Investment in the U.S. onshore wind industry remains under pressure despite the passage of the Inflation Reduction Act (IRA), an analyst from Rystad Energy said on Wednesday. Geoffrey Hebertson, lead renewables analyst, highlighted that while the IRA of 2022 offers production and investment tax credits over the next decade, challenges in sustaining investment persist due to various cost pressures.
“We do expect 2024 to be a historically low year for wind, and we do not see over the next few years any implications going forward for that to change,” Hebertson told attendees at an energy conference hosted by the Federal Reserve Banks of Dallas and Kansas City.
The United States currently has an installed wind generation capacity of around 152 gigawatts (GW), according to data from the U.S. Energy Information Administration. However, recent supply chain shortages, rising labor costs, and extended development timelines have contributed to slowing the pace of new wind farm projects, Hebertson noted.
Adding to this, Erik Haug, vice president of energy marketing at Apex Clean Energy, cited increasing project costs, saying that a 300-megawatt wind farm that would have cost $400 million now requires between $600 million and $670 million to develop.
The IRA, aimed at incentivizing clean energy production and reducing emissions, faces obstacles in its impact on the onshore wind industry as escalating costs challenge the pace of sector growth, according to experts at the conference.
