The state Legislature's effort to preserve Hawaiʻi's historic income tax break could have dire consequences for its solar energy efforts, according to industry leaders.
State lawmakers this session wrestled over the idea of pausing the historic tax break to cover the budget shortfall this year, and eventually agreed on a measure to keep it intact.
But to find the money to do so during a tight budget year, lawmakers made last-minute amendments to the measure, including capping the state’s Renewable Energy Tax Credit.
Legislators cut the tax credit, which is used primarily for the installation of rooftop solar panels, by capping the state's ability to spend on it to $40 million for four years.
Solar industry leaders held a rally at the state Capitol to ask lawmakers to vote against the bill.
“ We're asking legislators to vote no on the bill. We're asking the governor to veto the bill if it goes to his desk,” said Rocky Mould, the executive director for the Hawaii Solar Energy Association. “We understand that's really challenging because of all that's wrapped into this bill and all the contingencies with the budget. We get that that's really difficult. We just think this is an existential threat for Hawaiʻi's ability to control skyrocketing electricity costs going forward.”
He and representatives from several local solar companies gathered at the state Capitol for a last-ditch effort to keep the bill from moving forward.
There are several reasons they want to preserve the tax credit, including the concern that it could hurt customers’ abilities to control Hawaiʻi’s rising electricity costs — and that could make the cost of living in the state even worse.
At the rally, Inter-Island Solar Supply CEO and President Brian Gold said the bill “is masked under the headline of creating more affordability for low- and moderate-income households. But what it actually does in the details is it takes money out of those same consumers' left pocket just to put it back in their right.”
The measure could also compound recent struggles in the industry, and could lead to layoffs and even the closure of solar companies.
A federal level tax credit for solar panels was cut last year, leading to a 30% drop in solar installations during the first couple months of this year. Industry leaders said that that number could jump to over 50% if the measure becomes law.
