Installation of new wind energy projects in the U.S. will significantly increase between 2018 and 2020, before annual installation volumes decline as the production tax credit (PTC) phase-out begins, according to MAKE Consulting.
Wind energy developers in the U.S. are set to take advantage of the final stretch of the production tax credit (PTC), installing more than 30GW of new capacity over the next three years, MAKE states.
Following this boom, annual wind installation volumes will begin to decline as the production tax credit (PTC) phase-out begins, though projects built in 2021 with access to the 80% PTC will remain cost-competitive with solar PV and gas capacity in several states.
Looking at offshore wind, three state-level competitive solicitations for offshore wind capacity have now concluded successfully, awarding offtake contracts and financial support to approximately 1.8GW of offshore wind projects in federal waters off the coasts of four states, the consultancy writes.
In all, the forecast assumes more than 5GW of new offshore wind capacity will be operational by the end of 2027, but this will require inter-state and inter-developer coordination in the first half of the next decade before a domestic supply chain can develop to stabilise the sector’s volatility, according to MAKE.
Wind projects that started construction in 2015 and 2016 receive a full value PTC of 2.4 cents per kilowatt hour. For projects that began construction in 2017, the credit is at 80% of full value; for those that start(ed) this year, the credit is at 60%; and for those starting construction in 2019, the credit is at 40% PTC.