Bipartisan legislation would extend investment tax credits to support the emerging offshore wind energy industry
Washington, D.C. — U.S. Senators Susan Collins (R-ME) and Tom Carper (D-DE) introduced a bill that would spark investments in offshore wind power, helping to create thousands of good-paying American jobs by supporting the construction of offshore wind energy projects.
The Incentivizing Offshore Wind Power Act would extend the wind investment tax credit (ITC) at 30 percent for offshore wind projects that commence construction by January 1, 2027, or the year after the United States has reached 3,000 megawatts of new offshore wind capacity, whichever is later. This ensures that the ITC is available until the offshore wind industry is established in the United States. Additionally, the bill would lower consumer costs by retroactively eliminating the current tax credit phase-down.
“Within 50 miles of the U.S. coast, there is enough offshore wind capacity to power our country four times over,” said Senator Collins. “Our bipartisan bill would provide a tax credit to help companies continue to develop this clean source of energy, including off the coast of Maine, where projects such as Aqua Ventus at the University of Maine have the potential to support more than 2,000 good-paying jobs in our state.”
“By harnessing offshore wind energy, we can create good-paying jobs, reduce our reliance on dirtier sources of power and provide more affordable electricity to consumers – all while helping to combat the worsening climate crisis,” said Senator Carper. “In a few short months, critical tax credits that help spur U.S. offshore wind development and manufacturing and help bring down consumer costs will expire, just as the industry is starting to take off in this country. The Incentivizing Offshore Wind Power Act provides a long-term extension of the offshore wind investment tax credit to ensure offshore wind – and the manufacturing and construction jobs that go along with the industry - are a reality in this country. We’ve already seen in red and blue states alike how onshore wind energy can fuel job growth and reduce harmful pollution. I believe the potential for offshore wind is even greater. I’m hopeful that the Senate will come together in a bipartisan way to support this legislation.”
The legislation is cosponsored by Senator Angus King (I-ME) along with Senators Sherrod Brown (D-OH), Ben Cardin (D-MD), Chris Coons (D-DE), Bob Menendez (D-NJ), Jack Reed (D-RI), Brian Schatz (D-HI), Elizabeth Warren (D-MA) and Sheldon Whitehouse (D-RI).
Full text of the bill can be found here.
Offshore wind projects create clean energy and good-paying domestic jobs. The Department of Energy estimates there is at least 2,000 gigawatts (GW) of wind power potential off our shores – in the waters of the Atlantic, Pacific, Great Lakes, and Gulf of Mexico - which is more than double the electricity consumed by Americans in 2015. If the United States takes advantage of this clean energy resource, in the next ten years offshore wind could create tens of thousands of U.S. jobs and pump billions of new revenue dollars into our nation’s economy. The University of Delaware recently published a study that found offshore wind could provide up to $70 billion in revenues for businesses in the offshore wind supply chain by 2030.
The long investment time, infancy of the industry, and higher initial costs of offshore wind, make offshore wind unique from onshore wind. Investors need a quicker return on such a long-term investment, which is why to date, the investment tax credit has been more advantageous for offshore wind projects than the production tax credit. Tax certainty for the first offshore wind movers ultimately reduces costs for future projects and, by extension, for consumers.
The wind investment tax credits (ITC) expire on January 1, 2020, and has been phasing down since 2017. To date, there is only one offshore wind project producing electricity in the U.S., off of Block Island, Rhode Island. However, there are many offshore wind projects in the development phase, with at least fifteen active offshore wind leases in federal waters and at least fourteen states actively engaged in developing offshore wind along their shores. This means the critical wind ITC for offshore wind is expiring just as the industry is getting off the ground in this country. If the U.S. wants to invest in offshore wind, a long-term extension of the investment tax credit, like the one provided in the Incentivizing Offshore Wind Power Act, is critical.
There is widespread support for the Incentivizing Offshore Wind Power Act among industry and environmental organizations alike.
“Without Congressional action, the federal Investment Tax Credit for offshore wind is set to phase out this year—just as the first wave of large-scale offshore wind projects prepare to begin construction. At this critical moment for a new U.S. energy industry, policy stability is more important than ever. We appreciate and strongly support proposals that would extend the Investment Tax Credit for offshore wind, jumpstarting the projected $70 billion build-out of America's offshore wind infrastructure, delivering large amounts of reliable, homegrown clean energy and tens of thousands of jobs to the U.S. economy,” said Tom Kiernan, CEO of American Wind Energy Association.