The incoming US Republican administration is expected to scale back support for offshore wind development by restricting permitting resources and limiting new lease offerings, according to analysis by Wood Mackenzie. Despite these anticipated changes, the country's 10-year offshore wind outlook remains relatively stable, with nearly 25 gigawatts (GW) of projects already permitted or nearing approval.
Wood Mackenzie highlighted project economics as the more significant risk to the sector. Research analyst Stephen Maldonado warned that delays in issuing guidance for domestic content bonus credits or reductions to the 45X advanced manufacturing tax credit could hinder investment in a domestic supply chain. While the base case projects 27 GW of cumulative offshore wind capacity by 2033, these constraints could reduce that forecast by up to 30%.
The report also notes potential challenges for onshore wind and solar energy. A second Trump administration could bring efforts to roll back key provisions of the Inflation Reduction Act (IRA), which has been instrumental in driving renewable energy investment. Stricter trade policies, lighter emissions standards, and a possible withdrawal from the Paris Agreement could further slow the energy transition.
Despite these risks, Wood Mackenzie's analysis underscores bipartisan support for the IRA and continued private sector commitment to net-zero goals. David Brown, director of energy transition services at Wood Mackenzie, remarked that the IRA has facilitated over $220 billion in manufacturing investment, much of it concentrated in Republican-led states, reducing the likelihood of a full repeal.
“Renewables investment could slow, but capacity is set to grow by 243 GW from 2024 to 2030, even in our delayed transition scenario,” Brown noted. He also highlighted the potential for Republican-backed permitting reforms to accelerate data center growth, which is closely tied to renewable energy demand.
Solar energy remains a robust segment, with nearly 100 GW of contracted utility-scale projects and strong demand for distributed solar. Michelle Davis, global head of solar at Wood Mackenzie, noted that interconnection and transmission bottlenecks may lead to flat installation growth in the short term, but annual growth is expected to average 5% from 2028 to 2031.
While renewable energy progress in the US may slow under a Republican administration, the combination of market-driven demand, private sector initiatives, and existing policy mechanisms ensures continued growth, albeit at a potentially moderated pace.
