trending Market Intelligence /marketintelligence/en/news-insights/trending/tov10ppyldzdvyxgn1cjag2 content
Log in to other products

Login to Market Intelligence Platform

 /


Looking for more?

Contact Us

Request a Demo

You're one step closer to unlocking our suite of comprehensive and robust tools.

Fill out the form so we can connect you to the right person.

If your company has a current subscription with S&P Global Market Intelligence, you can register as a new user for access to the platform(s) covered by your license at Market Intelligence platform or S&P Capital IQ.

  • First Name*
  • Last Name*
  • Business Email *
  • Phone *
  • Company Name *
  • City *
  • We generated a verification code for you

  • Enter verification Code here*

* Required

Thank you for your interest in S&P Global Market Intelligence! We noticed you've identified yourself as a student. Through existing partnerships with academic institutions around the globe, it's likely you already have access to our resources. Please contact your professors, library, or administrative staff to receive your student login.

At this time we are unable to offer free trials or product demonstrations directly to students. If you discover that our solutions are not available to you, we encourage you to advocate at your university for a best-in-class learning experience that will help you long after you've completed your degree. We apologize for any inconvenience this may cause.

In This List

US wind industry to see sharp drop in 2021 as PTC era ends, analysts say

As COVID-19 Wears On, Regulators Examine Moratorium Extensions, Cost Recovery

Essential Energy Insights - June 11, 2020

Webinar Replay

Deep Dive on Oil & Gas for Financial Institutions

Essential Energy Insights - May 28, 2020


US wind industry to see sharp drop in 2021 as PTC era ends, analysts say

Wind installations in the U.S. will likely fall by half in 2021 as the production tax credit winds down, analysts said at the American Wind Energy Association's annual conference in Chicago.

IHS Markit Associate Director Maxwell Cohen said the wind build-out will remain relatively strong through 2021, but that the U.S. sector could see a "valley of death" as installations drop off significantly after that time. Annual wind installations will likely peak in 2020 at about 10,000 MW before dropping to the 2,000 MW to 3,000 MW range in 2023, he said, citing figures from IHS Markit's fall 2017 forecast. An updated forecast is expected in the the coming days with slightly lower numbers that reflect President Donald Trump's solar tariffs, tax reform and other factors, he said.

"We hope it won't be the case, but it is based on both the economics and the tax credits going away," he told audience members during a May 8 panel.

The declining installations will likely phase in as the production tax credit continues its glide path to expiration. Wind facilities that commenced construction, or met a financial safe harbor by 2016, were eligible for a tax credit of $23 per MWh over the first ten year's of a project's life. That credit steps down by 20% for 2017-vintage projects, 40% for 2018-vintage projects and 60% for 2019 vintage projects. Projects that start in 2020 would not be eligible for any tax credits.

For life after the PTC expires the industry will need to look at how to bridge the gap the expired subsidy leaves in the market, Cohen said.

SNL Image

MAKE Consulting showed a similar story, with a forecast that the U.S. will add 32,300 MW of wind capacity between 2018 and 2020. The end of PTC and safe harbored projects will cause installations drop by 50% in 2021 to 6,700 MW and further to 2,620 MW, said Dan Shreve, a partner at MAKE Consulting.

David Hostert, an analyst from Bloomberg New Energy Finance, forecast that gross additions, including both new installations and repowering, will reach 30,000 MW by 2020 and 50,000 MW by 2025. The forecast shows gross annual additions peaking in 2020 at 11,400 MW before dropping to the 3,000 MW to 5,000 MW range through 2025.

SNL Image

Corporations' clean energy appetite is staying strong, with wind projects making up 1,800 MW of the 2,500 MW in corporate purchase power agreements, Hostert said. "I was skeptical of this, but this has kept up," he said, adding that corporate customers are trending toward virtual PPA's.

Navigant Consulting's projections show that U.S. adding 8,000 MW to 10,000 MW annually through 2020, largely driven by PTC, said Bruce Hamilton, the director of Navigant's energy practice. While the drop in wind installations is big, the PTC created "artificial acceleration" for wind projects, causing a big rush to install farms and inevitable fall-off, he said. In the post-PTC era, opportunities to replace retiring coal plants will become crucial for the wind sector.

"The real story is in coal retirements," Hamilton said. Navigant has changed its projection that 73,000 MW of coal-fired plants will be decommissioned, more than two times what the firm had previously projected. "The economics for coal have gotten worse," he said, adding that he expects to be huge swings in Navigant's forecasts in the coming years.