A powerful US Senate committee has voted to extend an existing investment tax credit (ITC) for offshore wind farms by one year, improving the chances that well-advanced projects will attract the investment they require.
The Senate finance committee has also proposed revising eligibility rules governing the offshore ITC, which allows investors to reduce their tax bill by about 30% of the offshore wind farm in question's capital costs. If the committee’s changes are approved, an offshore project would qualify for the ITC from the beginning of its construction rather than when it begins feeding electricity into the grid.
The committee's draft revisions to the offshore ITC could "make the difference" between eligibility and non-eligibility for Cape Wind, said Mark Rodgers, project spokesman. They could also benefit Deepwater Wind’s 30MW Block Island project and Fishermen’s Energy’s 25MW wind farm, planned for waters off Atlantic City.
Significantly, yesterday’s support for the tax breaks — part of a broad package to extend business tax breaks – came from six Republican senators as well as from Democrats. "It’s the first time in this [two-year term of ] Congress that there’s been a strong bi-partisan vote for the offshore ITC," commented Jim Lanard, president of the USA's Offshore Wind Development Coalition.
The full Senate may not vote on the bill until after the elections in November. The deadline extension and other changes would also have to be accepted by the House of Representatives, where there is less support for renewables.
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