Wind and solar power in the U.S. are heading in opposite directions. Based our forecasts at Orennia, 37 gigawatts of utility-scale solar power and 7 gigawatts of wind power are expected be added this year. This is on top of ~6 gigawatts of distributed solar estimated by the US Energy Information Administration.
Wind energy, once the frontrunner of renewable power, is now facing slower growth. Several factors contribute to this slowdown, including parts shortages, longer interconnection queue times and increased local opposition.
- Part shortages: A lack of made-in-America wind turbine parts has led to a country-wide supply shortage. The issues are expected to impact both onshore and offshore wind development, with the New York regulating estimating the shortage will cause higher offshore wind prices for the rest of the decade.
- Longer interconnection times: Wind projects are taking longer than solar or storage projects to move through the interconnection queue. With wind farms taking comparatively longer to build, in total it amounts to longer periods between request data to commercial operations.
- Increased local opposition: Wind farms are about as popular as ankle socks in 2024. In a study by the National Academy of Sciences, one in five wind farm projects faced opposition from locals, particularly by wealthier communities.
Solar energy, by contrast, is growing rapidly. Driven by a glut of cheap solar panels and favorable tax credits, there has been a rise of utility-scale projects.
- Solar panel glut: The International Energy Agency estimates global solar manufacturing tripled between 2021 and 2023, driven by China. As a result, panel prices fell 50% in 2023 and continue to fall in 2024.
- Tax incentives: The Inflation Reduction Act enacted both investment tax credits (for credit on upfront capital costs) and production tax credits (for electricity generated). While projects can select just one, the pair have been key in the US expansion of solar power.
The two renewables continue to head in different directions. While the amount of solar power added annually in the US has increased since 2020, wind has shrunk each year.
Aaron Foyer is Vice President, Research and Analytics at Orennia. Prior to Orennia, he leveraged his technical background in management consulting and finance roles. He has experience across the energy landscape including clean hydrogen, renewables, biofuels, oil and gas, petrochemicals and carbon capture.
