State legislatures tackle renewable energy tax credits

Published: Feb. 5, 2013 at 11:01 PM HST|Updated: Feb. 6, 2013 at 3:29 PM HST
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HONOLULU (HawaiiNewsNow) - Lawmakers are facing the difficult task of establishing tax credits that support Hawaii's green energy infrastructure while reducing its fiscal impact on the state's budget.

The Committee on Energy and Environmental Protection reviewed four bills with variations on reforming renewable tax credit today. The proposals vary depending on the type of clean energy -- like wind or solar power -- to the type of credit -- rates based on how much energy is produced over time -- versus up front incentives.

"What we want to do is create a simple system, a fair credit, save the state money but at the same time make sure the industry's going to keep on going and folks can continue to get cheap solar energy for their homes," said Representative Chris Lee, the House Chair for the Committee on Energy & Environmental Protection.

The baseline tax credit for photovoltaic solar panels is currently 35% of the installed cost per system, but at least one new bill has proposed reducing the rate to 15%

"We've actually jumped out ahead of every other state in the country in terms of our employment of these renewable resources," said Mark Duda, President of the Hawai'i PV Coalition. "Now we're just at the point where we could really take advantage of that and kind of lock in those gains, and we're talking about basically different ways to throw them away."

Hawai'i residents have claimed tens of millions of dollars in renewable energy credits, but dishing out tax credits to go green has had a significant impact on the state's ability to maintain a balanced budget. There has also been considerable confusion and concerns about compliance, after a change on how prior tax credits were applied went into effect at the beginning of this year.

"Our main concern is administering the state tax laws, consistently, uniformly, and fairly," said Fred Pablo, the Director of Taxation. "A homeowner wants to be assured that they're entitled to the same credit as the next homeowner is."

Renewable energy supporters say clean energy programs are worth the investment. They point to a recent study by former University of Hawaii economist Dr. Tom Loudat that found for every dollar in tax credit the state spends, it gets $2.67 back.

"The bottom line is these renewable energy tax credits are good for the state, they're good for the economy, they're good for ratepayers, they're good for the environment," said Richard Wallsgrove, the Program Director for Blue Planet Foundation.

The Committee on Energy & Environmental Protection will make its decision after reviewing all of Tuesday's testimony when they reconvene Wednesday at the State Capitol.

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