State senators in Hawaii voted April 13 on a bill to cut the cap for residential solar tax credits from $5,000 to $2,500. The bill also cuts the cap for commercial property owners from $500,000 to $250,000.
Solar advocates said the measure will hurt the state’s economy and make it harder to achieve its clean energy goals.
A Senate committee added language to cut the renewable energy credit to an unrelated film tax credit bill, House Bill 1174. Solar advocates said the language was added without notice or outreach to Hawaii’s clean energy sector.
“Now is not the time just as we are trying to pull ourselves off the mat from the Covid- 19 pandemic,” Rocky Mould, executive director of the Hawaii Solar Energy Association, was quoted as saying.
Solar installation companies employ about 2,500 people statewide, according to the Solar Energy Industries Association. The state has around 1,400 MW of installed solar capacity, which accounts for around 15% of the state’s electricity demand.
The vote in the state Senate comes as lawmakers look to bolster the state budget. Tax revenues have fallen during the pandemic. Mould said the state would gain about $18 million in tax revenue by cutting the solar benefit, but added that the taxable economic activity from rooftop PV “far exceeds this amount.”
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California does not have any tax credits for solar installations and home owners can only get the Federal Tax Credit, yet, California homeowners pay the same high electricity rates as Hawaii and the high electrical costs, from utilities, is enough incentive to push solar panels sales up in California. The cost of solar installations has dropped from $8,00 per watt in 2009 to $3.00 per watt in 2021, More than half, so as prices on utility electrical power have increased by 40% over the same period, the system has plenty of incentive to go solar.