The American offshore wind industry is facing tough times as regulatory changes and rising costs have cut the number of projects by more than half in just one year, according to a new report from the Energy Industries Council.

The numbers show a sharp decline: the number of projects dropped from 45 to 23, and the planned capacity fell from 55.9 gigawatts to 25.4 gigawatts between the third quarter of 2024 and the third quarter of 2025. The EIC says this big drop is mainly due to policy changes that have created a tight deadline for developers.

A major issue is President Trump’s One Big Beautiful Bill Act, which sets two important deadlines: projects must begin construction by July 4, 2026, to qualify for tax credits for up to four years, or they must start delivering energy by December 31, 2027. Unfortunately, about 83% of current projects do not meet these deadlines.

The pressure isn't just about tax breaks. Manufacturing support under tax codes 45X and 48C will end after 2027, and domestic content requirements have increased from 20% under the Inflation Reduction Act to 27.5% under the OBBBA, with a further rise to 35% expected for projects starting after January 2026. This makes it particularly difficult for developers who need to import major components.

Federal leasing opportunities have also decreased significantly. A presidential memorandum has effectively halted new offshore leasing from day one of the administration, and the Bureau of Ocean Energy Management has retracted designated wind energy areas in several regions, including the Gulf of Mexico and the Atlantic. Many states are following suit, canceling or delaying their offshore wind projects.

Trade issues have added to cost pressures, with tariffs of 10% to 15% on goods from the EU and UK, and even a rise to 50% on certain steel and aluminum products impacting key components like blades, towers, nacelles, and cables. Additionally, the Department of Transportation's decision to cancel $679 million in port grants has slowed crucial upgrades to port infrastructure.

The financial impact of project delays is significant, with costs reaching up to $50 million per week for the Empire Wind project and over $15 million weekly for Revolution Wind. While both Empire and Revolution are starting construction again, other projects remain on hold as developers reconsider their strategies or shift investments to other markets outside the U.S.

California is a partial exception to this trend. The state has included offshore wind ports in a five-year infrastructure plan and secured bond funding, including $475 million for ports and $20 million specifically for the Port of Long Beach. The CADEMO floating project, a 60-megawatt initiative in state waters targeting operational status by 2028, is not affected by federal policy changes.

The supply chain for offshore wind development has adapted, with about 81% of companies involved in U.S. offshore wind also engaged in upstream oil and gas. This diversification allows companies to explore other markets like Canada, but it also risks slowing progress in the U.S. as their focus shifts elsewhere.

“This highlights the uncertainty in the U.S. offshore wind industry rather than a total cancellation,” wrote report authors Beatriz Corcino and Kevin Pedrosa from the EIC. They emphasize that this decline is due to delays and reassessments rather than a complete failure of long-term potential.

Rebecca Groundwater, EIC Global Head of External Affairs, stressed what is needed to reverse this trend. “Clear policies are crucial for deciding whether these projects will proceed or remain stuck,” she stated. “Stable and predictable policies are what investors need to shift uncertainty into action and help the U.S. regain momentum in offshore wind development.”

The declining project pipeline comes during what the report describes as a broader effort against the emerging U.S. offshore wind sector, with the administration stopping new leasing and permits, moving to revoke existing authorizations, and halting ongoing projects.

For an industry that once seemed ready for rapid growth, the message from investors and developers is clear: without stable regulations and a clear policy framework, the U.S. risks losing its leadership in offshore wind to international competitors.