The outlook for the U.S. wind energy market has taken a significant hit, with energy research firm Wood Mackenzie cutting its forecast for new installations over the next five years by 40 percent.
Wood Mackenzie, in its report, projects 45.1 gigawatts of wind capacity — both onshore and offshore — will be added through 2029, down from an earlier forecast of 75.8 GW. This sharp revision reflects growing challenges for the sector, including unfavorable federal policy shifts and economic uncertainty.
Wind energy, which once enjoyed strong federal backing, has recently come under pressure, particularly after former President Donald Trump issued an executive order in January pausing new federal wind leasing and permitting, Reuters news report said.
Donald Trump has criticized wind turbines as being unsightly, expensive, and environmentally harmful, a stark contrast to the previous administration’s view of wind power as a key component of climate policy and grid decarbonization.
Even before the policy shift, the U.S. wind market was already losing momentum. In 2023, only 5.2 GW of wind capacity was installed, down from 7 GW the year before and far below the nearly double-digit gigawatts installed in 2021 and 2022. Those earlier surges had been fueled by a rush to take advantage of a federal tax credit for clean energy that was set to expire before it was extended under the Inflation Reduction Act in August 2022.
Although the tax credit’s extension was expected to provide long-term support, the latest developments have introduced fresh uncertainty. The economic environment — marked by inflationary pressures, higher financing costs, and logistical challenges — has further constrained new project development.
Despite these headwinds, demand for electricity continues to grow, particularly driven by the expansion of AI-focused data centers. The U.S. Energy Information Administration recently projected record power consumption in 2025 and 2026, with a nearly 3 percent jump expected this year alone compared to the previous record in 2024.
This rising demand offers a potential upside for renewables, but industry experts remain cautious. According to Wood Mackenzie, although a market rebound is possible, persistent policy ambiguity and economic stress are likely to hold back wind energy growth in the near term compared to previous expectations.
GreentechLead.com News Desk