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Offshore Wind Leasing and Puerto Rico

The Build Back Better Act has passed the House and gone to the Senate, where negotiations will continue for a possible vote before Christmas.

In an explainer at, the House Natural Resources Committee Democrats said, “The much-needed investments we’re making as part of the Build Back Better Act will create a stronger, more sustainable economy that will deliver significant returns over time. But even so, some still want to know: How are we paying for these investments right now?”

Fortunately, they continued, they have answers to that question. One is leasing wind power development rights on U.S. coastlines, including the area around Puerto Rico.

“Making these revenue-raising provisions part of the Build Back Better plan will make sure polluting industries are paying their fair share into our economy so we can have the financial resources we need to create jobs, cut taxes, and lower costs for working families,” the article says. “This is a big part of our push forward into a stronger, more sustainable economy.”

Wind power leases

Wind power is a clean, renewable energy source with many advantages. However, not every geographic location can produce profitable levels of electricity from wind. Because of this limitation, it is customary for companies (in Puerto Rico that includes Bacardi, the rum producers) or municipalities to lease land in places suitable for wind energy production.

A wind farm can then be set up with turbines that produce wind power. The owner of the land usually receives rentals and royalties for the use of the land and doesn’t have responsibility for developing the wind farm. A wind farm can become operational in as little as three months and doesn’t lessen the value of the land for agriculture in the future.

Puerto Rico currently has two wind farms, but estimates suggest that this is only about 1.5% of the territory’s possible capacity for wind energy production.

Good jobs

The Biden administration has a goal of “employing tens of thousands of workers to deploy 30 gigawatts (30,000 megawatts) of offshore wind by 2030.”

The Build Back Better Bill includes inducements for employers. Not only are there credits for producing clean energy, but there are additional credits for companies that offer apprenticeships or which pay higher than average wages.

Previous corporate tax incentives have benefitted corporations without creating jobs on the Island. The Build Back Better Bill’s green energy section requires that companies pay everyone, including all laborers and subcontractors, at “prevailing rates.”

Apprenticeships are also required. Projects beginning in 2022 will require 10% apprenticeships, increasing to 15% by 2023.

Offshore wind projects will be required to use 20% “domestic content,” rising to 55% in 2027. “Domestic content” means that the materials used must be manufactured in the U.S.

All these provisions are expected to extend the financial benefits of the planned wind farm leases to Puerto Rico.

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