Challenge: Supply chains for advanced energy can be long and complex. For example, wind turbines can have up to 8,000 components, representing a significant hurdle in supply-chain management.
Solution: Large in-state component manufacturers can be encouraged to bring other members of the supply chain into the state through an anchor company tax credit. This incentive can help create a robust supply chain and boost manufacturing in the state. For example, given the wind industry’s complex supply chain needs, an anchor company tax credit could boost manufacturing in the sector, resulting in good-paying jobs.
The credit could be extended to other industries in the state with complex supply chains, contingent on the number of local jobs created.
Example: Rhode Island created an Anchor Institution Tax Credit to bolster the offshore wind industry. If a Rhode Island anchor company is responsible for a job-creating supplier locating in Rhode Island, the anchor company receives a tax credit. For instance, if a wind developer lures a manufacturer of subsea cables, the wind developer receives a tax credit.