Hawaii Solar Energy Resources and Incentives

Posted by EcoFriendly

Jun 5

Renewable Energy-Related Legislation and Loan programs in Hawaii

Hawaii Energy Tax Credits enacted Solar and Wind Energy Credit (Corporate) in 1990, according to which individuals or corporations can avail an income tax credit of 35% of the cost and installation charges for a solar thermal or photovoltaic system. Then back in 2003 in SB 855, there was a revision in Tax Credit and also an extension till 2007. According to SB 3162 in 2004, a taxpayer was allowed to claim a credit exceeding his income tax liability which can be carried forward until it’s exhausted. State of Hawaii enacted HB 2957 in the month of June, 2006 which removed the credit’s sunset date and also for some thermal applications it increases the maximum credit allowed. HB 2957 also announced the removal of new federal tax credits which were to be deducted from the cost of the system prior to the calculation of state tax credit. Then according to SB 644 solar water heating system owners, are no more required to pay personal tax credit for installations on new home construction after December, 2009.

Single family residential property owners are liable to a credit of 35% of the cost of solar thermal energy systems or $2,250, whichever is less. For multi-family residential property owners, it is 35% of the cost or $350 per unit. In case of commercial property, the tax credit is 35% of the system cost or $250,000, whichever is less.

Whereas for buying photovoltaic systems single family residential property owner can avail a credit of 35% of the system’s cost or $5,000 whichever is less. The same for multi family residential property owner is 35% of system’s cost or $350 per unit, whichever is less. Commercial property owners are eligible to claim a credit of 35% of the photovoltaic system’s cost or $500,000, whichever is less.

High Technology Business Investment Tax Credit, enacted in July 2001, allowed 100% tax credits on an equity investment in a qualified high tech business in Hawaii. Qualified high tech business (QHTB) is considered as a business where 50% of the work goes into research activities in the following areas Wind energy, hydropower, solar thermal, ocean thermal energy, geothermal energy, wave energy, fuel energy, landfill energy etc. There are various slabs for allowed credit based on the year the investment was made. Later in 2004 HB 2396, expiration date of tax credit was changed to December 31, 2010 from December 2005.

According to Hawaii Revised Statutes (HRS) §46-19.6, every county agency issuing construction and development related permit are required to apply priority processing of permit applications for projects involving environmental and energy issues. This processing is offered at free of cost. Buildings meeting energy and environmental standards are only allowed for this processing. These standards are offered through LEED silver rating or a two Green Globes ratings.

Section 2 of Act 96 signed by Hawaii’s Governor in May 2006, states the requirements of renewable energy and energy efficiency in Hawaii’s public schools. For 2006-2007 fiscal year, $500,000 was allocated for the development of a net-metered, photovoltaic pilot project. HRS §196-9 also sets the standards to promote energy efficiency for state facilities, motor vehicles and transportation fuels. Hawaii solar incentives guide offered by Solar Power Authority.

Hawaiian Electric Company (HECO) and the City and County of Honolulu jointly started the Honolulu Solar Roofs Loan Program offering low interest loans (0% or 2%) to qualified homeowners of Oahu. Single family home owner is entitled to a maximum loan of $80,000 for each dwelling unit and up to four units with a upper limit of $125,000 per property. The funding comes from City’s Rehabilitation Loan Program for the installation of solar heating systems.

Similarly to increase the use of use of renewable energy in Maui County, Maui Electric Company (MECO) and the County of Maui jointly started Maui County – Solar Roofs Initiative Loan Program in September 2002. A rebate up to $1,000 is provided for the installation of solar systems with a down payment equal to 35% of the system’s actual cost. Renters can also apply for this rebate with property owner’s permission. MECO is entitled for the administration task and all funds are sanctioned by County of Maui.

According to HB 2261, from July 2008, Farmers and Aqua culturists are eligible for the Farm and Aquaculture Sustainable Projects Loans. The projects must involve photovoltaic (PV) energy, hydroelectric power, wind power generation, methane generation, bio-diesel and ethanol production. Through this loan an amount of $1,500,000 or 85% of the project’s cost can be availed. Department of Agriculture is responsible to determine the credibility of the applicant. These loans are in “H” class with an interest of 1%. In case of unpaid principle balance a simple interest is charged.

For the installation of solar watering heating systems the Kauai Island Utility Cooperative (KIUC) provides interest free loans. Kauai Community Federal Credit Union (KCFCU) and Kauai County Housing Agency (KCHA) are responsible for providing the funding. KIUC is responsible for paying the interest and all other administrative tasks. Commercial systems are not allowed to apply for.

Rebate programs

HECO – Energy$olutions Appliance Rebate Program
Through Energy$olutions program Hawaiian Electric Company (HECO) started offering various incentives mainly for their residential customers. These rebates can be availed against the purchase of room air conditioners or servicing of central air conditioners. The system must be installed only in Oahu and rebate can availed within the six months of the purchase.

HECO, MECO, HELCO – Energy$olutions Solar Water Heater Rebate
For the installation of solar water heaters, HECO and its subsidiaries Maui Electric Company (MECO) and Hawaii Electric Light Company (HELCO) offer a one-time rebate. This Energy$olutions Solar Water Heater Rebate program has been effective since June 1996 and supported more than 30,000 home solar water heater installation in Hawaii. Within the service territory of HECO, HELCO or MECO, the Residential Energy$olutions program will provide a rebate of $1,000 for the installation of solar water heater on new construction. Whereas Commercial customers are entitled to $125 per deferred kilowatt (kW) coincident with peak electric demands through the Commercial Energy$olutions rebate for solar water heaters. HECO itself provides the list of the contractors participating in the program and its 100 point inspection ensures the HECO’s stringent standards.

HECO, MECO, HELCO – Energy$olutions Business Appliance Rebates and Customized Incentives Program
Commercial and business customers can apply for this utility rebate program which incorporates energy efficiency technologies like solar water heaters, Lighting, Heat pumps, Lighting controls/sensors, Heat recovery etc. Rebate amount is calculated on a case by case basis and greatly depends on the energy savings of the system and also whether the purchase being made is for retrofitting or new construction.

HECO, MECO, HELCO – Energy$olutions Water Heater Rebate
HECO, MECO and Hawaii Electric Light Company Inc. (HELCO) jointly approved rebates for Solar water Heater s, Heat pump water heater and high efficiency Electric Water Heaters under Energy$olutions programs. Funding is available only for retrofitting purposes. Applicants must be a permanent resident for more than year and they must purchase a program approved model. An amount up to $1,000 can be availed under this utility rebate program. Customers are also liable to get a monthly 43 credit on electric bill.

KIUC – Efficient Appliance Rebate Program
Under this utility program Kauai Island Utility Coop offers residential rebates for efficient appliances. Through this rebate program property owners can easily replace existing systems with new ones. Rebates are available for refrigerator, dishwasher and clothe washer throughout the year. Funding is provided on first come first served basis until it is exhausted.

KIUC – Energy Wise Commercial Energy Efficiency Program
Commercial customers of Kauai Island Utility Cooperative, a Touchstone Energy Cooperative are eligible to avail funding for installation of energy efficient equipment under this utility rebate program. KIUC’s Commercial Energy Services Representatives conduct a survey to identify provision for equipment replacement. After identification and verification of energy-saving measures KIUC releases an incentive payment.

KIUC – Solar Water Heating Rebate Program
This Commercial Energy Wise Program was started in 1998 by Kaua’i Island Utility Cooperative. This utility rebate program is applicable in both commercial and residential sectors. An analysis and screening for cost effective energy devices like solar water heating systems are issued. Under residential program an amount of $800 can be availed for each solar system and for commercial use, 50% to 80% of the equipment costs can be availed.