What does 2026 have in store for the global energy transition?
If the past decade was defined by the expansion of renewables, 2026 may be the year the energy transition entered a more complex phase.
Published on January 9, 2026
© Jesse De Meulenaere - Unsplash
Mauro swapped Sardinia for Eindhoven and has been an IO+ editor for 3 years. As a GREEN+ expert, he covers the energy transition with data-driven stories.
After years of record-breaking renewable growth, the coming year is shaping up to test the system’s limits, as solar installations slow, grid bottlenecks intensify, and fossil fuel markets send mixed signals.
As pointed out by Forbes analyst Robert Rapier, 2026 will be a year of great contradiction: as fossil fuel supply grows, “reliable, dispatchable power has become the scarcest energy commodity in the developed world.” Renewable energy capacity additions will not stagnate, yet outdated electricity grids are the greatest obstacle to overcome to keep the energy transition’s momentum.
A decline in solar power additions
In 2025, solar power additions peaked, exceeding 500 GW. Half of this capacity has been added by China alone. According to an analysis by the intelligence company S&P Global, annual additions will slow by approximately 10% in 2026.
This slowdown is attributable to a slowdown in installations in China, which is expected to add 200 GW this year, a third less than in 2025. Although analysts predict growth in other world regions, no one can compensate for the additional capacity.
Analysts suggest that it is the first time that solar power additions will contract. Nevertheless, S&P Global notes that this slowdown would not result in stagnation, as cumulative solar photovoltaic capacity is projected to double over the next five years.
The last year of the Dutch salderingsregeling
In the Netherlands, 2026 is the last year when the solar panels' net metering scheme (salderingsregeling) is in place. The phaseout of this measure, which compensated solar panel owners for the electricity they feed into the electricity grid, will inevitably have its consequences.
In fact, some of the repercussions are already visible. According to preliminary estimates published by Dutch New Energy Research, in 2025, there were 164,000 new solar panel installations—a 72% decline from the record year of 2023. Concurrently, home battery installations are increasing.
The Dutch situation reflects a similar European situation. As reported by trade association Solar Power Europe, for the first time in a decade, new solar installations in the bloc contracted. The organization predicted that the slowdown in solar panel installations would continue in 2026 and 2027. While the EU met its 2025 solar capacity target, challenges such as grid congestion threaten to jeopardize its 2030 goal of 750 GW of installed capacity.
Grid investments need to ramp up
To this end, investment in grid infrastructure will move center stage, per S&P Global. The underinvestment in grids, which persisted for years, is now a critical bottleneck to electrification, decarbonization, and digitalization.
The European Commission estimates that €584 billion in grid expenditure is needed by 2030, and double this amount by 2040. The lengthy permitting processes represent a significant barrier to upgrading a network in which 40% of the grids are over 40 years old.
In the United States, the rise in energy demand from AI and cloud computing is straining the network as data centers expand. The S&P report reads: “The energy expansion required to satisfy AI-driven demand growth will only move as fast as the grid allows.” The same analysis predicts that around $500 billion will be spent in the US to build new data centers.
Overall, the report forecasts an uptick in global power spending. As shown in the graphs below, spending on power generation, transmission and distribution, and battery energy storage will surge through the end of the decade relative to the previous five-year period.
Coal-derived power to start declining
In its Coal 2025 report, the International Energy Agency (IEA) projects that competition from other energy sources will cause coal-fired power generation to decline from 2026 onward. Currently, two-thirds of coal consumption comes from the power sector. According to the organization, global coal demand is projected to decrease by 2030.
China consumes more than half of the world’s coal. Still, as Beijing continues to add renewable capacity, demand is projected to decline by the end of the decade. Conversely, India and Southeast Asia will experience annual increases of 3% and 4% in coal consumption, respectively, through 2030. Coal demand in the European Union decreased, too—albeit at a lower pace compared to the previous two years.
The year of a great contradiction
According to the IEA, 2026 will see a significant oversupply of oil, reaching 4 million barrels per day, sufficient to meet global demand.
As the world electrifies—especially in China—the trajectory of fossil fuel consumption is expected to decline in the coming years. Again, the key to sustaining momentum in the energy transition is investment in grids, which, alongside storage, will make solar and wind more reliable.