By Brooks Baehr - bio | email
HONOLULU (HawaiiNewsNow) – A day after the state Department of Taxation said it will be auditing homeowners who may have cheated the state by claiming too many tax credits for photovoltaic systems, the solar industry defended its practices and tried to calm consumer fears.
"I think the thing they'll find if they were to audit anybody is that these systems were installed in a way that is consistent with their own guidance," said Mark Duda, President of the Hawaii Solar Energy Association.
Homeowners who install new photovoltaic (PV) systems on their homes are eligible for tax credits worth up to $5,000 for every system installed for legitimate non-tax purposes.
The state said Thursday it is auditing homeowner tax returns because it wants to get money back from people who put more than one solar system on their home for the sole purpose of cashing in on additional credits, which is illegal, and not because they had a legitimate need for more than one system.
Department of Taxation spokesperson Mallory Fujitani told Hawaii News Now, "We've heard a lot of comments or complaints from people that some companies may be misrepresenting how much credit they (homeowners) can claim. So what we are using the audit process to do is figure out, you know, is this being done correctly? Is there a pattern? Are there patterns for certain companies?"
Duda said Friday cheating the state by needlessly creating multiple solar systems and advising homeowners to file for multiple credits is against association policy. He said multiple systems are only installed when they are needed to maximize solar power production or for safety reasons.
"Obviously we don't reach down into every company's business practices, but our policy as an industry association is to uphold the law and not perpetuate fraud or do anything of the kind," Duda said.
He acknowledges there are a lot of homes with multiple systems and homeowners who have claimed multiple credits. But says the cases he is familiar with are perfectly legal.
Duda showed us a document from the Department of Taxation dated May 21, 2010. It clearly lists reasons homeowners can install multiple systems and claim multiple credits.
"It is a relatively long list. It includes things like maximum power point tracking, multiple roof planes, shading, future system expansion, increased inverter efficiency, utility interaction requirements, and maximizing the production of renewable energy," Duda said while reading the document word for word.
"Basically, you run into situations where the manufacturers' guidance for the site (a particular home) will force you to design in a certain way and that ends up resulting, in some cases, with more than one system at a given house," Duda added.
Duda said despite the threat of possible audits, it is his opinion people who have claimed multiple credits need not worry about getting in trouble with tax officials as long as their systems were installed in accordance with the state's own guidelines, guidelines he says solar energy association members honor.