The deal was widely reported by US media on Wednesday evening (27 July), though details had not been immediately released.
However, Bloomberg cited an anonymous but knowledgeable source saying a wind tax credit was included in the package, while trade body American Clean Power (ACP) said it included “long-term clean energy tax credits”.
The deal has $369.75 billion in energy security and climate change programmes over the next ten years, said the deal-brokers, Senate majority leader Chuck Schumer and West Virginia senator Joe Manchin.
Unless there is an extension, the wind production tax credit, the industry’s main support mechanism in the US, is being phased out and is due to expire completely in 2023.
The bill also includes an investment in domestic energy manufacturing.
Schumer and Manchin announced the surprise deal less than two weeks after Manchin, a conservative Democrat from a coal-heavy state, had said he could not support climate provisions in his party’s spending package.
Schumer and Manchin’s breakthrough deal aims to "reduce carbon emissions by roughly 40% by 2030" and address inflation—which Manchin cited as his main concern when he torpedoed spending plans earlier in July – while also reducing the deficit. This is according to a joint statement released by Schumer and Manchin.
The bill could reach the Senate floor as soon as next week. The Inflation Reduction Act of 2o22, as it is dubbed, is far more modest than the $2 trillion “build back better” bill as originally envisioned by President Joe Biden and Democratic leaders.
Even so, it is a major victory for Biden and the Democrats. “We will improve our energy security and tackle the climate crisis — by providing tax credits and investments for energy projects. This will create thousands of new jobs and help lower energy costs in the future,” Biden said in a statement.
ACP chief executive Heather Zichal said: “The entire clean energy industry just breathed an enormous sigh of relief. This is an 11th hour reprieve for climate action and clean energy jobs, and America’s biggest legislative moment for climate and energy policy.”
Liz Burdock, CEO and founder of the Business Network for Offshore Wind, said: "The network is glad to see Congress taking action to support the rapidly growing offshore wind industry. As announced, the proposed Senate package will ensure that more Americans can take advantage of the well-paying jobs that will be created as more offshore wind projects are developed, all while reducing inflationary pressures. The proposed package takes an important, and historic, step forwards in its support for offshore wind.”
The deal caps many months of negotiations, anger and foot-dragging that some Democrats feared could tarnish their party’s image in the months leading up to the mid-term elections in November, when they could well lose their majority in the House of Representatives.
For the wind industry, it follows the news that new onshore wind installations had fallen by more than three quarters in the second qurter of 2022 year on year, according to the latest ACP figures.