Total U.S. electricity sales expected to grow 0.7% annually through 2040

Electricity sales are expected to continue growing in the U.S. through 2040 even as consumers use energy more efficiently, the EIA reported. In 2015, 3.7 trillion kilowatthours (kWh) of electricity was sold, and the administration expects that number to rise 0.7% annually through the end of its Annual Energy Outlook (AEO).

EIA Electricity Sales through 2040

The EIA’s most recent AEO takes the EPA’s Clean Power Plan (CPP) into consideration, and assumes consumers will receive subsidies of 10%-15% between 2020 and 2025 for energy efficient appliances, equipment, and building envelope improvements. The increased focus on efficient power use will keep overall electricity sales down, said the EIA, but they will still grow.

Currently, the residential sector is the largest electricity-consuming sector, with 1.4 trillion kWh sold, making up 38% of total electricity sales in 2015. The EIA anticipates the number of households will increase 0.8% per year, while residential energy intensity, or the average electricity per household, falls 11.3% from 2015 to 2040. Despite the leap in efficiencies, the growing overall number of homes should continue to push total electricity purchases higher.

Electricity sales to commercial consumers are projected to increase at an average annual rate of 0.8% as well. Energy intensity, which is calculated as electricity sales per square foot of floorspace for commercial purchasers, is projected to decline 0.3% annual as total commercial floorspace increases 1.1% per year over that same time period. Federal energy efficiency standards, as well as technological improvements in lighting, refrigeration, space heating, and space cooling, contribute to the decline in electricity intensity.

Sales to industrial users shows a similar trend, with sales projected to increase 1.1% per annum on average from 1.0 trillion kWh in 2015 to 1.2 trillion kWh in 2040. Energy intensity for the industrial sector, which measured as electricity sales per dollar of industrial shipments, are forecast to decline an average of 0.8% per year as the value of industrial shipments grows 1.9%. In addition to more efficient technologies, a shift away in the economy from electricity-intensive industries will contribute to lower energy intensity.

EIA Electricty Energy Intensity

Solar PV systems playing a major role in lower electricity sales growth

Electricity from solar photovoltaic (PV) systems is also expected to increase over the course of the AEO, contributing to slower growth in electricity sales. An extension of federal tax credits for residential and commercial solar PV systems, combined with the expected continuation of declining PV prices, will spur increased adoption of residential and commercial PV through 2040, said the EIA. The agency believes generation from residential PV systems will reach 90 billion kWh, while commercial systems will generate 36 billion kWh by 2040. Residential and commercial electricity sales would be 5.0% and 1.7% higher, respectively, in 2040 without the electricity generated by rooftop PV systems, according to the EIA.

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