Tax Credits Axed for Offshore Wind Farms in U.S. Waters Starting 2026

This bill, straight up, kills two key tax breaks for offshore wind farms built in U.S. inland or coastal waters. Specifically, it targets the investment tax credit and the clean electricity production credit, making them unavailable for any energy produced, or wind farm components placed in service, after December 31, 2025. (SEC. 1).

Chopping the Credits

The main move here is eliminating financial incentives for wind energy projects in specific locations – basically, any waters considered "inland navigable" or "coastal." This means that after the 2025 cutoff, developers won't get tax credits for building or operating wind farms in these areas. For example, a company planning a wind farm off the coast of New Jersey or in the Great Lakes would no longer receive these federal tax benefits.

Real-World Ripples

So, what does this mean for folks outside of Congress? Well, if you're working on, or planning to work on, an offshore wind project in these areas, it's going to be more expensive. Fewer tax breaks could mean fewer projects, which could impact jobs in construction, maintenance, and related industries. On the flip side, if these projects were seen as a drain on taxpayer money, this change could be viewed as a cost-saving measure.

The Big Picture

This bill is a pretty targeted hit on where offshore wind farms can get financial help. It doesn't ban them, but it does make building them in U.S. coastal and inland waters less attractive from a financial standpoint. It's worth noting that the definition of "inland navigable" or "coastal" waters is crucial here, and any future legal fights over those definitions could directly impact which projects qualify – or don't – for these credits. This could also shift where wind farms are built, potentially pushing them further offshore or to different regions entirely.

One thing to keep an eye on is whether removing these incentives will slow down the growth of offshore wind energy in the U.S., especially in areas where these projects might have been providing jobs and a cleaner energy source. It also raises the question of whether this change might benefit other energy sectors, like fossil fuels, by reducing competition.