Morningstar: Despite Policy Uncertainty, Demand for Renewables Remains Strong

Renewables accounted for over 90% of new capacity additions in 2024, led by growth in solar and battery storage. According to Morningstar’s newly published “US Renewable Energy: 2025 Q1 Industry Pulse” report, renewables growth will continue in 2025 and beyond, with wind and solar projected to steadily rise to over 40% of generation in the next decade. 

Key takeaways from the report include:

• Renewables, primarily wind and solar, constituted 18% of generation in the fourth quarter of 2024, up from 16% a year ago.
• Since mid-2021, coal as a percentage of overall energy generation has steadily declined. Its contribution in the fourth quarter of 2024 was 16%, flat with the year-ago quarter.
• While renewables will account for a rising percentage of generation, we still see meaningful roles for legacy fuels to help meet rising electricity demand. Data centers are likely to renew interest in natural gas and nuclear capacity additions because of high power density.
• US policy is likely to be the main driver of share price performance for renewables in 2025, as President Donald Trump has indicated he may repeal the Inflation Reduction Act and its numerous clean energy incentives. While Morningstar sees a full repeal as unlikely, a partial repeal is not off the table.

Read the full report at here.

Morningstar | https://www.morningstar.com/