President Donald Trump signed an executive order restricting access to tax credits for renewable energy projects, including offshore wind. The new rules could imperil two Massachusetts projects, New England Wind and SouthCoast Wind, which aim to use union labor and invest in the Port of New Bedford.
The IRS defines “beginning of construction” in two ways: a 5% expenditure on the project’s total cost or physical work of significant nature. Trump is targeting these definitions through his executive order, aiming to bring an end to years of subsidies.
The Treasury Department will issue guidance next month, which could further narrow tax credit options and increase burdens for wind developers. Experts say this could devastate pending projects and impact ratepayers. Massachusetts Energy and Environment Secretary Rebecca Tepper warned that the new rules may cause a 6% increase in household electricity costs.
Trump’s actions are seen as part of his efforts to restrict offshore wind development, which is aimed at reducing greenhouse gas emissions. The industry has been investing heavily in the US, with over $360 billion earmarked for credits and loans under the Inflation Reduction Act.
Massachusetts has three offshore wind projects underway or planned, but uncertainty surrounds their future due to Trump’s recent moves. New England Wind and SouthCoast Wind face tight deadlines to begin construction if they want the subsidies, which could pose a risk to project completion and revenue streams.
Renewable energy experts say the industry needs support and clear regulations to thrive. The executive order’s impact on ratepayers is expected to be significant, with some estimating an increase of up to 320 percent in electric bills.
Source: https://newbedfordlight.org/trump-congress-further-chill-offshore-wind-industry