Changes to Hawaii’s solar energy tax credit may slow photovoltaic industry

Pacific Business News - November 9, 2012
Duane Shimogawa

Hawaii’s fast-growing solar photovoltaic industry may be slowing down just a bit, thanks to changes to the state’s solar energy tax credit.

The main point of the new temporary administrative rules on tax credit, which apply to systems installed and placed into service on or after Jan. 1, 2013, limits the number of tax credits that homeowners may claim on multiple systems.

House Bill 2417, which died in the last legislative session, tried to eliminate the maximum available amount of the tax credit for solar-energy systems, unless the primary purpose of was to use energy from the sun to heat water for household use.

State Sen. Mike Gabbard, D-Waikele-Kapolei and chairman of the Senate Energy and Environment Committee, told PBN that he does not have an official position on the new rules and needs to learn more about it.

“I want to make sure there’s no unintended consequences and see what stakeholders have to say,” he said.

For more than a year, the Hawaii Department of Taxation said it has been receiving calls and complaints from taxpayers about confusion over how to calculate the renewable energy tax credit.

After listening to their concerns, the department decided to put in place the new rules that only apply to tax credits claimed for “other solar energy systems,” including PV systems.

These systems will now need to meet the applicable total output capacity requirements that are in the new rules.