Treasury inks new offshore wind guidance to calm fretting industry

By Heather Richards, Benjamin Storrow | 03/22/2024 01:38 PM EDT

The guidance clarifies how projects qualify for tax credits in the Inflation Reduction Act.

Wind turbines.

Offshore wind turbines. Steve Helber/AP

The Treasury Department released new guidance Friday to help offshore wind projects secure a bonus tax credit inked in the Inflation Reduction Act for locating in fossil fuel communities.

The energy community bonus, which can be stacked onto an existing tax credit, is at the heart of the Biden administration’s attempts to drive clean energy development in regions of the United States where fossil fuel facilities have closed or are in decline. But how to define the location of offshore wind projects, which are built in the ocean, has bedeviled federal officials.

The new guidance expands the onshore locations that an offshore wind developer can claim as its “community,” looping in a wind project’s operations and maintenance control systems. These nerve centers for running the offshore wind farm are often located in nearby ports, and their inclusion will make it easier for developers to qualify for a valuable boost of 10 percentage points to the investment tax credit.


The updates follow pressure on the Biden administration from pro-wind lawmakers and offshore wind developers who feared some of the country’s first proposed wind farms would fail to qualify under former rules, undermining the intent of Congress and hobbling the nascent renewable sector.