New legislation could see the American offshore wind energy sector receive continued tax incentives after Massachusetts and Rhode Island Senators introduced a bill to extend Production Tax Credit (PTC) and Investment Tax Credit (ITC) schemes out to 2025.
Democratic senators Edward J. Markey and Sheldon Whitehouse submitted the joint Offshore Wind Incentives for New Development (WIND) Act; which aims to extend the 30 percent Investment Tax Credit for offshore wind.
“This bill will keep an important tax credit on the books so New England and other coastal and Great Lakes areas can continue to reap the benefits of offshore wind,” said Senator Whitehouse, a member of the Environment and Public Works Committee and co-chair of the Senate Climate Action Task Force.
The U.S. industry had a win last year when the Senate voted 23-3 in favour of an omnibus bill extending the ITC to 2019. The ruling overturned a previous vote to end subsidies for developers of large-scale wind projects. It meant that wind projects would continue to receive tax credits as long as construction of wind farms began while the scheme was in place.
But under this timeline, the Department of Energy has found that no new offshore wind power projects can qualify for tax credits before they expire in 2019. The lengthy policy planning, grid management and logistical procedures required by offshore wind energy projects mean construction can take years to begin after plans are approved.
America’s first offshore wind farm, the Deepwater Wind near Block Island, Rhode Island, is expected to come online later this year after eight years of financial and political wrangling.
Senator Markey said the U.S. was in danger of being left behind Europe, which supports 60,000 jobs in the offshore wind sector.
“The answer to America’s clean energy future really is blowing in the wind,” said Senator Markey, who also sits on the Environment and Public Works Committee and chairs the Senate Climate Clearinghouse.
“Offshore wind projects hold tremendous promise for our nation and for Massachusetts as an engine to create tens of thousands of jobs, harness homegrown innovation, and reduce carbon pollution. We are the Saudi Arabia of offshore wind in New England and we need to harness that potential by providing long-term certainty to this industry in the tax code.”
