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2025 outlook

Grid edge: what to look for in 2025

From distributed energy resources (DERs) to electrification and grid modernisation, our US grid edge experts share their view of the key themes to watch in the coming year.

In the full report:

  • Data centre developer focus turns from electrons to molecules
  • Microgrid value stack expansion
  • New high-water mark for utility smart grid investment
  • And more

2 minute read

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Elham Akhavan

Senior Microgrid Research Analyst

Elham leads our microgrid and distribution automation research under the Grid Edge team

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Oliver McHugh

Senior EV Charging Research Analyst

Oliver analyses the global EV charging market, with a focus on North America.

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The grid edge is at the heart of the energy transition. The distributed technologies and resources that exist in proximity to the end user, rather than at the centre of a traditional generation network, are integral to an increasingly electrified world. Key examples include electric vehicle (EV) charging infrastructure, behind-the-meter (BTM) resources, heat pumps and grid modernisation.

It’s a fascinating arena, fuelled by innovation. But what are the hottest grid edge topics right now? What are the factors that will shape the sector through the year, and beyond? Our grid edge experts have drawn on unique insight from Lens Power to compile our picks of what to look for in 2025. Fill in the form for a complimentary copy of the full report, and read on for an introduction to a few of the key themes.

New models will emerge for using natural gas to power data centres

Data centres are transforming US power market dynamics. While their near-term dependence on natural gas is becoming increasingly clear, look for developers to find sustainable ways to use it in 2025. For instance, Meta has pledged to contract US$35 million in carbon removal projects in 2025, and in particular has offered to install CCS at an existing 1 GW Entergy gas plant that will be supporting its forthcoming 1.5 GW campus in Louisiana.

More unorthodox developments could emerge this year too. Could we see more developers ‘jump the grid’ to run data centres off excess associated gas at oil wells? Read the full report for more on this.

New heat pump deployments will continue to outpace fossil fuel heating due to state support

In 2024, heat pump deployments outpaced fossil fuel systems for the third consecutive year, signalling a sustained shift in heating system adoption. This momentum will be carried into 2025 – despite federal uncertainty.

In recent years, the federal government has supported consumers to offset heat pump installation costs, primarily through the Inflation Reduction Act (IRA) Home Energy Rebates programmes.

With the change in administration, states’ ability to secure federal funding in the future is unclear – something state officials are clearly mindful of, with 40% of state applications in 2024 submitted following the election.

Nonetheless, the heat pump market will remain strong on the back of continuing state commitments. Last year nine states set a goal for heat pumps to make up 65% of new residential heating system by 2030, which increases to 90% by 2040. States are not just making commitments but acting on them. Find out more in the full report.

Also in What to look for in 2025: grid edge

Can microgrids continue to grow in scale and value proposition? US VPP providers face changing markets and new competition from across the pond – what impact will that have? And while the growing EV charging market looks set for new entrants and technological advancements, how significant is the threat from slow-moving utilities and new energy policy in 2025? Find out about this and more in the full report.

Fill in the form at the top of the page to download your complimentary copy.