Tax Credits & Incentives
We've broken down all of the major tax credits and incentives available to Hawaii residents for photovoltaic solar electric systems, solar hot water systems, and solar attic fans, as well as some statistics on the current state of electricity in Hawaii. This graphic was released in January 2013 and reflects the recent November 2012 changes to the state solar tax rules for how a system is calculated.
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Solar Photovoltaic Incentives
1. Federal Photovoltaic Incentives
Federal tax credits include 30% of the cost of solar electric systems with no cap. Expires Dec. 31, 2016
2. State Photovoltaic Incentives
State tax credits include 35% of the actual cost or $5,000, whichever is less. No expiration date, but credit may be reduced if part of the system is used because of the solar water heating requirement for new residential construction. In addition, production credits (called feed-in tariffs) are given at 21.8 cents per kilowatt-hour fed back into the system (for systems less than 20kW in size).
Solar Hot Water Incentives
1. Federal Solar Hot Water Incentives
Federal tax credits include 30% of the cost of solar hot water systems with no cap. Expires Dec. 31, 2016
2. State Solar Hot Water Incentives
The state of Hawaii offers a personal tax credit of 35% of the cost of the system or $2,250, whichever is less, as well as a one-time $750 rebate for existing homes (not available for homes built after 2009).
3. Local Solar Hot Water Incentives
Honolulu Solar Roofs Initiative
Low interest loans are available for income-qualified homeowners on Oahu for the installation of solar hot water systems
Maui Solar Roofs Initiative
Zero interest loans available
Solar Attic Fans Incentives
1. Federal Solar Attic Fans Incentives
The same federal tax credit that applies to solar PV and solar hot water systems applies to solar attic fans - 30% of the cost of the system with no cap. Expires Dec. 31, 2016
2. State Solar Attic Fan Incentives
The same personal tax credit of 35% of the actual cost of the system or $2,250, whichever is less, applies to solar attic fans in Hawaii as well as solar hot water.
3. Local Solar Attic Fan Incentives
The state of Hawaii also offers at $50-75 rebate for solar attic fans via local utility companies
Since originally enacted in 1976, the Hawaii Energy Tax Credits have been amended several times.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.
* The Hawaii Department of Taxation issued guidance on May 3, 2010. This guidance clarified the definition of a "system," especially with respect to the use of micro-inverters. The Department of Taxation emphasized in new guidance that the number of inverters does not determine the number of systems; rather, the number of connections to the electrical system determines the number of systems.