Senators push US Treasury on offshore wind tax breaks

The tax credit bonuses at issue include one for domestically produced clean-energy components – such as nacelles and blades – and one for projects sited in so-called energy communities – areas that traditionally relied on fossil fuels or that have high unemployment.

Wind development has lagged in the US despite the IRA being signed into law in August 2022. Last year, wind installations were the slowest for US onshore wind installations since 2014.

“Without a clear understanding of whether — and to what extent — offshore wind projects would qualify for the domestic content and energy community bonus tax credits, developers may be forced to bid at unnecessarily high prices or may be unable to secure needed project financing due to an inflationary market and congested supply chain,” said the letter to US Treasury secretary Janet Yellen and climate aide Ethan Zindler.

“Guidance will create much needed certainty for the offshore wind industry, especially when it comes to procurement,” the senators continued.

Senator Edward Markey of Massachusetts was the lead signatory of the letter.

He and the other signatories asked for final guidance before 27 March, the deadline for Massachusetts, Connecticut and Rhode Island for their joint request for proposals for offshore wind.

The letter noted that in September the governors of Massachusetts, Connecticut, Maryland, New Jersey, New York and Rhode Island wrote to the president, Joe Biden, “reiterating the importance of quickly finalising the domestic content and energy community guidance and warning that inaction or delay could threaten offshore wind projects in their states”.

The Treasury Department did not respond to a request for comment.