Companies looking to develop offshore wind-related facilities in the seven southern counties of New Jersey can now apply for tax credits through an initiative organised by the US state.
The New Jersey Economic Development Authority (NJEDA) said the Offshore Wind Tax Credit Program is designed to spur private capital investment and employment growth in large, land-based offshore wind industry projects.
The scheme, which is capped at $100m in total, provides reimbursement for eligible investments in industry-specific facilities, the authority said.
Under the program, businesses may qualify for tax credits of up to 100% of capital investments made in a qualified facility.
However, the credit may be limited by a net positive economic benefits test that uses the project’s estimated tax revenues to ensure the state will receive a return greater than the value of the credit.
“Approved entities may 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,” NJEDA said.
Capital investment of at least $50m must be made in a qualified wind energy facility within one of seven targeted counties – Burlington, Camden, Gloucester, Salem, Cumberland, Mercer and Cape May – to qualify for the credit.
Companies leasing space at a qualified facility can also apply for the tax credit but will still be required to demonstrate $50m in capital investment with at least $17.5m of that money the responsibility of the prospective tenant.
In addition to the capital investment, businesses must also create at least 300 new, full-time jobs.
NJEDA senior vice president in the office of economic transformation 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 for our families.
“We are excited to take this critical step forward. The new Offshore Wind Tax Credit Program is a fiscally responsible and targeted incentive that will help accelerate private sector investment into offshore wind infrastructure and manufacturing here 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.”
Companies have until 1 July 2024 to apply, with credits to be awarded by July 2027.
New Jersey Governor Phil Murphy (pictured) has set a 3.5GW offshore wind capacity target by 2030.