US wind energy sector faces political and tariff headwinds in 2025

The US wind market recorded 91% growth in the first quarter of 2025, but new regulatory restrictions and the planned end of tax credits threaten the sector’s future.

Share:

The United States installed 2.1 gigawatts (GW) of wind capacity in the first quarter of 2025, marking a dramatic 91% increase over the same period last year. Wood Mackenzie and the American Clean Power Association project 8.1 GW of installations for the whole of 2025, including onshore, offshore and repowering projects. However, this apparent growth conceals major structural challenges that are redefining the US wind industry.

Turbine orders fell by 50% in the first half of 2025 compared to the previous year, reflecting growing concern among developers about the regulatory environment. On January 20, 2025, the Trump administration signed a presidential memorandum withdrawing all Outer Continental Shelf areas from wind leasing and ordered a temporary halt to all new permits for wind projects. This decision provoked an immediate response from 17 states and Washington D.C., which filed a lawsuit against these restrictions.

A regulatory revolution with major economic consequences
The One Big Beautiful Bill Act (OBBBA), enacted on July 4, 2025, fundamentally alters the landscape of tax incentives. Tax credits for wind and solar projects end for installations commissioned after 2027, with a limited exception for projects beginning construction within 12 months of enactment. For other technologies, tax credits remain on the original schedule: after 2032, they are gradually reduced to 100% in 2033, 75% in 2034, 50% in 2035 and reach 0% in 2036 (see OBBBA – One Big Beautiful Bill: Pros & Cons: The Good, Bad, and the Ugly). This accelerated phaseout schedule represents a sharp change from previous deadlines.

New bureaucratic requirements now require Secretary of the Interior Doug Burgum to personally approve each wind project on public lands. This administrative centralisation creates unprecedented bottlenecks in the permitting process. Developers must also navigate a maze of new restrictions regarding “foreign entities of concern” (FEOC), drastically limiting financing and component sourcing options.

The impact of tariffs on sector competitiveness
Proposed tariffs of 25% on imports from Mexico and Canada, and a further 10% on Chinese imports, threaten the economic viability of projects. Wood Mackenzie estimates these measures could increase onshore wind turbine costs by 7% and overall project costs by 5%. The levelised cost of energy (LCOE) could rise by 4% in the short term, reaching 7% in a universal tariff scenario.

The US wind industry relies heavily on imports for critical components such as blades, gearboxes and electrical systems. In 2023, wind equipment imports totalled $1.7bn, with 41% sourced from Mexico, Canada and China. This dependence exposes the sector to major vulnerabilities in the face of protectionist policies.

The reshaping of the competitive landscape
GE Vernova dominated the US onshore market with 56% of installations in 2024, followed by Vestas (40%) and Siemens Gamesa (4%). In the offshore segment, Siemens Gamesa held an even more dominant position with 57% of projects selecting a supplier, compared to 32% for Vestas and 11% for GE Vernova. This market concentration reflects growing barriers to entry in a more complex regulatory environment.

The sector’s five-year outlook has been revised down by 40% compared to earlier projections of 75.8 GW. Wood Mackenzie now forecasts 33 GW of new onshore capacity, 6.6 GW offshore and 5.5 GW of repowering by 2029. This drastic revision illustrates the combined impact of restrictive policies and economic uncertainty on investment decisions.

Technological opportunities amid political challenges
Despite this unfavourable context, some emerging technology segments retain potential. The global floating offshore wind market is expected to grow at a compound annual rate of 31.5% from 2025 to 2034. The US holds 2.8 terawatts of offshore wind potential in waters too deep for conventional technologies, representing two-thirds of the country’s total offshore potential.

Individual states are pursuing ambitious goals despite federal obstacles. New York aims for 9 GW of offshore wind by 2035, while New Jersey targets 11 GW by 2040. These local commitments are creating sustained demand that could partially offset the effects of restrictive federal policies.

The economic impact of these changes will be felt beyond the wind sector. Energy Innovation forecasts rising electricity bills across the United States, with particularly marked increases in Republican states that rely heavily on renewables for their power supply. Developers who secured power purchase agreements before the pandemic now face a fundamental mismatch between fixed revenues and rising costs.

The US wind sector stands at a critical juncture. Record installations in the first quarter of 2025 may represent a final surge before a prolonged slowdown. Developers are accelerating projects to take advantage of the last available tax credits, creating an artificial spike in activity that conceals long-term structural challenges. The industry’s ability to adapt to this new environment will determine whether the United States maintains its position in the global energy transition or yields technological leadership to other nations.

The renewable division of Energias de Portugal (EDP) reported a sharp decline in first-half net profit due to a marked reduction in gains from asset sales, while electricity production and revenue increased.
The US wind sector saw marked progress in the first quarter, but regulatory uncertainty slowed turbine orders, creating medium-term challenges for the industry.
VALEMO, the French energy maintenance company, will lead the remote supervision of the Yeu-Noirmoutier offshore wind farm, bringing its expertise to the ongoing management of marine electricity production infrastructure and equipment.
Opdenergy acquires thirteen new wind farms in Spain for a total capacity of 440 MW, strengthening its international presence and portfolio through a major asset transfer operation in the sector.
The Sonnenberg V project marks a new milestone with the signing of a cooperation agreement between ENERTRAG and EBERT for the renewal and expansion of a 235 MW wind farm in Saxony-Anhalt. —
OX2 acquires a 34-turbine wind project in the Dalarna region, representing 14% of the county’s electricity consumption, marking a step forward in its commercial collaborations with Eolus and Dala Vind.
Nordex Group records a significant jump in profitability and order intake, reaching EUR 2.3 bn in the second quarter of 2025, confirming its financial trajectory with a positive free cash flow.
German manufacturer ENERCON is investing up to €30 mn in expanding its Aurich site, with public financial backing to boost the ramp-up of its new turbines designed for the onshore wind market.
The Neart na Gaoithe offshore wind farm, with a capacity of 450 megawatts, comes online off the coast of Scotland, mobilising GBP200 mn ($259 mn) in public and private investment for the region.
The British government is increasing by 11% the guaranteed price for offshore wind electricity to support projects facing inflation and supply chain constraints.
DP Energy plans to build a 1,400 MW wind farm near Julia Creek, supported by an energy storage system, enhancing industrial momentum and supply prospects in northern Queensland.
Equinor announces a significant impairment on its offshore wind project Empire Wind, due to regulatory changes and tariffs, affecting its quarterly results.
Shandong Electric Power Construction Corporation No. 3 (SEPCO3) has signed an EPC contract for the construction of the 700 MW Yanbu wind energy project under Saudi Arabia's National Renewable Energy Program.
The 17 MW floating wind turbine prototype, the most powerful in the world, was launched in China, marking a significant advancement in offshore turbine manufacturing and supporting the development of deep-sea offshore wind power.
RWE has inaugurated the Mondonuovo wind farm in Italy, a 53.1 MW facility capable of powering 55,000 Italian households. This project marks a key milestone in the development of renewable energy in Italy.
Swiss company Wysenergy has secured public funding for its first wind project in France, located in the municipality of Faux-Fresnay and selected under the PPE2 tender scheme.
Energy supplier OVO plans to invest several hundred million pounds in the renovation of British wind farms, aiming to increase national capacity and accelerate the country’s energy transition.
Danish group Cadeler has taken early delivery of the Wind Keeper, its eighth vessel, now tied to a three-year contract with Vestas worth a firm EUR210m ($228m), including additional options.
bp has announced the sale of its US onshore wind operations to LS Power, strengthening the American group’s 21GW portfolio and continuing its global asset divestment strategy.
Dstgroup, through its subsidiary dstventures, invests €1.5mn ($1.62mn) in Gazelle Wind Power and commits to building the structures for the Nau Azul project, marking progress for the floating wind industry in Portugal.