Recent analysis from BloombergNEF indicates that the momentum of clean energy deployment in the United States will likely remain strong, regardless of political shifts. The report suggests that even if former President Donald Trump, the current Republican candidate, were to successfully repeal the Inflation Reduction Act (IRA), it would only result in a modest slowdown of renewable energy growth.
Robust Growth in Clean Energy
This year, the U.S. is expected to see a remarkable 25% increase in clean energy deployment, reaching a record high of 65 gigawatts (GW). Despite challenges such as grid bottlenecks and permitting issues, BloombergNEF’s latest 2H 2024 US Clean Energy Market Outlook report reveals a promising future for renewable energy. The consultancy anticipates over 1,100 GW of clean energy capacity by 2035, up from the current cumulative capacity of 342 GW.
Impacts of the Inflation Reduction Act
The IRA has significantly impacted the renewable energy landscape, with biannual investments in wind and solar reaching nearly $50 billion—an impressive 63% increase compared to the period from 2019 to 2022. This law has spurred growth through tax incentives, becoming a key element of President Biden’s climate strategy, which Vice President Kamala Harris is expected to continue.
While Trump has pledged to repeal the IRA, BloombergNEF suggests that even in a worst-case scenario, where tax credits are entirely eliminated, cumulative renewable energy deployment would only be reduced by 17% by 2035. This projection translates to approximately 927 GW of installed capacity.
Analysis of Future Scenarios
The consultancy’s findings indicate that the ‘base case’ scenario, assuming the continuation of IRA tax incentives, would likely result in an annual average installation of 102 GW over the next decade. This would significantly outpace the previous average of 26 GW, illustrating the strong foundations supporting clean energy economics in the U.S.
BNEF analyst Atin Jain emphasized that the findings signal a resilient clean energy sector. “Even a worst-case outcome is not really going to bring a total halt to the momentum that is behind the sector,” Jain stated.
Variability Across Energy Sources
In a worst-case scenario, different renewable segments would be affected to varying degrees. Offshore wind would bear the brunt, with expected capacity falling short of projections by 45%, from 39 GW to only 21 GW by 2035. Onshore wind installations would also decline, reaching around 109 GW—32% below the base case estimate of 160 GW.
In contrast, solar energy is projected to continue thriving, even without tax incentives. BNEF estimates that cumulative solar capacity would only decline by 13%, from 755 GW to 656.5 GW in the worst-case scenario. While commercial and residential sectors may face more significant challenges, utility-scale solar installations, which account for two-thirds of total solar capacity, are expected to experience only an 11% reduction.
Economic Fundamentals Remain Strong
Despite uncertainties related to the upcoming election, the overall economic fundamentals for the clean energy sector appear robust. Major utilities are planning to procure at least 272 GW of clean energy by 2035, comprising 210 GW of solar, 62 GW of onshore wind, and 53 GW of battery electric storage.
Jain noted, “There’s actually a genuine interest in clean energy technologies from corporates and utility off-takers,” highlighting the persistent demand signal for developers in the sector.
