On November 22, 2023, the Internal Revenue Service and Treasury Department released proposed regulations (the Proposed Regulations) relating to the investment tax credit (the ITC) under Section 48 of the Internal Revenue Code of 1986, as amended (the Code). The Proposed Regulations would amend certain existing Treasury Regulations that define the scope of ITC-eligible property (referred to as “energy property”) and general qualification for the ITC.
The Proposed Regulations include detailed guidance that, if finalized in its current form, would be relevant to offshore wind developers seeking to claim the ITC for their respective projects. Nonetheless, the Proposed Regulations leave open several significant questions, including applicability to novel approaches to interconnection and project ownership. What follows are some brief observations concerning the Proposed Regulations’ applicability to offshore wind development and related open questions.
