Offshore wind power development could soon gain a boost from federal tax incentives. U.S. Senators Tom Carper (D-Delaware) and Olympia Snowe (R-Maine) recently introduced the Incentivizing Offshore Wind Power Act to extend the federal wind energy investment tax credit to offshore wind projects. The legislation secures investment tax credits for the first 3,000 MW of off-shore wind facilities (approximately 600 wind turbines) placed into service in the US.
Offshore wind presents what is said to be enormous opportunity to generate clean electricity close to the large population centers along the U.S. coasts. According to the University of Delaware, the winds off the Atlantic Coast can produce enough power to replace about 300 coal plants–enough to support nine states from Massachusetts to North Carolina. Producing clean electricity close to the areas of highest demand also reduces the cost of transmitting power over great distances.
However, compared to onshore wind, offshore wind projects face longer lead times for permitting and construction. The tax credit incentive is intended to provide developers with the financial stability necessary to bring off-shore wind power projects to fruition. “This legislation is essential to encourage the continued growth of this fledgling industry,” said Senator Carper. Once awarded a tax credit, companies must complete the installation of the offshore wind facility within five years. Companies claiming the credit are not eligible for other production or investment tax credits.
Several proposed offshore wind projects are currently moving through the development process in Delaware, Rhode Island, and New Jersey. Projects have also been discussed off the shores of Massachusetts, Maine and the Great Lakes states.