Companies making a capital investment in offshore wind-related facilities in the seven southern counties of New Jersey can now apply for tax credits through the state’s Offshore Wind Tax Credit Programme.
The Offshore Wind Tax Credit is a financial tool designed to spur private capital investment and employment growth in major, land-based offshore wind industry projects by providing reimbursement for eligible capital investments in industry-specific facilities.
Offshore wind is one of the high-growth, high-wage sectors the state identified in Governor Murphy’s Economic Development Plan. The programme is targeting projects that will spur job creation in the short term while paving the way for long-term economic growth by anchoring an offshore wind manufacturing supply chain in New Jersey. Total credits approved as part of the programme are capped at US$100M.
New Jersey Economic Development Authority (NJEDA) senior vice president Brian Sabina said “encouraging investment in clean energy is a key element of Governor Murphy’s vision for a stronger and fairer New Jersey economy because it creates unprecedented new opportunities for job creation while also providing a healthier, more sustainable future.
“The Offshore Wind Tax Credit programme will help accelerate private sector investment in offshore wind infrastructure and manufacturing in New Jersey. These early investment projects have the potential to attract a broader offshore wind supply chain and position New Jersey as a national leader in the industry.”
Under the programme, businesses may qualify for tax credits of up to 100% of capital investments made in a qualified wind facility, but the tax credit amount may be limited by a net positive economic benefits test which uses the project’s estimated tax revenues to ensure the state will receive a return greater than the value of the credit. Approved entities can elect to apply 10% of the total credit amount per year over a 10-year period against their corporation business or insurance premiums tax or sell the credit for at least 75% of its value.
To qualify for the tax credits, businesses must make a capital investment of at least US$50M in a qualified wind energy facility in the target counties: Burlington, Camden, Gloucester, Salem, Cumberland, Mercer, and Cape May. Businesses leasing space at a wind facility may also apply for the tax credit but will still be required to demonstrate US$50M in capital investment in the wind facility, at least US$17.5M of which is the responsibility of the prospective tenant applicant.
In addition to the capital investment requirement, businesses must also create at least 300 new, full-time jobs which may include supply chain jobs, such as manufacturers, suppliers, and installers associated with the qualified wind energy facility.
The Offshore Wind Journal Conference in London on 5 February 2019 will address key issues including global market developments, increasing turbine sizes, floating offshore wind and industry regulations. Book your place now.