US Offshore Wind Retreat Deepens as Federal Government Pays Developers to Cancel Leases
The gap between the US and the rest of the world on offshore wind has widened into a chasm. While Europe and Asia are expanding auctions, the Trump administration has spent 2026 systematically paying developers to walk away from federal offshore wind leases entirely.
The buyout pattern. In March 2026, the administration reached an agreement with French energy company TotalEnergies to cancel its offshore wind leases in the New York Bight and Carolina Long Bay regions — the US refunded $928 million in lease fees, and TotalEnergies agreed to invest an equivalent sum into fossil fuel production in Texas and the Gulf of Mexico, while pledging not to develop any new US offshore wind projects. The administration repeated the playbook in April with two more agreements: Bluepoint Wind (off New York and New Jersey) and Golden State Wind (off California) will relinquish their leases in exchange for roughly $900 million combined, with the companies required to redirect that capital into oil, gas, and LNG infrastructure. A coalition of states has since sued DOI, BOEM, and the Justice Department over the TotalEnergies deal specifically, arguing it’s unlawful.
The tax credit cliff. Beyond the lease buyouts, the “One Big Beautiful Bill” passed by Congress accelerated the expiration of Biden-era wind and solar tax credits — originally set to run no earlier than 2032 — to July 2026. Combined with a 50% tariff on wind turbine parts and components (most of which are manufactured in Europe and China), the economics for any offshore project still in planning have become largely unworkable. Developers are described as “riding it out” with skeleton crews rather than actively winding down, according to industry sources cited by Yale E360.
What’s still standing. The US currently has four operational offshore wind projects totaling 978 megawatts: Block Island (2016), the Coastal Virginia pilot (2021), South Fork Wind (2024), and Vineyard Wind 1, which began commercial operation this spring off Martha’s Vineyard. Of roughly 30 utility-scale projects once planned along the East Coast, only seven are still moving forward or operating. The most consequential recent development is corporate rather than regulatory: NextEra Energy’s agreement to combine with Dominion Energy would fold Dominion’s 2,640-megawatt Coastal Virginia Offshore Wind project — the largest in the country — into the largest US utility by market value. Analysts are split on whether that ownership change meaningfully improves the project’s odds given the broader federal headwinds.
The rest of the world isn’t waiting. Contrast the US retreat with global momentum: South Korea has conditionally designated seven offshore wind cluster zones totaling 11.1 GW. The UK confirmed its Contracts for Difference Allocation Round 8 will open in July 2026, with up to 18 offshore projects eligible to compete. The Philippines opened its fifth Green Energy Auction, allocating 3.3 GW of fixed-bottom capacity. France awarded a 1.5 GW fixed-bottom project off Normandy — its largest renewable energy project to date — plus two floating projects in the Mediterranean. Corporate offtake activity is also accelerating in Europe: Amazon signed a 110 MW power purchase agreement with RWE for the Nordseecluster B wind farms, and Google finalized a 15-year, 100 MW deal with EnBW for the He Dreiht wind farm.
The bottom line. Roughly 80 GW of offshore wind capacity exists globally today against an estimated 2,000 GW needed to meet climate targets — and essentially none of the incremental buildout required to close that gap is coming from the United States in 2026. The US offshore wind industry isn’t declining gradually; it’s being actively dismantled through a combination of lease buybacks, tariffs, and an accelerated tax credit expiration, while the rest of the world continues to auction new capacity at scale.