Senator Edward J. Markey (D-MA), et. al., introduced the Offshore Wind Incentives for New Development Act (S. 3036). The bill would amend Internal Revenue Code Section 48 by expanding the tax credit for investment in energy property to include qualified offshore wind properties until January 1, 2026. More specifically, the bill would mandate that a qualified offshore wind property is an offshore facility that uses wind to produce electricity, excluding certain small wind energy property that uses a small wind turbine to generate electricity.
Senators co-sponsoring the bill include: Jack Reed (D-RI), Elizabeth Warren (D-MA), Brian Schatz (D-HI), Jeff Merkley (D-OR), Sherrod Brown (D-OH) and Kristen Gillibrand (D-NY). If, approved, the amendments would be effective immediately.
Commentary
This proposal would extend the 30% wind investment tax credit to December 31, 2025, but only for qualified offshore wind properties. The wind credit currently is scheduled to be reduced beginning in two years' time and phased out entirely by 2020. The bill is sponsored primarily by senators from states in which there could be offshore wind production, namely states with coastlines. It is unclear why offshore wind should receive more favorable subsidies than other forms of renewable energy. Notably, the bill may not benefit ratepayers in coastal states, since offshore wind is expensive and dependent on an agreement by utilities in those states to purchase this type of electricity for 20 years at a time, and at a premium that is significantly above market rates.
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