prices could jump 8% over the same period.
Technology companies responsible for power-hungry data centers have hitched their hopes on a resurgence of nuclear power. Amazon and Microsoft have both enlisted existing plants to fuel their AI infrastructure, while the industry looks toward the development of small modular reactors for future output.
The reaction to the reopening of Three Mile Island through a purchase agreement with Microsoft remains split. Supporters emphasize jobs and carbon-free baseload power while opponents focus on waste, risk, and site concerns.
As renewables and nuclear advanced in committees, advocates made the argument for the reliability of natural gas and touted pipeline expansion as a key to U.S. energy dominance.
At Shale Insight 2025, hosted by the Marcellus Shale Coalition in Erie, the message from industry leaders and policymakers was consistent: natural gas remains the backbone of America’s energy system. Expanding pipeline capacity, modernizing regulations, and protecting affordability were framed as essential to meeting rising demand in a rapidly changing landscape.
At the conference, U.S. Secretary of the Interior Doug Burgum warned against policies that shut down base loads like gas and nuclear plants while prioritizing highly subsidized, intermittent, and unreliable renewable sources of electricity – arguing such policies have led to higher costs and less reliability.
Participants widely agreed natural gas is the cornerstone of U.S. energy, while highlighting overlapping concerns over grid reliability, affordability, and infrastructure bottlenecks.
Marcellus Shale was also mentioned in a study by the National Energy Technology Laboratory suggesting wastewater from the region could supply 40% of U.S. lithium needs – an exciting prospect as lithium demand surges for phones, EVs, and grid-scale storage. This, however, presents a dilemma for clean energy advocates, as it comes from hydraulic fracturing, or fracking – an industry they oppose.
Throughout the year, affordability and reliability framed every discussion. As 2026 begins, the question isn’t whether Pennsylvania needs more power – it’s about who will decide what gets built – and how fast.
