The US will need to add at least 70GW of wind and solar a year from 2025 to meet President Joe Biden’s aim to decarbonise the power sector by 2035, according to new research by BloombergNEF (BNEF).
BNEF said it currently projects an average of 43GW installed each year from 2025, leaving a “significant gap” between its outlook and the administration’s ambitions.
BNEF lead US solar analyst Tara Narayanan said: “Even without details from the American Jobs Plan, wind and solar capacity additions will steadily grow over the decade, adding 287GW of solar and 115GW of wind.
“Solar in particular will see record growth in the next four years, adding over 25GW each year across all sectors.
“However, more renewables will likely be needed to come close to the government’s target of zero emissions by 2035.”
BNEF said in its ‘1H 2021 US Renewable Energy Market Outlook’ report that the US ended 2020 with record wind and solar additions, beating previous highs in all sectors.
The next 10 years will see the US wind and solar fleet almost triple, even as the pace of cost declines slows.
But this will still not be enough to hit the Biden administration’s stated goal of decarbonising the power sector by 2035.
Tax credits for both wind and solar will allow large-scale projects commissioning by the end of 2025 to offer lower costs to end users than those in the second half of the decade.
The researchers said the US is about to see five years of record large-scale solar capacity additions, adding over 20GW each year.
Both large- and small-scale solar will grow during the years of tax credit extensions.
Over the coming decade customer-sited solar capacity maintains its pace, adding on average over 8GW a year.
Over a third of all new systems are built in California, with storage becoming more relevant for project economics as net metering is phased out.
Onshore wind is set for another big year of build after a record beating 2020.
But installation will fall from 2022 as tax credits continue to be reduced.
After tax credits are removed in 2026, build dips as projects rely only on the merchant market, BNEF said.
However, offshore wind looks set to be the big winner of the Biden presidency.
“The administration seems committed to resolving longstanding permitting bottlenecks and the sector will enjoy a new dedicated tax credit,” BNEF said.