By Mark Jaffe, EUCI energy writer
U.S. installations in the first quarter of 2025 more than doubled year-over-year with 2.1 gigawatts (GW) of capacity coming online, but tariffs and shifting federal regulations led to a sharp drop in wind turbine orders, according to the U.S. Wind Energy Monitor.
The report – a collaboration of consultant Wood Mackenzie and the American Clean Power Association (ACP) – found that onshore installations accounted for all the capacity additions in the quarter.
For 2025, Wood Mackenzie is forecasting that a total of 8.1 GW, including onshore, offshore, and repowering existing installations, will come online, but warned of a slowdown.
“The U.S. wind market faces significant headwinds, with permitting challenges, tariff hikes, and now a phaseout of tax credits,” the report said.
This has already led to a 50% decrease in turbine orders compared to the same period last year, taking them to their lowest level since 2020.
President Donald Trump has been critical of renewable energy, particularly wind power. On July 31, the administration cancelled plans to allow the development of offshore wind on 3.5 million acres of federal water.
On July 4, Trump signed into law the One Big Beautiful Bill Act, which sharply curtailed the use of the key federal tax credit used by wind developers and sunset the credits in 2027, with four years to complete a project based on phaseout precedent.
The exact terms of the phaseout are under review by the federal Internal Revenue Service.
“Market volatility will prompt a short-term decrease in onshore additions,” Leila Garcia da Fonseca, director of research at Wood Mackenzie, said in a statement.
Wood Mackenzie’s expects a 3% reduction in its five-year forecast across onshore and offshore, equal to 1.2 GW less capacity compared to the previous outlook.
This, Garcia da Fonseca said, “reflects growing uncertainty for currently under-development projects, mainly driven by ongoing permitting challenges, tariff risk, and now a sunset of tax credits.”
A spike in capacity additions is expected in 2029 and 2030 as developers try to capitalize on the tax credits before they expire. That will be followed by a sharp drop, when the tax credits fully sunset.
“This underscores the critical role of policy support for continued wind deployment,” Garcia da Fonseca said.
Annual installations will average 8.9 GW over the next five years across onshore, offshore, and repowering segments, according to Wood Mackenzie. By the end of 2029, a total of 44 GW of wind power capacity is slated to be installed
Western states, which will add 9.4 GW of installations through 2029, will see more activity than other regions.
The combination of expiring tax credits and tariffs will, however, make projects more expensive.
Wood Mackenzie modeling calculated the change on a levelized cost of energy basis, which takes all the costs of building and operating an installation over the course of its life and divides them by all the energy it produces to get a megawatt-hour cost or LCOE.
The loss of the tax credits increased the LCOE by 25%, and the tariffs could add another 10%.
“Regulatory obstructions will drive up costs, putting at risk the nation’s ability to meet its energy demands with homegrown clean power,” John Hensley, ACP Senior Vice President of Markets and Policy Analysis, said in a statement.
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