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Biden Administration’s New Tax Guidance: Lowering Electricity Costs in Massachusetts via Offshore Wind
Expanded Bonus Investment Tax Credit: How It Could Impact Offshore Wind Projects in Massachusetts
The Biden administration has unveiled new tax guidance that could potentially lower the cost of electricity in Massachusetts through upcoming offshore wind procurement. The guidance expands eligibility for a bonus investment tax credit, increasing it from 30 percent to 40 percent for eligible offshore wind projects. This boost could significantly impact the overall cost of selected projects and ultimately affect electricity prices. The timing of the guidance is crucial, as Massachusetts had delayed its next procurement bidding process in anticipation of this favorable guidance, giving offshore wind developers a tight window of five days to finalize their bids.
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Federal Government Incentivizes Offshore Wind Energy with Bonus Tax Credits – Unlock Renewable Power!(PHOTO: KRON4)
Expanded Eligibility Criteria: New Tax Guidance Opens Doors for More Offshore Wind Projects
Previously, the bonus tax credit was only available to projects in historical energy communities, such as those with closed coal-fired power plants or significant fossil fuel-related employment. However, the new guidance introduces two additional criteria for qualification. One involves locating monitoring equipment in eligible ports like New Bedford, Somerset, or Salem. The other grants “energy community status” to areas hosting land-based power conditioning equipment, potentially including communities serving as interconnection points for offshore wind farms. Barnstable, where power cables from existing wind farms connect to onshore substations, could qualify under this criterion, despite its stark contrast to traditional energy communities like Brayton Point in Somerset. State officials are currently reviewing the details of the new guidance with legal experts before providing further comment.
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