President Trump is poised to preside over a renewable energy boom. Yes, really.
The administration and its allies in Congress have rolled back clean energy tax credits and thrown up roadblocks to renewable energy projects — efforts that, in the long run, will mean fewer wind and solar farms will be built than otherwise would have.
But any meaningful slowdown in the growth of renewable energy and battery storage in the United States is likely to take a few years. That is because companies are racing to install solar panels, wind turbines and batteries the size of shipping containers before federal tax credits expire or become harder to claim.
The pipeline is so big that analysts widely expect the United States to add record — or near-record — amounts of renewable energy and batteries through 2027. BloombergNEF, a research firm, recently raised its forecast for how much wind, solar and batteries the country would add next year by more than 10 percent.
“There’s this huge hurry-up that is taking place,” said Thomas Byrne, chief executive of New York-based CleanCapital, which develops, owns and operates solar and battery storage projects.
Wind and solar projects must be under construction by July to be eligible for federal tax credits that Congress voted this summer to eliminate, years earlier than previously required. (Battery installations have longer to get started.)
To hit that deadline, many developers have ordered custom power transformers — devices used to increase or decrease voltage — solar panels and other equipment much sooner than they normally would have. Placing such orders is one way to demonstrate to the Internal Revenue Service that a project is underway.
Only relatively big companies can afford to spend such huge sums upfront, and analysts expect them to start buying smaller projects whose backers are strapped for cash.
To ensure its projects would still qualify for credits, CleanCapital this summer bought about $25 million worth of solar panels it does not yet need. The company plans to store the panels in a warehouse it is renting in San Bernardino, Calif., for $145,000 a month.
“This rush is real,” Jennifer Granholm, the energy secretary for President Joseph R. Biden Jr., told reporters recently in New York. “You’ll see an uptick in the next two years, and then you’ll see a diminishment after that, unless something changes.”
That so much renewable energy is poised to be built despite federal opposition reflects just how much momentum the sector has — not just because of subsidies, but because there is tremendous demand for new sources of energy. Solar and batteries can be installed much faster than natural gas and nuclear power plants. Solar and batteries have also become cheaper, while the cost of building gas power plants has soared.
This year, renewable energy and batteries will make up around 93 percent of the capacity added to U.S. grids, according to the federal Energy Information Administration.
“We have never seen this kind of demand, ever,” said Sandhya Ganapathy, chief executive of EDP Renewables North America, a leading energy developer. For that reason, the company’s development plan looks much as it did before Congress rolled back the tax credits, she said.
That said, the Trump administration’s efforts to stymie renewable energy will take a toll. Beyond tax credits, there are federal permits, which Mr. Trump has said his administration will not approve for wind or “farmer destroying Solar.”
The Paris-based International Energy Agency recently almost halved its expectations for how much solar and wind energy capacity the United States will add over the next five years. The bulk of that effect will be felt beginning in 2028, the last full year of Mr. Trump’s presidency.
Between permits and the time it takes to connect to the grid, companies can pull forward only so many projects. Already, some smaller solar firms are laying off staff or preparing to shut down.
Some developers are focusing on building batteries that charge when electricity is cheap and plentiful and release it when energy demand soars. Such batteries are in high demand to help balance the wind and solar projects built in recent years.
Meantime, offshore wind has become all but untouchable, largely because of the administration’s attacks on the industry.
“This is the death knell of offshore wind,” said David Giroux, chief investment officer for T. Rowe Price Investment Management. “Any time you increase uncertainty around the ultimate return on an investment, you either have to get a higher return to compensate you for that risk, or more likely you just won’t take that risk in the first place.”
Ultimately, the loss of renewable energy tax credits is likely to raise energy bills, because it can take years to build alternatives like gas or nuclear power plants. Existing gas plants are also likely to be used more.
“There’s not going to be as much supply as expected,” Mr. Byrne of CleanCapital said. “Necessarily, prices will go up.”
