BOSTON — As it seeks investors, a project off the Massachusetts coast that aims to be the nation’s first offshore wind farm must reach fast-approaching benchmarks or risk missing out on hundreds of millions in critical funding.
To qualify for a tax credit that would cover a major portion of its capital costs, Cape Wind either must begin construction by Dec. 31 or prove it’s incurred tens of millions of dollars in costs by then.
Also, a $200 million investment — the only one of a specific dollar amount Cape Wind has announced — is conditioned on whether developers can fully finance the rest of the project by year’s end.
With less than two months until the deadline, Cape Wind isn’t publicly discussing financing efforts. It also has yet to start on-site construction and isn’t detailing how it can qualify for the tax credit, only that it expects to.
Even if Cape Wind fails to qualify, spokesman Mark Rodgers said, “We will move this project forward, we will secure financing and we will construct the project.”
The 130-turbine, $2.6 billion Cape Wind project was proposed for Nantucket Sound in 2001 and touted as a large, clean energy source near a high-demand coastal area. It’s been delayed by a thick bureaucracy and opponents who say the project will ruin the sound and threaten wildlife and maritime traffic.
Cape Wind has sold about three-quarters of its planned power output to two local utilities and aims to be producing power for homes and businesses in Massachusetts by 2015.
First, it must continue to lock down what financing it has and get more of it.
Of two major federal tax subsidies available to renewable energy projects, Rodgers said Cape Wind is pursuing one, an investment tax credit, which could cover a hefty 30 percent of its capital construction costs.