Local home and business owners have received energy tax credits from the state of Hawaii since 1976. Over the years, the amounts and conditions under which the credits were awarded have undergone changes. As of September 2013, the state added clarifications for Hawaii solar energy credits because officials perceived abuse of the system.
Hawaii leads the nation in solar power energy. Statistics indicate that 2.6 percent of the state’s residential and business owners have solar energy. Residents interested in becoming one of the statistics and obtaining Hawaii solar energy should fill out our quick and easy form.
Though the state fully embraced the energy renewal system and established credits to encourage property owners toward adopting solar energy, the abuse of credits eventually began depleting Hawaii’s revenue. In 2010, the state paid $35 million in credits. That number jumped to $173 million by 2013.
Under the current law, home and business owners purchasing and installing Hawaii solar energy systems may claim a tax credit for up to 35 percent. However, the maximum amount the owners of any one system may claim is $5,000.
One of the problems lie with the property owners who install more than one system or divide one system into multiple units and claim a tax credit for each. In 2010, the Tax Department attempted to alleviate the confusion by declaring that the number of photovoltaic systems would be determined by the number of independent connections attached to the circuit breaker or utility meter. Unfortunately, the clarification still brought confusion for property owners because contractors and electrical engineers also had varying opinions as to what constituted a single or multiple system.
The new guidelines limit the number of solar rebates for Hawaiian residents by basing credits on the output capacity of the system. In order to obtain one credit, a system must generate at least 500 kilowatts of power. The legislation also stipulates a capacity minimum for multi-family residences and business owners. Apartment complexes, for example, must have systems that generates at least 360 watts of power. Systems on commercial properties must produce at least 1,000 kilowatts of power to receive one credit. The new ruling goes into effect on January 1, 2014
When the new rules take effect, energy conservation groups estimate that the new regulations will reduce financial rewards by at least one-half, which may dissuade property owners from purchasing and installing an energy conserving system. The renewable energy group known as the Blue Planet Foundation notes that purchasing energy systems not only reduces the state’s use of fossil fuels, but also bolsters the economy. The organization indicates that 17 percent of the construction jobs are directly related to renewable energy installations. If sales and installations decline, the economy may face a dramatic shift.
Hawaii’s goal remains to obtain 40 percent of the energy used produced by renewable sources. Property owners may get a free estimate for energy renewable systems by filling out our quick and easy form.