In a move that’s sending ripples through the global energy community, the International Energy Agency (IEA) has trimmed its 2030 renewables forecast, citing major policy reversals in the United States and regulatory changes in China. The new outlook, released earlier this week, shows a significant slowdown in renewable capacity expansion, a development that could threaten global climate goals.
According to the report, the IEA now expects around 4,600 gigawatts (GW) of renewable power capacity by 2030, down sharply from last year’s projection of 5,500 GW. That’s a reduction of nearly 248 GW, signaling a loss of momentum in what was previously the fastest-growing sector in global energy.
U.S. Policy Rollbacks Slash Growth by Half
One of the biggest reasons behind the downward revision is the United States, where new federal policies have cut renewable growth forecasts by nearly 50%.
Analysts point to recent policy changes under the current administration, which include reductions in tax credits for clean energy projects, stricter permitting rules, and weakened incentives for developers.
The IEA notes that these rollbacks are discouraging new investments, with many large-scale projects either delayed or cancelled due to rising financial uncertainty. “Federal support has been crucial in driving renewable growth over the past decade. Its removal creates a vacuum that private capital alone cannot fill,” the report says.
China’s Auction Reforms Slow Expansion
The second major factor comes from China, the world’s largest renewable energy market. The country has shifted from its long-standing feed-in tariff model which guaranteed fixed payments to producers to a competitive auction system.
While intended to improve efficiency, the new policy has added uncertainty for developers. With profit margins shrinking and project financing becoming riskier, the IEA warns that China’s renewables expansion will likely lose speed through the second half of the decade.
Solar energy, which remains the largest component of China’s clean power portfolio, is among the most affected. The IEA has cut its global solar growth forecast by about 5%, primarily due to slower Chinese output and weakened investor confidence.
Wind and Offshore Projects Also Feel the Heat
The impact isn’t limited to solar. The IEA also downgraded projections for onshore and offshore wind, citing supply chain disruptions, cost inflation, and local permitting hurdles. Offshore wind capacity growth, once considered a backbone of Europe’s energy transition, is now expected to be 25% lower than earlier estimates.
Many developers have struggled with the rising cost of materials, such as steel and copper, while others face delays in grid connections and local opposition. “Without stronger policy support, wind power expansion will likely plateau before 2030,” the agency cautioned.
Bright Spots: India and Europe Show Resilience
Despite the weaker outlook for the world’s two largest markets, the IEA report also highlights a few positive developments.
India has emerged as a strong growth driver, thanks to faster project approvals, lower solar equipment costs, and national initiatives promoting rooftop solar and hybrid renewable plants. The country is now on track to become the second-largest market for new renewable capacity, after China.
Meanwhile, Europe continues to make progress toward its 2030 climate goals. The continent’s new renewable-friendly policies and streamlined permitting systems have accelerated project launches in nations like Germany, Spain, and France. The IEA praised Europe’s “stable investment environment” as a model for sustaining long-term clean energy growth.
Global Climate Goals Under Pressure
The revised forecast has raised fresh concerns about the world’s ability to meet the COP28 target of tripling renewable capacity by 2030.
With the current pace, global renewables would reach only 2.7 times their 2022 levels, a shortfall that could undermine efforts to keep global warming below 1.5°C.
The agency warns that without renewed political commitment and consistent support policies, the clean energy transition could stall at a critical time. “Policy inconsistency remains the biggest risk,” the IEA stated, urging governments to “ensure that climate ambitions are backed by predictable frameworks.”
Investor Confidence Wavers
Industry experts say the IEA’s downgrade could have ripple effects across financial markets. Renewable energy stocks have already seen heightened volatility, with investors growing wary of long-term returns.
Analysts believe that the recent U.S. pullback and China’s reforms have made investors more cautious, especially in large-scale solar and offshore wind sectors that depend on predictable policy environments.
“Developers need stability, not uncertainty,” said one energy market strategist. “The mixed signals from policymakers are shaking confidence in what was once considered a guaranteed growth sector.”
The Road Ahead: Challenges and Opportunities
While the forecast is less optimistic, experts emphasize that the energy transition is far from derailed. The falling cost of solar panels and batteries continues to make renewables more competitive than fossil fuels in most regions.
The IEA suggests that emerging markets in Asia, Africa, and the Middle East could fill part of the gap, provided they receive greater financial and technical support. Decentralized solar systems, battery storage, and grid modernization are also expected to play key roles in maintaining global progress.
Still, the report concludes that achieving long-term climate goals will depend heavily on policy consistency. Countries must focus on creating stable frameworks, faster permitting, and stronger incentives to restore investor confidence.
Final Outlook
Despite the downward adjustment, the world’s renewable energy capacity is still projected to double by 2030, a remarkable feat considering the challenges. However, experts caution that unless major economies particularly the U.S. and China reaffirm their commitments, the clean energy revolution could lose momentum at a critical juncture.
The IEA’s latest warning is clear: the energy transition is not guaranteed. It depends on political will, stable policy, and the global community’s determination to push forward before time runs out.
