January 23, 2024 — Citing the need for additional guidance from the federal government on the tax code as it pertains to energy credits, Massachusetts along with Connecticut and Rhode Island informed regulators at the end of last week that they intend to delay their current offshore wind solicitation program. The three states had agreed to a coordinated solicitation which is currently underway and was scheduled to close at the end of the month, but will now be extended by at least two months.
“In light of the current uncertainty around federal tax guidance,” the states wrote to the regulators saying they are “concerned that the existing solicitation schedule may produce bids that do not maximize the potential clean energy tax benefits of offshore wind.” They write that they believe it is critical to revise the schedule to encourage the most cost-effective bids.
Tax credits had previously emerged as one of the issues cited by the large developers as one of the hurdles to proceeding with large U.S. offshore wind farms. In addition to the impact of inflation and supply chain problems including a shortage and delays for install vessels, Ørsted for example cited the problems in realizing proposed tax credits as one of the challenges that had caused it to review and abandon U.S. projects. The company reported it expected as much as $5.5 billion in impairment charges as its abandoned U.S. projects including a large wind farm planned for the coast of New Jersey.