The energy sector is transforming as the world pivots to cleaner energy solutions. In 2025, several important trends and strategic shifts are expected to shape this landscape. The nuclear industry, solar power profitability, and investments in solar infrastructure are set to experience significant changes, reflecting both opportunities and challenges.
According to the “Energy outlook 2025: Falling prices, but rising risks” report by the Economic Intelligence Unit(EIU) “Global energy demand will slow and prices will fall, barring an escalation in geopolitical risks.”
The report indicates that low economic growth will restrict global energy consumption increases to just 1.6%, with particularly subdued demand in Europe. In 2025, over 250 GW of combined solar and wind capacity is expected to be installed, primarily in China, as governments aim to reduce emissions and enhance energy security.
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While demand for oil, gas, and coal will accelerate, expanding supplies are projected to moderate prices. Additionally, energy markets will continue to grapple with geopolitical risks arising from ongoing conflicts in the Middle East and Ukraine.
Here are the 3 trends transforming the energy sector in 2025
Nuclear power’s renewed role
The nuclear sector may witness a resurgence in 2025 as countries seek reliable, clean energy sources to meet growing power demands. The push towards nuclear energy follows a collective commitment by many countries at COP28 to triple nuclear capacity by 2050, aiming to reduce carbon emissions and secure energy for increasingly sophisticated technological infrastructure. With high-energy demands from sectors like AI and data centres, nuclear energy provides a dependable power source that aligns with global decarbonisation goals.
This commitment to nuclear energy expansion will likely continue at COP29, to be held in Azerbaijan. The host country has expressed interest in focusing discussions on the potential role of nuclear power, emphasising its relevance for achieving global energy security and sustainability objectives. Reflecting this momentum, major corporations are already investing in nuclear solutions to support their growing energy needs. For example, Microsoft signed a contract in September 2024 with Constellation Energy to restart operations at the Three Mile Island nuclear plant in Pennsylvania, US, marking a milestone in private sector support for nuclear energy.
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Shifting profits in the solar sector
Solar panel prices reached record lows in 2024 due to production overcapacity in China, which supplies 80% of the world’s solar panels. Although lower prices benefited consumers, manufacturers are facing pressures on profit margins as the Chinese government phases out subsidies and new tariffs in key markets pose additional challenges. These dynamics could reshape the global solar market, influencing production, pricing, and distribution strategies.
The impact of tariffs, particularly those imposed by the US on imports from ASEAN-4 countries—Cambodia, Malaysia, Thailand, and Vietnam—has led some Chinese companies with operations in these regions to pause production. As they navigate these regulatory hurdles, solar panel producers face the dual challenge of maintaining affordability and profitability. The evolving trade environment may compel firms to adapt their manufacturing and export approaches, focusing on operational efficiencies and alternative markets.
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Expanding solar investments
In response to ongoing tariffs in Europe and the US, solar panel manufacturers are exploring new markets and considering shifts in production locations. Some companies plan to build factories in North America and eastern Europe to circumvent tariffs, creating an opportunity for these regions to boost local production and reduce dependence on Chinese imports. Additionally, manufacturers are investing in emerging markets, particularly in Latin America, Africa, and Belt and Road Initiative (BRI) member countries.
Shipments of solar panels to these fast-growing economies surged in early 2024, revealing the potential for these markets to absorb excess supply from China. This shift could support the energy needs of rapidly developing nations while helping Chinese manufacturers diversify their customer base. With increasing demand for renewable energy in these regions, Chinese infrastructure firms may also find opportunities to support grid redevelopment projects, reinforcing their influence in global energy infrastructure.
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