Spending package includes five-year extension of critical tax incentives for offshore wind

Washington (December 22, 2020) – Senators Edward J. Markey (D-Mass.) and Sheldon Whitehouse (D-R.I.), and Congressman Jim Langevin (RI-02) applauded the inclusion of key components of their legislation, the Offshore Wind Incentives for New Development (WIND) Act (S. 1957), as part of the year-end spending package. The provision would extend the Investment Tax Credit (ITC) for offshore wind facilities at 30 percent through 2025, as called for in the Offshore WIND Act. Introduced in June 2019 by Senators Markey and Whitehouse, and Rep. Langevin, the Offshore WIND Act would spur the growth of offshore wind energy in the United States by extending tax credits for the renewable energy industry.

In addition to extending the offshore wind ITC, the omnibus budget package extends the ITC for solar and the production tax credit (PTC) for onshore wind. It makes permanent energy efficiency improvements for commercial buildings and extends a credit of up to $2,000 for the purchase of energy efficient homes, as well as extends credits for non-business energy property purchases. The package also includes a five-year extension of the tax used to fund the Oil Spill Liability Trust Fund.

“Offshore wind has the potential to change the game on climate change, and those winds of change are blowing off the shores of Massachusetts,” said Senator Markey. “Offshore wind projects are a crucial part of America’s clean energy future, creating tens of thousands of jobs up and down the East Coast and reducing carbon pollution. In our effort to harness this potential, we will now be able to provide this burgeoning industry the long-term certainty in the tax code that it needs. Our workers and our manufacturers stand ready to meet the demands of the offshore wind industry, and our economy stands ready to reap the winds of success. My big thanks to Senator Whitehouse and Rep. Langevin for their continued partnership and dedication to this legislation.”

“Rhode Island’s first-in-the-nation offshore wind farm charted a course for wind energy in American waters,” said Senator Whitehouse. “Now our growing offshore wind industry will have the certainty to follow Rhode Island’s lead.  That means huge investment in coastal communities and jobs, plus lots of clean, affordable energy for consumers.  I’m proud to have worked with Sen. Markey and Rep. Langevin to get this legislation over the finish line.”

“As home to the United States’ first offshore wind farm, my district has seen first-hand the power and benefits of renewable energy, and it’s important that other communities are able to tap into it as well,” said Rep. Langevin. “The extension of these vital incentives will strengthen our ability to produce clean energy, create good-paying jobs, reduce harmful emissions, and make communities more resilient. I thank Senators Whitehouse and Markey for their leadership in advancing this legislation and helping to build a greener, more sustainable future.”

Offshore wind has the potential to create tens of thousands of jobs up and down the East Coast. The extension of the ITC will play a critical role in ensuring that this nascent industry receives the support necessary to establish a new clean energy economy in the United States. Our offshore waters have the potential electricity-generating capacity of 2,000,000 megawatts (MW), and coastal states are ready to harness that new power. To date, states have set offshore wind procurement targets of more than 29,000 MW, and the Energy Department found that the United States could install a total of 86,000 MW of offshore wind projects by 2050. With ambitious state targets and the extension of the offshore wind ITC, the offshore wind industry will be able to support good jobs in manufacturing, installing, and maintenance and create clean electricity all along the US coasts.

In recent years, the ITC has been instrumental in the rapid expansion of renewable energy capacity. Due in large part to the ITC, the United States made the second-largest amount of investments in renewable energy capacity in 2019, with $55.5 billion in investments—an increase of 28% from 2018. Additionally, despite the coronavirus crisis, domestic renewable energy capacity grew significantly in 2020, with an estimated increase of 19,000 MW of solar capacity and 15,000 MW of wind capacity.

The nation’s first offshore wind project at Block Island, Rhode Island began operations in December 2016 after being initiated nearly nine years ago and is now producing enough power each year to power 17,000 homes. The Vineyard Wind 1 project—the first project planned for federal waters off the coast of Massachusetts—will generate clean, renewable, cost-competitive energy for more than 400,000 homes and businesses across the Commonwealth, while reducing carbon emissions by over 1.6 million tons per year. Massachusetts has set a goal of procuring a total of 3,200 MW of offshore wind, following recommendations in a 2019 study from the Massachusetts Department of Energy Resources.

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