Legislation was introduced in the House this week that would use the US tax code to develop offshore wind energy through new investment and production tax credits.
The Offshore Wind American Manufacturing Act (HR 7388) would create a 30% investment tax credit for qualified facilities that manufacture offshore wind components. This would reduce the high capital costs required to build, upgrade or re-equip a facility. In addition, the investment tax credit would be supplemented by a new production tax credit that would generally range from $0.02 to $0.05 per watt times the total rated capacity of the turbine.
“Increased investment and innovation in offshore wind energy is inherently forward-looking and is perhaps the best way to reduce our dependence on fossil fuels while simultaneously modernizing America’s infrastructure for the next century to combat climate change,” U.S. Representative Bill Pascrell Jr. (D-NJ), the bill’s original sponsor, said. “On top of that, the expansion of U.S. wind power and the creation of a national supply chain for offshore wind installations promises a bonanza of reliable, union-friendly jobs along our coasts.”
The bill is also sponsored by U.S. Representatives Donald Norcross (D-NJ), Bobby Scott (D-VA), Elaine Luria (D-VA), and Donald McEachin (D-VA). It has the support of various organizations, including the North American Building Trades Unions (NABTU).
“NABTU and its affiliates have a vested interest in the growing offshore wind industry. This rapidly expanding source of clean energy represents jobs of the future, unionized jobs that create pathways to the middle class, and jobs that help the President reach his goal of creating 30 gigawatts of offshore wind power from 2030. This legislation supports our road contractor and developer partners as they invest in the projects that NABTU’s nearly 3 million members will build to power this nation,” said NABTU President Sean McGarvey.
The Offshore Wind American Manufacturing Act would increase credits where prevailing wages are paid for workers involved in the construction and expansion of manufacturing facilities or where there is a unionized workforce in the manufacture of products offshore wind farms.
“The Offshore Wind American Manufacturing Act will help accelerate the building of a globally competitive offshore wind turbine manufacturing industry, building on the American expertise, ingenuity and production of the steel and ships,” said David Hardy, CEO of Orsted Offshore North America. “Offshore wind energy, including Orsted’s six U.S. offshore wind farms in development today, is already creating economic opportunity not just in the Northeast, but in 44 states.
The full tax credit will be available until December 31, 2028 and will be phased out each year. The production tax credit would be available until December 31, 2030. It would also help create thousands of manufacturing jobs.