Offshore wind tax credit passes NJ Senate in landmark vote
Unprecedented wind proposal calls for 20 percent of New Jersey houses to be wind-powered by 2020.
Tuesday, July 6, 2010 - 22:21
Earlier this year, I posted that preparation began in New Jersey for the nation's first offshore wind farm. Several wind-energy companies deployed a buoy in the ocean off Atlantic City in an effort to find the best possible location for one.
More recently (early July 2010), the state government took the first concrete steps toward ensuring the construction of an offshore wind farm. On July 5, a bill passed in the state senate that enables the state to provide $100 million in tax credits to companies developing offshore wind farms.
Matt Friedman of the State House Bureau writes "the Offshore Wind Economic Development Act would attempt to spur the development of wind farms off the coast by offering the incentives and creating a certificate program requiring that a certain amount of electricity sold in the State be from offshore wind energy."
Despite this dramatic step forward, we aren't home just yet. The bill still has to go before the State Assembly. The main problem will most likely be the controversy caused by the fact that developing wind energy will cost ratepayers more. Exact figures of the increase are disputed.
State Department of Environmental Protection Commissioner Bob Martin told a Senate Budget and Appropriations Committee "we will pay higher rates ... but the whole idea is to offset that by creating jobs and industry."
The goal of the bill is to ensure adequate wind energy infrastructure capable of generating 1,100 megawatts of energy, which should be enough to supply power to well over 200,000 homes. In addition, the bill calls for the generation of 3,000 megawatts resulting from wind energy by 2020.
In 2008 the U.S. Census Bureau estimated that there were around 3.5 million housing units in New Jersey. Through 2008, the total number of New Jersey households increased about 20-25,000 every year. If trends hold, there will be about 3.75 million total households in New Jersey in 2020.
If the state meets its 3,000 megawatt goal by 2020, this means that at that point wind energy will be supplying approximately 20 percent of the housing units in the state. This is an ambitious target, and certainly there will be unforeseen obstacles along the way. However, it remains to be seen if this goal is a binding target. I believe that for any target like this to work, there need to be deadlines along the way and penalties for failing to meet them. From what I understand, there are none of those in this bill.