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Hawaii

Hawaii

Incentives/Policies for Renewables & Efficiency

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Solar and Wind Energy Credit (Personal)   

Last DSIRE Review: 09/02/2014
Program Overview:
State: Hawaii
Incentive Type: Personal Tax Credit
Eligible Renewable/Other Technologies: Solar Water Heat, Solar Space Heat, Photovoltaics, Wind
Applicable Sectors: Commercial, Residential, Multi-Family Residential
Amount:Solar Thermal and PV: 35%;
Wind: 20%
Maximum Incentive:Varies by technology and property type (see summary for details)
Eligible System Size:Not specified
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.
Start Date:7/1/2009
Expiration Date:None
Web Site: http://tax.hawaii.gov/geninfo/renewable/
Authority 1:
Date Enacted:
Date Effective:
Expiration Date:
HRS ยง235-12.5
1976, subsequently amended
7/1/2003
None
Authority 2:
Date Enacted:
Date Effective:
Temporary Administrative Rules
11/09/2012
11/16/2012
Summary:

Note: On January 2, 2014, Hawaii Revised Statue §235-12.5 regarding the taxation of renewable systems were adopted and became effective. An accompanying change in the Hawaii Administrative Rules (HAR 235-12.5clarifies how virtual and aggregated net metered systems are to be taxed. “Other solar energy systems installed and “placed in service” from January 1, 2013 through January 1, 2014 must adhere to §18-235-12.01T to 06T, Temporary Administrative Rules. For more information and tax forms, visit the Hawaii Department of Taxation website.

Originally enacted in 1976, the Hawaii Energy Tax Credits allow individuals or corporations to claim an income tax credit of 20% of the cost of equipment and installation of a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 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.


 
Contact:
  Information Specialist
Hawaii Department of Taxation
Taxpayer Services Branch
P.O. Box 259
Honolulu, HI 96809
Phone: (808) 587-4242
E-Mail: Taxpayer.Services@hawaii.gov
Web Site: http://www.state.hi.us/tax
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Disclaimer: The information presented on the DSIRE web site provides an unofficial overview of financial incentives and other policies. It does not constitute professional tax advice or other professional financial guidance, and it should not be used as the only source of information when making purchasing decisions, investment decisions or tax decisions, or when executing other binding agreements. Please refer to the individual contact provided below each summary to verify that a specific financial incentive or other policy applies to your project.

While the DSIRE staff strives to provide the best information possible, the DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. make no representations or warranties, either express or implied, concerning the accuracy, completeness, reliability or suitability of the information. The DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. disclaim all liability of any kind arising out of your use or misuse of the information contained or referenced on DSIRE Web pages.

Copyright 2013 - 2014 North Carolina State University, under NREL Subcontract No. XEU-0-99515-01. Permission granted only for personal or educational use, or for use by or on behalf of the U.S. government. North Carolina State University prohibits the unauthorized display, reproduction, sale, and/or distribution of all or portions of the content of the Database of State Incentives for Renewables and Efficiency (DSIRE) without prior, written consent.