Energy Prices Continue to Escalate
The three-year rolling average growth rate of electricity consumption in the United States peaks in 2023 as the economy returns to pre-pandemic levels of economic activity. In the short term, demand for electricity may fluctuate as a result of year-to-year weather, economic shocks, or other unpredictable events. Economic growth drives longer-term trends in electricity consumption, although the growth is somewhat offset by efficiency improvements. In the Reference case, the average annual growth rate of electricity consumption surpasses 1% but not until near the end of the projection period. Electricity demand in the AEO2022 High Economic Growth case grows about 0.25% faster than in the Reference case, and it grows about 0.25% slower in the Low Economic Growth case.
Through the projection period, onsite generation of electricity expands significantly in the U.S. residential, commercial, and industrial sectors, reducing growth in electricity purchased from centralized generators. We project that residential, commercial, and industrial sector onsite solar PV systems will account for more than 8% of total electricity generation by 2050, almost double the share held by onsite power generators in 2021.