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    Home»Commodities»‘It doesn’t make much sense’
    Commodities

    ‘It doesn’t make much sense’

    August 5, 20254 Mins Read


    Having previously declared a national energy emergency, the Trump administration has made a push to increase America’s production of specific energy sources, such as oil and gas, over the past several months. However, that push appears to be leaving renewable energy largely behind. Because of this, a pair of proposed wind farm projects may be in jeopardy.

    What’s happening?

    The main federal tax credit supporting offshore wind development in the United States has been the Investment Tax Credit. With the potential to offset up to 30% of a project’s cost, the incentive was part of the planning for two new wind farms off the East Coast. Each was projected to generate enough electricity to power nearly 500,000 homes.

    US Wind’s MarWin Offshore Wind Project off the Delmarva Peninsula and the New England Wind Project off the coast of Massachusetts were each slated to begin construction in the near future. But, according to early-July reporting from Canary Media, the recent passage of the highly controversial budget bill now threatens the viability of both.

    On July 4, President Donald Trump signed H.R.1 into law. The massive piece of legislation, also known as the One Big Beautiful Bill Act, was equipped with provisions that modified clean energy tax credits, including those tied to offshore wind production.

    The Inflation Reduction Act previously provided substantial credits for clean energy projects — H.R.1 aims to rapidly ramp those down.

    Companies now have until July 4, 2026, to begin wind farm construction to qualify for the credit. Projects already under construction have until December 31, 2027, to be “placed in service” in order to qualify.

    What’s notable about a shortened tax credit deadline?

    According to Harrison Sholler, an offshore wind analyst at BloombergNEF, the accelerated deadline could make it too difficult for wind farm projects to secure sufficient financing in time. “We don’t predict any new offshore wind projects starting construction … at least in the next four years,”  Sholler told Canary Media just before H.R.1 passed.

    As noted by Iberdrola, the company behind the New England Wind 1 project, the planned wind farm would be capable of bringing “$3 billion of direct investment to the region.” The company said it could also create 4,400 new jobs. And with an operating capacity of 791 megawatts, Iberdrola expects that the farm would have the ability to reduce “emissions equivalent to taking 300,000 gasoline-based cars off the road annually.”

    A major benefit of wind farms is the generation of a renewable energy source that can significantly reduce dependence on fossil fuels. This can help improve air and water quality while helping to replace a major contributor to rising global temperatures.

    What’s being done about the future of offshore wind farm projects?

    With the elimination of clean energy tax credits around the corner, experts fear that the growth of wind energy production could be severely hindered.

    Elizabeth Wilson, an environmental studies professor at Dartmouth College, spoke with Canary about the significance of the policy change. “If you take away the tax credits, it doesn’t make much sense to develop an entirely new sector,” Wilson said.

    Despite this, five offshore wind projects are still under construction around the country, according to the outlet. This includes Dominion Energy’s 2.6-gigawatt Coastal Virginia Offshore Wind project, slated to be completed next year. The company has said the project is expected to be able to supply electricity to as many as 660,000 customers at its peak capacity.

    Jeremy Slayton, a Dominion Energy spokesperson, confirmed that the company remains eligible for the remaining tax credits. “There is no impact to Coastal Virginia Offshore Wind. The project is nearly 60 percent complete and is on schedule to be completed in late 2026,” Slayton said.

    Join our free newsletter for good news and useful tips, and don’t miss this cool list of easy ways to help yourself while helping the planet.



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