Key US clean energy charts that track Trump's tax bill impact: Maguire

Reuters

28-05-2025

LITTLETON, Colorado, May 28 (Reuters) - U.S. President Donald Trump's sweeping tax and spending bill calls for drastic cuts to clean energy tax credits that have been major drivers of the boom seen in utility-scale renewable power and battery capacity over the past three years or so.
The bill was passed by the U.S. House of Representatives by a narrow margin last week, but must now get approval from the U.S. Senate before becoming law.
Several influential senators have raised objections to certain elements of the bill - especially proposed cuts to health care benefits - which suggests changes to the final package can be expected.
But among Republican lawmakers there remains broad support for gutting Biden-era clean energy incentives, which remain at risk of a full repeal by the Republican-majority Congress.
Below are some key projections on U.S. energy generation capacity, investments, fuel use and emissions if the current clean energy incentives are repealed under the new tax law.
A full repeal of the Biden-era clean energy incentives would drastically reshape the country's electricity generation infrastructure landscape over the coming decade.
According to the REPEAT Project - which analyses the impact of federal policies on the energy sector - total cumulative electricity generation capacity growth could fall by half between now and 2035 if current incentives are scrapped.
Under the existing incentive and tax credit system, the REPEAT Project estimates that total electricity generation capacity would climb by an average of around 100 gigawatts (GW) per year from now through 2035.
Existing incentives are on track to boost generation capacity from solar systems by around 46 GW/year, wind capacity by around 18 GW/year, natural gas capacity by around 14 GW/year, and battery storage capacity by around 16 GW/year.
If all of the current clean energy tax credits are repealed, the pace of capacity additions would fall to around 48 GW/year, due mainly to steep declines in renewable energy and battery storage capacity construction.
Under a full repeal scenario - where all existing clean energy incentives are phased out as quickly as possible - the average capacity growth of utility-scale solar systems would slow to around 19 GW/year - or less than half the current pace.
Wind generation and battery storage capacity growth would also fall by roughly half, while natural gas generation capacity would drop by around 16% to around 12 GW/year.
With lower tax breaks and incentives leading to a slower build-out of electricity generation capacity, the growth in total electricity supplies is also projected to slow under a full repeal scenario.
Under the current incentive structure, the resulting expansion in electricity generation capacity would accommodate a roughly 30% increase in total U.S. electricity consumption by around 2035, to around 5,275 billion kilowatt hours by 2035.
However, if the current incentives are repealed the resulting slower capacity expansion would limit electricity consumption growth to around 5,066 billion kilowatt hours by 2035, or 17% less than if the incentives remained in place.
That shortfall in electricity consumption would in turn have a ripple effect on overall economic growth, with tighter electricity supplies triggering higher energy costs for consumers.
The ditching of clean energy incentives would also alter the country's projected electricity generation mix.
Under the existing incentive system, the proportion of clean energy sources within total U.S. electricity generation would rise from around 40% now to over 70% by 2035, REPEAT data shows.
However, if the clean incentives are repealed, the clean power share would only rise to around 54% of the total mix by 2035, due to sharply slower clean power additions.
The dropped incentives would also have a major impact on fossil fuel consumption patterns, which are currently trending broadly lower but would rise again if the Biden-era clean energy policies are scrapped.
If current policies were maintained, U.S. use of thermal coal - the highest polluting fossil fuel - would drop by over 85% from current levels as other cleaner sources of power displaced coal plants.
However, a full repeal of clean incentives would extend the use of coal-fired power within the U.S. energy system, and result in only a 14% decline in coal use volumes from current levels by 2035.
Natural gas use by U.S. electricity producers would expand sharply if current clean power incentives are scrapped.
REPEAT Project data shows that total natural gas demand could climb by nearly 30% from current levels by 2035 if clean incentives are scrapped, which compares to around an 18% rise in projected gas use if current clean incentives are maintained.
U.S. greenhouse gas emissions are currently on track to decline by 28% by 2035, assuming current clean energy incentives remain in place.
If those policies are repealed, however, greenhouse gas emissions would decline by only 8% by 2035, due to the resulting increased reliance on fossil fuels for power.
Lower clean power incentives would in turn trigger changes to investments in the U.S. energy system, potentially wiping out billions of dollars of projected capital allocations.
Lower investments in the U.S. transmission system would also trigger higher average energy costs for consumers, with annual household expenditure on energy set to climb by over $400 a year by 2035 if current policies are cut, according to REPEAT.
The opinions expressed here are those of the author, a columnist for Reuters.