House bill seeks to increase offshore wind energy production

Legislation was introduced in the House this week that would use the U.S. tax code to grow offshore wind energy through new investment and production tax credits.

The Offshore Wind American Manufacturing Act (H.R. 7388) would create a 30 percent investment tax credit for qualified facilities that manufacture offshore wind components. This would reduce the high capital costs required to build, upgrade, or retool a facility. Also, the investment tax credit would be complemented by a new production tax credit that will generally range from $0.02 to $0.05 per watt multiplied by the total rated capacity of the turbine.

“Greater investment and innovation in offshore wind power is inherently forward-looking and perhaps the best avenue for reducing our reliance on fossil fuels while simultaneously modernizing U.S. infrastructure for the next century to combat climate change,” U.S. Rep. Bill Pascrell Jr. (D-NJ), the bill’s original sponsor, said. “On top of that, expansion of American wind power and the creation of a domestic supply chain for offshore wind facilities promises a boon of reliable, union-friendly jobs along our shores.”

The bill is also sponsored by U.S. Reps. 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 North America’s Building Trades Unions (NABTU).

“NABTU and its affiliates have a vested interest in the growing offshore wind industry. This rapidly expanding clean energy source represents jobs of the future, union jobs that create pathways to the middle class, and jobs that help the President accomplish his goal of creating 30 gigawatts of offshore wind by 2030. This legislation supports our high road contractor partners and developers as they invest in the projects which NABTU’s nearly 3 million members will build to power this nation,” NABTU President Sean McGarvey said.

The Offshore Wind American Manufacturing Act would enhance the credits where prevailing wages are paid for laborers involved in the construction and expansion of manufacturing facilities or where there is a unionized workforce in the manufacture of offshore wind products.

“The Offshore Wind American Manufacturing Act will help expedite the build-out of a globally competitive U.S. offshore wind manufacturing sector, drawing from American steel and vessel expertise, ingenuity, and production,” David Hardy, CEO of Orsted Offshore North America, said. “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 across 44 states.”

The full tax credit will be available until Dec. 31, 2028, and will phase out annually. The production tax credit would be available until Dec. 31, 2030. It would also help create thousands of manufacturing jobs.