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March 17, 2025 •Danielle Marquis, Esq.
If the history of electricity use in the US were a Hollywood movie, the events of 2024 would be major turning points in a dynamic narrative.
Data center proliferation along with increases in domestic manufacturing and electrification have caused demand on the US electric grid to increase at rates we haven’t seen for a quarter century. Meanwhile, substantial funding from the Inflation Reduction Act (IRA) has incentivized businesses and homeowners to retire old appliances and equipment and upgrade to clean, efficient, electric models. The combination of load growth and shift from electrification has made load management more important than ever, even in areas of the country that haven’t previously had a need to reduce peak demand, while adding winter peaks to areas that previously have only experienced summer peaks.
What events and developments will 2025 add and how will they affect the grid and the power that drive our lives? Let’s examine a few trends that are sure to have an impact.
1. Load Management Will Continue to Help Keep the Grid Balanced
Before the early 2000s, a growing economy and increased use of electric products such as air-conditioning, computers, and incandescent lighting led to electricity demand spikes of up to 30%. That era of intense load growth was followed by almost two decades of relatively flat electricity demand due in part to load management efforts by electric utilities, grid operators, appliances standards (think LEDs), and both residential and commercial consumers.
Look for history to repeat itself in 2025.
The Department of Energy predicts that electricity demand in the US will grow roughly 15-20% over the next ten years and double by 2050. Just as they did nearly 25 years ago, utilities and their customers will help offset rising demand with energy efficiency and load management programs, including direct load control, managed charging, behavioral demand response, and the like.
Because they reward participants for reducing excess usage while helping keep the grid reliable, affordable, and secure, these programs are becoming more popular and will continue to grow this year.
2. Energy Equity Will Improve for Low-Income Customers
2024 was a banner year for clean energy thanks to federal incentives from the IRA. Many states throughout the country took advantage of funding to develop lucrative programs for low-income and tribal customers, in particular.
While the future of IRA funding remains uncertain, most state decision-makers filed their applications in advance of the inauguration and many more are currently launching or have already launched their programs, including New Mexico and North Dakota. Expect state decision-makers and energy offices to continue on this path, especially those related to energy equity. Using already distributed funds from the IRA, state energy offices will expand their program impacts by partnering with electric utilities to implement integrated energy efficiency and electrification programs over the next three years that stack and braid incentives to maximize conversions, help balance load growth with energy efficiency, and provide historically underserved communities equitable access to safe, reliable, and affordable clean energy.
At Franklin Energy, we believe these utility and state partnerships are critical to advancing energy efficiency and electrification initiatives and we’re hosting an event the end of March to help build those bridges and help all people benefit from clean energy.
3. Meter-Based C&I Programs Will Redefine Efficiency with Real-Time Performance Tracking
Meter-based commercial and industrial programs are transforming how energy savings are tracked and rewarded, shifting from forecasted estimates to real-time performance at the meter. This approach, driven by the Total System Benefit (TSB) model, ensures aggregators are paid based on the actual value they deliver to the grid. By prioritizing peak-period reductions—where energy is most expensive—these programs maximize grid benefits and customer savings. Unlike traditional deemed savings models, meter-based programs use Normalized Metered Energy Consumption (NMEC) to compare a building’s current performance against its own historical data, or that of similiar buildings, allowing for accurate, site-specific measurements that reflect real efficiency gains.
This shift benefits all stakeholders. Utilities only pay for verified savings, eliminating inefficiencies from forecast-based projections. Aggregators receive direct incentives based on actual reductions and have the flexibility to design a market offering that is attractive to customers. These approaches make participation cost-effective and risk-free for utilities. Aggregators and implementers are incentivized to ensure continuous energy improvements, catching and correcting inefficiencies in real time. With major utilities across the country already leveraging this model, meter-based programs are proving essential for grid stability—especially in states facing reliability challenges. By ensuring every dollar spent on energy efficiency delivers measurable impact, these programs pave the way for a smarter, more resilient energy future.
4. Whole-Home Energy Auditing Technology Will Help Auditors Comply with IRA Funding and Stack Utility Funding
The IRA includes the Home Efficiency Rebates (HER) program which provides $4.3 billion to state energy offices for rebates to single-family or multi-family homeowners who improve their building’s overall energy use by at least 20%. The HER program mandates standardized, whole-home energy modeling using a BPI-2400 certified audit to calculate potential savings. Utilities will also benefit from these auditing tools, by providing customers with more accurate savings predictions, while dramatically increasing project-level realization rates.
As programs grow and home energy audits ramp up in 2025, expect even more auditors to use BPI-2400-compliant technology such as Franklin Energy’s Snugg Pro energy auditing and productivity platform. In 2024, the Snugg Pro platform was in use in all 50 states by more than 2,000 companies.
5. Electrification will Become Even More Beneficial for Everyone
Electrification will continue to (pardon the pun) surge in 2025. Consider the projections for electric vehicles and heat pumps in the US.
The International Energy Agency (IEA) reported in its annual electricity report that electrification in the transportation and building sectors will play a key role in the country’s electricity use growing 1.5% from 2024 to 2026. The IEA projects that the US will sell 2.5 million fully electric vehicles in 2025, up from 1.1 million in 2024. Utility-sponsored heat pump programs already provide lucrative incentives and could potentially reward residential and commercial heat pump owners for enrolling their heat pumps and other smart appliances and equipment to reduce or shift load when dispatched to help keep the grid balanced and resilient.
Regardless of the change in policy focus of the current administration, we expect electrification to continue to expand across transportation, industrial processes, buildings, and homes. State-wide government incentives in at least 25 states that are not at risk have helped accelerate the adoption of heat pumps and electric vehicles. And utilities are expected to capitalize on the potential for load growth by offering incentives for electrification products such as heat pumps, EV chargers, electric yard equipment and more. Integrated marketplaces, where customers can pre-enroll in managed charging or load management programs at checkout to help lighten the load, are expected to be popular as utilities focus on program designs that provide a smooth customer journey.
The Environmental Protection Agency reports that electrification has helped the US power sector reduce greenhouse gas emissions by about 15% since 1990. Electrification will continue to trend in the right direction in 2025, powering sustainable benefits for everyone.
On to the Future…
2025 is poised to be an eventful year for clean energy. At Franklin Energy, we’re committed to continue innovating, collaborating, and integrating offerings across our consulting, program implementation, products, and design/build divisions to deliver solutions that improve life in the communities we serve. If you have any questions about how you can help make 2025 a year to remember for safe, reliable, affordable, clean energy, connect with us.
Here’s to the next chapter!
