US Net New Generation Capacity Added 5.7GW in June; Storage and Solar Lead the Way

Overview

This is a Goldman Sachs report tracking US power capacity pipeline data. Based on the latest June 2026 data from the U.S. Energy Information Administration (EIA), the report tracks current planned and commissioned new generation capacity in the US grid, with a focus on capacity progress across different technology routes, delays and cancellations in the project pipeline, and discusses constraints on power infrastructure imposed by labor availability. The core conclusion is: net new capacity in June grew significantly, driven mainly by battery storage and solar; the renewable energy pipeline remains robust overall; and labor shortages are becoming a critical bottleneck for AI/data centers and broader power demand growth, which in turn benefits EPC contractors and large utilities capable of securing labor at scale.

Core views

The most significant change in this data is that US system net new generation capacity reached 5.7GW in June, far higher than the 3.9GW in the same period last year and the highest level in the past ten years for June. Goldman Sachs notes that this growth was driven mainly by two increments: battery storage (+2.7GW) and utility-scale solar (+2.6GW). In terms of full-year progress, cumulative capacity added through June has reached 42% of Goldman Sachs' 2026 full-year net new capacity forecast, above the 39% average for this period since 2020. Year-to-date progress varies significantly by technology: wind additions have progressed to 74% of the full-year forecast, storage to 63%, CCGT (combined-cycle gas turbine) to 38%, solar to 34%, and simple cycle natural gas rose from 3% one month ago to 11%. There were no retirements of coal capacity this month; year-to-date cumulative retirements total 1.7GW, representing 46% of the full-year forecast of 3.7GW. In terms of project pipelines, the solar pipeline currently corresponds to 75% of Goldman Sachs' 2026 net new forecast (down from 85% in May, mainly due to capacity coming online this month), while the 2027 pipeline corresponds to 109% of the forecast. Wind pipelines correspond to 57% and 96% of forecasts for 2026 and 2027, respectively. The report cautions that the renewable energy pipeline shows a clear decline during the 2028-2030 period, which may point to longer project development cycles or uncertainty related to the phasing out of tax credit policies. Regarding natural gas pipelines, the report emphasizes that projects remain highly concentrated in 2028 and 2030. In March EIA data, 17GW of natural gas projects entered the pipeline (of which 12GW came from a single company, Fermi America), concentrated mainly in 2030. Currently, natural gas projects planned for 2028 represent 99% of Goldman Sachs' new addition forecast for that year, and those for 2030 represent 155%; both ratios are lower than the 116% and 232% released in May, mainly because Goldman Sachs increased its natural gas supply forecast, increasing the denominator. The 2026 and 2027 natural gas pipelines correspond to 62% and 93% of Goldman Sachs' net new forecasts, respectively. The report lists labor availability as the most critical constraint. Goldman Sachs estimates that to meet power demand growth through 2030, the US power industry needs to add more than 500,000 workers or achieve significant productivity gains; approximately 300,000 would come from manufacturing, construction, and O&M, with another 207,000 from transmission and distribution. Even if all energy-related apprentices are deployed to transmission and distribution, there would still be a labor shortage of 78,000 in the base case scenario by 2030. Recent comments from EPC contractors and utilities further confirm that labor tightness is intensifying. At its Q1 2026 earnings call, NextEra explicitly stated that labor is the single biggest constraint on new gas-fired generation construction: on one hand, the number of EPC contractors has declined from 9-11 decades ago to only 4 now; on the other hand, competition for skilled workers (pipefitters, welders, etc.) from LNG terminals, data centers, and other large infrastructure projects is increasingly fierce. Both Argan and Primoris highlighted labor as a priority; Argan focused on the availability of CCGT project managers, while Primoris focused on line workers in power transmission services. Quanta Services warned in its FY2025 earnings call about worker shortages at data centers and expected transmission line workers to become even tighter in the second half of 2026. During site visits to renewable energy developers in Spain, Acciona pointed out that labor competition in the US is intense and it is difficult to recruit effective talent; sometimes bringing in skilled labor from abroad is more effective than local recruitment. X-ELIO noted that changes in immigration policy could drive up construction/EPC costs. The report also mentions that although vocational school enrollment has grown by 400% in some areas, it takes about eight years to train a worker with five years of experience, so new labor supply cannot quickly alleviate bottlenecks. Goldman Sachs links this phenomenon to the broader 'demographic dilemma': a shrinking productive workforce must support an aging population, raising the risk of labor tightness in G7 countries and fueling investor discussions about whether industry execution capability and rising power, equipment, and labor costs will constrain growth. Based on these data points, Goldman Sachs maintains a constructive view on the renewable energy theme, believing that the steady growth of renewable capacity benefits relevant companies: Buy-rated NXT (Nextpower), XEL (Xcel Energy), and FSLR (First Solar), as well as unranked but highly exposed to renewable energy NEE (NextEra Energy). Furthermore, given that signs of labor tightness are accelerating, Goldman Sachs believes EPC firms with scalable labor acquisition capabilities will benefit, thus specifically emphasizing the Buy-rated PWR (Quanta Services).

Analysis framework

The report adopts a thought process of 'data tracking + pipeline structure analysis + constraint factor judgment'. Step one is tracking monthly EIA generation capacity data, comparing net new capacity by technology route against Goldman Sachs' full-year forecast, using 'progress percentage' to determine if each technology route is advancing as expected. Step two is dissecting the project pipeline, statistically summarizing total pipeline size, delays, cancellations/postponements, and development stage composition by four technologies: solar, wind, natural gas, and storage. It focuses on the indicator 'percentage of current pipeline corresponding to future annual forecasts' to assess the visibility and concentration of future supply. Step three identifies supply-side bottlenecks: the report argues that matching power infrastructure to AI/data center demand depends not just on the quantity of project planning, but on the availability of 'people/items' like labor and equipment. Therefore, it cross-verifies the trend of labor tightness using multiple pieces of evidence such as corporate earnings call statements, industry surveys, and field research. Finally, the report maps data changes and constraints to specific companies to form judgments on beneficial targets.

Methodology notes

• Industry/Industrial Analysis FrameworkSupply-demand framework

  Compare the growth of US power demand (driven especially by AI/data centers) with the new supply of generation capacity within the same framework to identify supply/demand gaps.

  The core logic of the report is: the demand side has strong growth expectations driven by AI and data centers, while the supply side is constrained by capacity construction and labor bottlenecks; by tracking capacity pipeline progress, it judges whether supply can keep up with demand, thereby identifying beneficiary companies.

• Company Fundamentals and Financial FrameworkOperating/Financial Leverage Analysis

  Labor shortages impact different types of companies asymmetrically: EPC contractors and top-tier utilities with scalable labor acquisition capabilities may actually benefit.

  The report argues that when the entire industry faces a shortage of skilled labor, larger companies with training systems and talent reserves can better guarantee project delivery, forming a relative competitive advantage; this is a manifestation of operating leverage under constraints.

• Industry/Industrial Analysis FrameworkS-Curve of Penetration

  The renewable energy (solar, storage) capacity pipeline shows a decline during 2028-2030, possibly reflecting uncertainty caused by the phasing out of policy incentives.

  The report uses changes in the distribution of project pipelines across different years to judge the pace of technological progress and policy advancement; the expiration of policy incentives (tax credits) may change marginal incentives for project development, reducing the long-term project pipeline, which relates to the characteristics of the end of the policy-driven phase in the penetration S-curve.

• Cycle and Prosperity FrameworkProsperity Turning Point Analysis

  Identify whether the construction prosperity of each technology route has turned a corner by comparing month-over-month and year-over-month changes and progress percentages in monthly capacity addition data.

  The report repeatedly compares current month data with previous month and same period last year's data (e.g., solar pipeline dropped from 85% to 75%; natural gas 2028 dropped from 116% to 99%) to judge the direction and reasons for prosperity changes in each technology route.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Nextpower (NXT)

  Buy rating, benefiting from the theme of robust renewable capacity growth

  Strengths

  Included by Goldman Sachs as a Buy target for the renewable energy theme; on Goldman Sachs' Watchlist (CL)

  Comparison

  Shares the status of being a renewable energy beneficiary favored by Goldman Sachs alongside XEL and FSLR

• Xcel Energy (XEL)

  Buy rating, benefiting from robust renewable capacity growth

  Strengths

  As a utility company, holds renewable energy exposure

  Comparison

  Shares the status of being a renewable energy beneficiary favored by Goldman Sachs alongside NXT and FSLR

  Risks

  Negative rate case outcomes, litigation, failure to narrow the spread between earned ROE and authorized ROE, cost management

• First Solar (FSLR)

  Buy rating, benefiting from a robust solar capacity pipeline

  Strengths

  12-month target price of $310, based on a 12x PE on Q5-Q8 EPS plus approx. $15/share net cash

  Comparison

  Shares the status of being a renewable energy beneficiary favored by Goldman Sachs alongside NXT and XEL

  Risks

  Module oversupply, module costs higher than expected, trade policies, changes in US Manufacturing Tax Credit

• NextEra Energy (NEE)

  Unrated, but Goldman Sachs believes it should be a beneficiary of the renewable energy theme due to high renewable exposure

  Strengths

  High renewable exposure

• Quanta Services (PWR)

  Buy rating, benefiting from scalable labor acquisition capabilities amidst labor tightness

  Strengths

  12-month target price of $826, based on 32x NTM EV/EBITDA; possesses labor scale and acquisition capability

  Comparison

  Compared to other EPC companies, Goldman Sachs believes its labor acquisition scale advantage is more prominent

  Risks

  Decline in project volumes leading to slower sector revenue CAGR, delivery delays due to supply chain challenges, slowdown in margin expansion due to cost inflation or other operational challenges

Key data

• Net New Generation Capacity in June5.7 GWFar higher than the 3.9GW of the same period last year; highest for June in the past ten years; mainly from battery storage (2.7GW) and solar (2.6GW)
• Cumulative Capacity Added Through June as % of Full-Year Forecast42%Higher than the average of 39% for this period since 2020
• Wind YTD Progress74%Highest progress among all technology routes
• Storage YTD Progress63%Advancing relatively quickly
• Solar YTD Progress34%Relatively slow, but pipeline is sufficient
• Coal YTD Retirements1.7 GWRepresents 46% of the full-year retirement forecast of 3.7GW; no additional retirements this month
• Solar 2027 Pipeline Correspondence to Forecast109%Higher than 102% in May; pipeline remains robust
• Natural Gas 2030 Pipeline Correspondence to Forecast155%Lower than 232% in May; main reason is Goldman Sachs raised natural gas supply forecast
• Additional Power Workers Needed by 2030Over 500,000Approximately 300,000 from manufacturing/construction/O&M; approx. 207,000 from transmission/distribution
• Transmission/Distribution Base Case Labor Gap78,000 workersEven if all energy apprentices are deployed to transmission/distribution, a gap remains by 2030
• Change in Number of EPC ContractorsDecreased from 9-11 to only 4One of the constraints on gas-fired plant construction identified by NextEra management

Impact & implications

The report argues that the continuous and robust growth of renewable capacity strengthens the constructive view on relevant thematic companies. Battery storage and solar were the main sources of additions in June, and project pipelines remain sufficient, supporting Goldman Sachs' Buy ratings for NXT, XEL, and FSLR, as well as the judgment that NEE is a beneficiary due to its high renewable exposure. At the same time, accelerating signs of labor shortages mean that project execution risks in the power value chain are rising. However, the report emphasizes that this constraint is structural rather than balanced: larger EPC contractors and utilities with labor acquisition and training systems are more capable of digesting bottlenecks, so Goldman Sachs is particularly optimistic about PWR, which possesses scale advantages. From a broader macro perspective, labor tightness may drive up power, equipment, and labor costs, affecting investment rhythms in power infrastructure and the speed of AI deployment. Goldman Sachs GS SUSTAIN team believes this will accelerate the deployment of grid optimization, automation, and labor efficiency solutions, potentially further benefiting existing contractors and utilities that already possess labor competitive advantages.

Risks

• Shortage of skilled labor may significantly hinder project execution in the power value chain
• Risk of solar module oversupply and cost increases (FSLR)
• Changes in trade policies and US Manufacturing Tax Credits may affect renewable project economics
• Decline in the long-term renewable pipeline reflects uncertainty regarding the expiration of tax credit policies
• Natural gas project pipelines concentrated in 2028-2030 may be affected by adjustments in supply forecasts
• XEL faces regulatory risks such as negative rate case results and failure to narrow the ROE spread
• PWR faces execution risks such as declining project volumes, supply chain delays, and cost inflation

What to watch

• Trend of subsequent monthly EIA net new capacity data (whether growth at the 5.7GW level is maintained)
• Whether Solar 2026 YTD progress (currently only 34%) can accelerate in the second half of the year
• Actual conversion rates of natural gas project pipelines for 2028 and 2030
• Whether the decline in renewable pipelines for 2028-2030 continues (policy uncertainty)
• Severity of labor shortages for transmission line workers in the second half of 2026 (as warned by Quanta)
• Changes in the number of EPC contractors and capacity for labor training
• Potential constraints on industry growth due to rising power, equipment, and labor costs