Hawaii
Incentives/Policies for Renewables & Efficiency
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Last DSIRE Review: 06/26/2009
| Incentive Type: |
Personal Tax Credit |
| State: |
Hawaii |
| Eligible Renewable/Other Technologies: |
Solar Water Heat,
Solar Space Heat,
Photovoltaics,
Wind
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| Applicable Sectors: |
Commercial,
Residential,
Multi-Family Residential
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| Amount: | Solar Thermal and PV: 35%;
Wind: 20% |
| Maximum Incentive: | Varies by technology and property type (see summary for details) |
| Carryover Provisions: | Excess credit may be carried forward until exhausted. |
| Eligible System Size: | Not specified |
| Equipment/Installation Requirements: | System must be new and in compliance with all applicable performance and safety standards. |
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Web Site: |
http://www.hawaii.gov/
dbedt/info/energy/renewable/solar
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Authority 1:
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HRS §235-12.5
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| Date Enacted: | 1990, subsequently amended |
| Date Effective: | 7/1/2003 |
| Expiration Date: | None |
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Authority 2:
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HB 1464
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| Date Enacted: | 6/25/2009 |
| Date Effective: | 7/1/2009 |
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Authority 3:
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SB 464
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| Date Enacted: | 6/25/2009 |
| Date Effective: | 7/1/2009 |
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Summary:
Originally enacted in 1990, the Hawaii Energy Tax Credits allow individuals or corporations to claim an income tax credit of 20% of the cost of equipment and installation of a wind system and 35% of the cost of equipment and installation of a solar thermal or photovoltaic system.
For solar thermal energy systems, the maximum allowable credits are as follows:- Single family residential property is eligible for a credit of 35% of the actual cost or $2,250, whichever is less;
- Multi-family residential property is eligible for a credit of 35% of the actual cost or $350 per unit, whichever is less; and
- Commercial property is eligible for a credit of 35% of the actual cost or $250,000, whichever is less.
For photovoltaic systems, the maximum allowable credits are as follows:- Single family residential property is eligible for a credit of 35% of the actual cost or $5,000, whichever is less;
- Multi-family residential property is eligible for a credit of 35% of the actual cost or $350 per unit, whichever is less; and
- Commercial property is eligible for a credit of 35% of the actual cost or $500,000, whichever is less.
For wind powered energy systems the maximum allowable credits are as follows:- Single family residential property is eligible for a credit of 20% of the actual cost or $1,500, whichever is less;
- Multi-family residential property is eligible for a credit of 20% of the actual cost or $200 per unit, whichever is less; and
- Commercial property is eligible for a credit of 20% of the actual cost or $500,000, whichever is less.
Legislation passed in June 2009 made several changes to the tax credits. HB 1464, signed by the governor in June 2009, addressed renewable energy systems that are used to obtain a variance from the solar water heating (SWH) system requirement. Wind energy systems installed on new single-family homes after December 31, 2009 that are used to get a variance from the SWH requirement will not be eligible for the tax credit. Solar photovoltaic systems installed on new single-family homes after December 31, 2009 that are used to get a variance from the SWH requirement will be eligible for a reduced tax credit. This tax credit will be reduced by 35% of the actual system cost or $2,250, whichever is less. SB 464, enacted in June 2009, allows the tax credit to be refundable under certain conditions. For solar energy systems, a taxpayer can reduce the eligible credit amount by 30%. If this reduced amount exceeds the amount of income tax payment due from the taxpayer, the excess credit will be refunded to the taxpayer. For renewable energy systems, the tax credit may be refunded to certain qualified taxpayers, including taxpayers whose entire income is exempt or whose adjusted gross income is $20,000 or less (or $40,000 or less if filing jointly).
For a system that is business property, it is important to note that the costs that exceed the amount allowable for the maximum energy tax credit may be used for the Capital Goods Excise tax credit. In addition, for taxable years beginning after December 31, 2005, the dollar amount of any utility rebate must be deducted from the cost of the qualifying system and its installation before applying the state tax credit. For further information, please refer to the Department of Taxation's Tax Information Release 2007-02.
Background:
Since originally enacted in 1990, the Hawaii Energy Tax Credits have been amended several times. As a result of SB 855 in 2003, the tax credits were revised and extended to the end of 2007. SB 3162 of 2004, allowed for a credit that exceeds the taxpayer's income tax liability to be carried forward to subsequent years until exhausted. HB 2957, enacted in June 2006, removed the credit's sunset date, increased the maximum credit for some applications, and eliminated the provision that required new federal tax credits to be deducted from the actual cost before calculating the state tax credit.
SB 644 discontinued the personal tax credit for solar water heating installations on new home construction after December 31, 2009. This legislation also disallowed residential home developers to take the tax credit for solar water heating installations in 2009.
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Please note: The information on the DSIRE web site provides an overview of incentives and other policies, but it should not be used as the only source of information when making purchasing decisions, investment decisions, tax decisions or other binding agreements. Please refer to the individual contact provided in each record to verify that a specific incentive or other policy is applicable to your specific project.
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