U.S. Sens. Tom Carper, D-Del., and Susan Collins, R-Maine, rolled out a bipartisan bill Aug. 1 that aims to spur development of offshore wind facilities.
The Incentivizing Offshore Wind Power Act, or S. 1672, would amend Section 48 of the U.S. tax code to provide a 30% investment tax credit for the first 3,000 MW of offshore wind power capacity that enters service. The bill defines an offshore facility as any located in the inland navigable waters of the U.S., including the Great Lakes, or in the coastal waters of the U.S., including territorial seas and the Outer Continental Shelf.
"By giving private sector companies the certainty they need, our legislation will help accelerate the development of this promising industry in America and create a new, sustainable source of domestic power," Collins said. In addition to Carper and Collins, the legislation was co-sponsored by 10 other senators, including Sherrod Brown, D-Ohio; Brian Schatz, D-Hawaii; and eight others from New England and mid-Atlantic states.
In late 2015, Congress extended the production tax credit for all large wind projects by five years, with the credit to gradually phase down until expiring at the end of 2019. In addition, developers could claim an investment tax credit for qualifying wind facilities in lieu of the production tax credit. To qualify for either credit, producers must begin construction on a wind facility before Jan. 1, 2020. The credit is available for 10 years after the facility is placed into service.
An investment tax credit reduces federal income taxes for qualifying recipients based on capital investment in renewable energy projects, while the production tax credit lowers federal income taxes based on electrical output.
The legislation comes as the Trump administration and Republicans in Congress work to draft a tax reform package that could include a sharp cut to the corporate tax rate. Other details of the tax plan, including which business tax deductions could be eliminated, have yet to be finalized and could make extending or creating new incentives difficult.