State lawmakers are contemplating whether to roll back state tax credits for some renewable resources.
House Bill 1369 was heard by the House Finance Committee on Wednesday and proposed repealing credits for solar, wind, and renewable fuel.
The move was met with concern from the State Energy Office and the Hawaiʻi Green Infrastructure Authority.
HGIA Executive Director Gwen Yamamoto-Lau commented in written testimony that striking the renewable energy technologies income tax credit from state statute may "hinder solar investment for Hawaii’s most vulnerable households facing the highest electricity costs in the nation."
The credit allows Hawaiʻi residents to claim $5,000 for installing a solar energy system or 35% of the system cost, whichever is lesser.
Lau noted that although savings from tax credits often do not directly help low-income households who do not have tax liabilities, taking these credits off the table may chill third-party investments in rooftop solar leases that assist low-income communities in lowering their energy costs.
Chief Energy Officer Mark Glick stated in written testimony that the removal of credits for solar and renewable fuel may slow progress toward the state’s renewable goals.
"Tax incentives have proven to be an effective mechanism to achieve these goals. Abruptly and completely repealing any tax credits would disrupt the businesses affected and the livelihoods of those employed by them," Glick wrote.
Several environmental groups and members of the solar industry testified in opposition to HB1369's rollback of renewable energy tax credits.
State Rep. Kyle Yamashita chairs the Finance Committee and introduced the bill. He said its purpose was to create a forum to discuss the tax credits.
"It is the responsibility of this committee that we evaluate all the money that is affected with the state of Hawaiʻi," he said.
Yamashita removed the section about solar credits from the bill, but said the discussion on the role tax incentives should play in promoting renewable energy was ongoing.
"At some point in time, I have asked the solar industry in particular, every market as it matures, there has to be an exit to subsidy," Yamashita said in committee. "Nobody's been able to give me the answer to that question. When is it time? Because if you don't exit, then there is market distortion."
House Bill 1369 passed out of the committee with amendments. It will be heading to the House floor for a full vote.
