Fulfilling the Promise of U.S. Offshore Wind: Targeted State Investment Policies to Put an Abundant Renewable Resource within Reach

Report
May 21, 2013

The underlying limiting factor for offshore wind development in the United States is that the basic economic and financial conditions for offshore wind success are not in place. Without them, investors are not comfortable providing capital for these projects, and the sector inevitably will struggle to get off the ground. The way forward for U.S. states seeking to reap the benefits of offshore wind is clear: put in place targeted investment polices that provide the revenue certainty and debt capacity necessary to make projects viable and attractive to the equity and debt investors that comprise the sector.

Germany is an example of a country that has taken those steps with a feed-in tariff achieving revenue certainty and a lending program for improving access to debt financing. In the United States, states should craft functionally similar solutions that unleash the American offshore wind energy potential and deliver transformative environmental and economic benefits. This paper focuses on the German policy successes and the lessons they present for the United States and also briefly examines the very unsuccessful German approach to transmission as a cautionary tale that should not be replicated in the United States.