Key Stakeholder Wind Group Backs Offshore Wind Investment Tax Credit Extension
WASHINGTON – Today, Sens. Tom Carper (D-Del.) highlighted support from a key stakeholder group for the long-term extension of investment tax credits for offshore wind, underscoring building momentum for crucial financial incentives to build offshore wind energy in this country. The American Wind Energy Association (AWEA) recently sent a letter to Sen. Carper expressing its support for a four year extension of both the production tax credit (PTC) for onshore wind and the investment tax credit (ITC) for offshore wind.
“History demonstrates that these long-term extensions will be most beneficial in attracting investment and increasing domestic jobs and manufacturing capacity and establishing a stable base for the industry’s continued growth,” wrote Denise Bode, CEO of the AWEA.
“I would like to thank the American Wind Energy Association for recently endorsing a four year extension of not only the production tax credit for onshore wind, but also the investment tax credit for offshore wind,” said Sen. Carper. “In October, I held a roundtable discussion with the Administration and with 14 major offshore wind stakeholders – key state representatives, manufacturers, developers and financers were all at the table. There was consensus that a long-term extension of the investment tax credit was critical to the success of the offshore wind industry. Put simply, if we are going to have offshore wind industry in this country, we will need a long-term extension of the investment tax credit for offshore wind. I look forward to working with AWEA and my colleagues to ensure the development of offshore wind energy comes to fruition in America.”
In July, Senators Carper and Olympia Snowe (R-Maine) introduced the Incentivizing Offshore Wind Power Act (S.1397), which extends investment tax credits for the first 3,000 MW of offshore wind facilities placed into service. Offshore wind investment tax credits are vital for this new clean energy technology because there is a much longer lead time for the permitting and construction of offshore wind turbines, compared to onshore wind energy. Joining Sens. Carper and Snowe as cosponsors are Sens. Chris Coons (D-Del.), Susan Collins (R-Maine), Robert Menendez (D-N.J.), Sheldon Whitehouse (D-R.I.), Sherrod Brown (D-Ohio), Frank Lautenberg (D-N.J.), Jack Reed (D-R.I.), Ben Cardin (D-Md.), and Barbara Mikulski (D-Md.).
A copy of the letter follows:
February 7, 2012
The Honorable Tom Carper
United States Senator
513 Hart Senate Office Building
Washington, D.C. 20510
Dear Senator Carper:
The American Wind Energy Association (AWEA) appreciates your strong support for both land-based and offshore wind energy. I am writing today to reinforce AWEA’s support for an extension of tax credits benefitting both land-based and offshore wind energy and to reiterate the urgency of extending these tax credits in the next several weeks.
The looming tax increase on both land-based and offshore wind energy is creating uncertainty that is chilling investment and contributing to layoffs at U.S-based manufacturing facilities as well as within both U.S.-based onshore and offshore development companies. These job and investment losses will gain additional momentum in the second quarter, but additional losses are preventable, and job growth in the sector can resume, if Congress acts now. In particular, due to lead times, the PTC is effectively already expired, with respect to new development and orders to wind turbine manufacturers. And, the potential tax increase on offshore wind energy is limiting the ability to attract financing to move projects forward to construction or permitting.
Federal tax incentives for renewable energy have been an effective tool to keep electricity rates low and encourage development of proven clean energy projects. For example, equipped with the PTC, the land-based wind energy industry has contributed impressively to U.S. economic development. Since 2005, the wind industry has spurred more than $60 billion of private investment. Today, over 400 facilities across 43 states manufacture for the wind energy industry. The US content of wind turbines being installed in the US has grown from 25% in 2005 to 60% today. Further, costs have been reduced over 90% since 1980, recently driven by a surge in game-changing technological advances. In the last four years, wind energy has provided 35% of all new U.S. power capacity. Stable tax policy is essential to replicating this domestic investment and manufacturing success story to serve offshore wind energy projects.
AWEA has endorsed a four year extension (through 2016) of the production tax credit (PTC) and a four year extension of the investment tax credit (ITC) specifically for offshore wind. History demonstrates that these long-term extensions will be most beneficial in attracting investment and increasing domestic jobs and manufacturing capacity and establishing a stable base for the industry’s continued growth.
Thank you for your leadership and for your continued vocal support of preventing a tax increase on both land-based and offshore wind energy.