Energy Efficiency in 2025: Challenges, Opportunities, and the Fight for Progress

In 2025, energy efficiency will be at a crossroads, facing both hurdles and opportunities as electricity demand soars and federal policies shift under a new administration and Congress. With industrial expansion, electrification, and data centers driving an expected 16% increase in power use over the next five years, energy efficiency is a critical tool for managing demand and keeping costs in check. Utilities and state regulators will play a key role in ramping up efficiency programs to offset rising energy needs. 

Artificial intelligence is a double-edged sword—it’s increasing power demand but also has the potential to optimize systems and cut energy waste. AI-driven efficiencies could significantly reduce energy use and emissions by 2050, and ACEEE is diving into ways to harness this technology for smarter energy management. 

On the federal front, energy efficiency faces significant threats. President-elect Trump has signaled plans to slash climate funding from the Inflation Reduction Act (IRA), which could put vital efficiency programs at risk. However, there’s still room for bipartisan progress, particularly in areas like industrial competitiveness, affordable housing, and transportation. ACEEE is working to protect key policies, including tax credits for energy-efficient homes and funding for state-led retrofit programs aimed at lowering energy costs for low-income households. 

As federal support wavers, state and local governments are stepping up. They’re leading efforts on electric utility regulation, building codes, and equipment efficiency standards—areas where ACEEE is actively providing support. Meanwhile, businesses are pushing forward with their own efficiency initiatives, driven by cost savings, sustainability goals, and shareholder expectations. 

Despite the challenges ahead, ACEEE remains optimistic. By championing energy efficiency across industries, homes, and businesses, we can tackle rising energy demand, boost economic competitiveness, and make energy more affordable—all while reducing climate impacts. The fight for energy efficiency isn’t slowing down, and ACEEE is committed to keeping it front and center in 2025 and beyond.