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Welcome back to Current Climate. Rising demands for power from data centers and the electrification of everything, exacerbated by the spike in crude oil prices arising from the war in Iran, have pushed up utility bills for months but also brought a surge in large-scale solar installation. In fact, solar jumped ahead of coal for the first time as a source of U.S. electricity generation in May.
During the month, utility-scale solar generated 12.8% of the country’s electricity, while coal-fired plants dropped to just 12.2%, near their lowest ever, according to data compiled by energy think tank Ember. It’s a remarkable change given that coal was about 20% of U.S. power generation in May 2021, while solar was only 5.4% at that time. Its share should widen further as new projects like New Mexico’s 3.7-gigawatt SunZia wind farm that opened last week, the country’s biggest, come online.
The solar boom is accelerating, despite Trump administration efforts to kill federal clean power incentives and pivot back to coal and carbon-based energy, because of the rapid growth in large battery energy storage systems that let utilities maintain steady supplies of renewable electricity. As a result, installations of solar and battery storage accounted for over 90% of all new power added to the U.S. grid in the first quarter of 2026, according to the Solar Energy Industries Association.
Nowhere is solar’s rise more apparent than in California. While solar topped coal nationally last month, in the Golden State, it’s overtaken natural gas, the top U.S. power source, so far this year, based on Energy Information Administration data.
“Solar electricity generation in the California Independent System Operator (CAISO) over the first five months of 2026 increased 21% compared with the same period in 2024, and natural gas generation decreased by 60%,” the EIA report said. “In CAISO, utility-scale solar generated more electricity than natural gas on a daily basis on 82% of days in the first five months of 2026, up from 21% in 2024 and 2025.”
That growth results in part from the fact that, despite abundant domestic natural gas supplies, there’s a multiyear waiting list for utilities to get new gas-fired turbines. Meanwhile, the cost and time required to install solar and battery systems keep dropping.
For decades, environmentalists have advocated for a clean energy transition to curb harmful carbon emissions. Economic benefits are now an even bigger motivator.
Panthalassa
Among big future businesses, Elon Musk is selling investors in newly public SpaceX is his plan to put data centers in space: solar-powered satellites, spread across a vast network, processing information in space and beaming it back to Earth. As pitches go, it has the clean geometry of a Musk bull case. It’s the kind of “I want to die on Mars, just not on impact” sci-fi idea the newly minted trillionaire is famous for. And it’s particularly well timed: the AI feeding frenzy is in overdrive, but the terrestrial data centers they require are becoming an unwanted menace in many communities, raising utility rates, creating noise and pollution, and generating few local economic benefits.
SpaceX hopes to begin launching orbital data centers in 2028, though its IPO filing gives no cost estimates for such a system. It does, however, include the kind of caveat that sits in a securities filing like a flare on the runway: The plan involves “significant technical complexity, unproven technologies, or technologies that do not exist or may require significant advancement, and such initiatives may not achieve commercial viability.”
SpaceX lawyers meant it as a warning. Musk could probably plaster it on the lobby wall.
But if the goal is simply to move data centers off land and run them at lower cost, there’s a far better option: the ocean. It’s far away from taxpayers, zoning fights and the sudden arrival of hyperscale neighbors. And it may be a climate-friendly source of power and a cheap way to cool massive data centers.
This is where Panthalassa wants to go. The Portland, Oregon startup, backed by Peter Thiel and a raft of Silicon Valley venture firms, has spent the past decade developing floating data centers that generate their own electricity from open-ocean waves and cool themselves with cold seawater. It expects commercial units to be operational in 2027, a year before SpaceX says it may begin putting compute satellites in orbit, with all those securities filing caveats.
General Motors
GM plans to sell sodium-ion batteries for energy storage and manganese-rich batteries for pickups and SUVs. Will the LFP batteries you make with LG in the U.S. end up in your electric vehicles?
We're manufacturing LFP cells at Ultium, which is a joint venture with LG. We're essentially a contract manufacturer. The output just goes to LG. We have nothing to do with where that is going to market. We're not putting that in systems. We're contract manufacturing that. The supply chain is defined by LG; that's their cell.
There are no plans today to put those into our vehicles.
LFP is the dominant battery used in Chinese EVs. Can the materials and components it needs be sourced in the U.S.?
The LFP supply chain is all out of China. There's no way you're going to compete with LFP if you're trying to source from North America. There are no good sources of cathode material or anode material for that matter. With sodium ion, we have a real advantage here because the U.S. has the greatest resource on earth for sodium. Sodium ion is available anywhere. You could get it in any country you want to make it in. So it's plentiful from the beginning, and we're working with suppliers right now on that cathode sourcing.
So the cathode – NFPP is the name of the cathode that we're using – right now it only comes from China. So we're sourcing it from China, but we're also working with the domestic supply base here. When I say domestic, in North America, we're working with multiple partners here. We're trying to help them. We're investing small dollar amounts. We're also doing joint development agreements to try and bring up the North American supply base.
When I say domestic, in North America, we're working with multiple partners here. We're trying to help them. We're investing small dollar amounts. We're also doing joint development agreements to try and bring up the North American supply base.
Some Chinese EV makers are putting sodium-ion batteries into EVs. You’re using that chemistry for energy storage, but could it ultimately end up in cars?
You're looking into our roadmap in a good way.
It gets back to the right chemistry for the right application. Sodium-ion is not the right chemistry for EVs today. The only time it really makes sense is for really low temperatures, like if you're driving a car in minus 40 degrees C. Sodium-ion would be good for that. But other than that, if the energy density is too low and the cost is too high, putting it into an EV makes no sense.
But it makes sense in an [energy storage] application because we're looking at that full system cost, the total cost of ownership. Now in EVs, one of the beauties of this is that sodium-ion could eventually be deployed in an EV application. It's going to take some development work.
So we're starting out with an [energy storage] application, but there is an opportunity in the future that this could be deployed in EVs.That's not the intention today, but it does have that opportunity.
The lithium manganese battery you announced is for heavier vehicles, like pickups and SUVs?
It's great for trucks and SUVs, those applications, because we've got a little bit more space than in small vehicles. The energy density is not as great as [lithium-ion], so we do need space in the vehicles. But if you compare it with LFP, we're at a similar price, but we're getting 30% to 35% greater energy density out of that. So it's a fabulous chemistry for the use that we have for it, SUVs and trucks.
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