Pennsylvania solar installer Solar States and the broader industry are adapting to the elimination of federal residential tax credits by shifting to third-party ownership models that allow installation companies to claim commercial credits and pass savings to homeowners through leases and power purchase agreements.
Governor Josh Shapiro's Lightning Plan to expand energy generation and attract data centers through tax incentives and utility reforms draws mixed responses, with supporters praising grid modernization efforts while critics warn that renewable mandates and rate caps could increase costs and reduce reliability.
Pennsylvania Governor Josh Shapiro announced plans to limit utility company profits and eliminate junk fees, creating a new watchdog to scrutinize company books and seeking legislation to cap returns on infrastructure investments as electricity rates rise due to supply-demand gaps and data center growth.
PJM Interconnection warns that the region will fail to meet required power reserves starting June 2027 due to slow replacement of retiring power plants and surging demand from electrification and data centers, leaving the 13-state grid more vulnerable to outages for the first time in its history.
While data centers are driving significant electricity demand growth, states have existing processes to manage large developments and many proposed projects are unlikely to be built. A new report shows data centers account for about 9% of global electricity demand increase through 2030, with factories leading at 36.5%.
Extreme cold temperatures challenge Pennsylvania's power grid as natural gas plants face mechanical failures and fuel delivery constraints during peak demand. Experts suggest improving winter resilience through advanced energy resources like battery storage, demand response, and virtual power plants as alternatives to gas-fired generation.
Pennsylvania ranks 49th nationally for percentage growth in solar, wind, and geothermal generation over the past decade, according to PennEnvironment's State of Renewable Energy 2025 report. The commonwealth saw strong growth in electric vehicles (14th) and charging stations (10th), but renewable energy brought online since 2015 would power fewer than 4% of Pennsylvania homes. Environmental advocates are calling for passage of Gov. Shapiro's Lightning Plan to accelerate clean energy growth.
Grid operator PJM and governors from 13 states, including Pennsylvania, are pursuing different approaches to manage data center power demands and rising electricity costs. The Trump administration and governors support requiring data centers to pay for additional power through new rate classes, while PJM proposes allowing data centers to "bring your own generation" with expedited grid connections. Both plans aim to insulate regular consumers from data center impacts as electricity prices spiked over 20% in 2025.
Pharmaceutical giant Eli Lilly announced a $3.5 billion manufacturing facility in Upper Macungie Township, Lehigh Valley, the largest life sciences investment in Pennsylvania history. The 925,000 square foot campus will produce next-generation weight-loss medicines including retatrutide and create 850 permanent jobs plus 2,000 construction jobs. The facility was selected from over 300 applications and is expected to begin construction in 2026 with operations starting in 2031.
Gov. Josh Shapiro announced his GRID standards requiring data center developers to bring their own power generation, commit to transparency and community engagement, hire local workers, and protect the environment. The governor emphasized Pennsylvania's role in AI development while addressing concerns about data centers' impacts on communities, utility bills, and the environment.