Solar and Wind Energy Credit (Personal)

Program Overview

Implementing Sector State
Category Financial Incentive
State Hawaii
Incentive Type Personal Tax Credit
Web Site http://tax.hawaii.gov/geninfo/renewable/
Administrator Hawaii Department of Taxation
Start Date 07/01/2009
Expiration Date None
Eligible Renewable/Other Technologies Solar Water Heat, Solar Space Heat, Solar Photovoltaics, Wind (All), Wind (Small)
Applicable Sectors Commercial, Residential, Multifamily Residential
Incentive Amount

Solar Thermal and PV: 35%

Wind: 20%

Maximum Incentive Varies by technology and property type (see summary for details)
Eligible System Size PV Systems installed on or after January 1, 2020: 5 MW maximum capacity
Equipment Requirements System must be new and in compliance with all applicable performance and safety standards.
Carryover Provisions Excess credit may be carried forward until exhausted.

Summary

Originally enacted in 1976, the Hawaii Energy Tax Credits allow individuals or corporations to claim an income tax credit of 20% of the cost of equipment and installation of a wind system and 35% of the cost of equipment and installation of a solar thermal or photovoltaic (PV) system.* 

For solar thermal water heating systems, the maximum allowable credits are as follows:

  • Single family residential property is eligible for a credit of 35% of the actual cost or $2,250, whichever is less;
  • Multi-family residential property is eligible for a credit of 35% of the actual cost or $350 per unit, whichever is less; and
  • Commercial property is eligible for a credit of 35% of the actual cost or $250,000, whichever is less.

For photovoltaic and solar space heating systems, the maximum allowable credits are as follows:

  • Single family residential property is eligible for a credit of 35% of the actual cost or $5,000, whichever is less; if all or part of the system is used as a substitute renewable energy technology for the solar water heating requirement for new residential construction, the credit shall be reduced by thirty-five per cent of the actual system cost or $2,250, whichever is less;
  • Multi-family residential property is eligible for a credit of 35% of the actual cost or $350 per unit, whichever is less; and
  • Commercial property is eligible for a credit of 35% of the actual cost or $500,000, whichever is less.

For wind powered energy systems the maximum allowable credits are as follows:

  • Single family residential property is eligible for a credit of 20% of the actual cost or $1,500, whichever is less; if all or part of the system is used as a substitute renewable energy technology for the solar water heating requirement for new residential construction, the credit shall be reduced by twenty per cent of the actual system cost or $1,500, whichever is less;
  • Multi-family residential property is eligible for a credit of 20% of the actual cost or $200 per unit, whichever is less; and
  • Commercial property is eligible for a credit of 20% of the actual cost or $500,000, whichever is less.

For a system that is business property, it is important to note that the costs that exceed the amount allowable for the maximum energy tax credit may be used for the Capital Goods Excise tax credit. In addition, for taxable years beginning after December 31, 2005, the dollar amount of any utility rebate must be deducted from the cost of the qualifying system and its installation before applying the state tax credit. 

A new provision was added to the tax credits in June 2009, with the passage of SB 464. This legislation, effective July 1, 2009, allows the tax credit to be refundable under certain conditions. For solar energy systems, a taxpayer can reduce the eligible credit amount by 30%. If this reduced amount exceeds the amount of income taxes to be paid by the taxpayer, the excess credit will be refunded to the taxpayer. If the tax credit exceeds a tax payer’s income liability, the excess credit over liability may be used as a credit against the taxpayer’s income liability until exchausted. Taxpayers whose entire income is exempt or whose adjusted gross income is $20,000 or less (or $40,000 or less if filing jointly) may receive the tax credit as a refund.

 

Authorities

Name HRS §235-12.5
Date Enacted 1976, subsequently amended
Effective Date 7/1/2003
Expiration Date None
Name HAR §18-235-12.5
Date Enacted 11/09/2012
Effective Date 11/16/2012

Contact

Organization:
Hawaii Department of Taxation
Address:
P.O. Box 259
Honolulu, HI 96809
Phone:
(808) 587-4242
E-Mail: