Renewable Energy-Related Legislation and Loan programs in Hawaii
Hawaii has always been a prime candidate for solar energy applications, especially with their abundance of sunshine and geographic isolation. Solar energy is abundant and, more importantly, available in the state, making it more appealing than other forms of energy that require costly transportation. As such, Hawaii is rich with rebates, loans, and services aimed at bringing solar power to the homes and businesses of the state.
As indicated by the most recent Hawaiian Legislator, the state’s government continues to push in their efforts to make solar power readily available to its citizens. The 2011 Hawaiian Legislator brought about two important changes. First, with the eventual signing of HB 1520 by Governor Neil Abercrombie, the first step has been taken in making home solar installations more affordable. The bill called for the investigation and possible creation of a system in which residents could finance the expensive up front costs of solar power installations in smaller increments through their electric bills. If the system is eventually enacted, Hawaii would become the second state with such a program, after a similar bill was approved in New York in June, 2011. Second, a change was made to the Kauai Island Electric Cooperative’s (KIUC) net metering program, in which Hawaii Electric Companies (HECO) are now based on per-circuit caps as opposed to a percentage of peak demand, which contained aggregate capacity limits that have now been abandoned. However these are far from the only efforts in effect today to promote solar power usage.
In 1990, Hawaii Energy Tax Credits enacted Solar and Wind Energy Credit, providing corporations with an income tax credit of 35% of the cost and installation charges for a solar thermal or photovoltaic system. In 2003, due to SB 855, there was a revision in Tax Credit and also an extension until 2007. According to SB 3162 in 2004, a taxpayer was allowed to claim a credit exceeding his income tax liability which can be carried forward until it’s exhausted. Later, the State of Hawaii enacted HB 2957 in June of 2006, which removed the credit’s sunset date and increased the maximum credit allowed for some thermal applications. HB 2957 announced the removal of new federal tax credits which were to be deducted from the cost of the system prior to the calculation of state tax credit. Then according to SB 644, solar water heating system owners are no longer required to pay personal tax credit for installations on new home construction after December 2009. Lastly, due to HB 1464, as of January 1, 2010, there are limitations on new residential construction, by either a corporate or personal entity. These limitations include improved efficiency standards in large public buildings and require property owners to disclose energy efficiency information to residential customers before the property’s sale.
In addition to corporations, single family residential property owners can avail a credit of 35% of the cost of solar thermal energy systems or $2,250, whichever is less. For multi-family residential property owners, it is 35% of the cost or $350 per unit. In case of commercial property, the tax credit is 35% of the system cost, or $250,000, whichever is less.
When buying photovoltaic systems, with the Solar and Wind Energy Credit, a single family residential property owner can avail a credit of 35% of the system’s cost or $5,000 whichever is less. For multi-family residential property owners, the credit is 35% of system’s cost, or $350 per unit, whichever is less. Commercial property owners are eligible to claim a credit of 35% of the photovoltaic system’s cost, or $500,000, whichever is less.
High Technology Business Investment Tax Credit, also called Act 221 and enacted in July 2001, allowed 100% tax credits on an equity investment in a qualified high tech business in Hawaii. Qualified high tech business (QHTB) is considered as a business where 50% of the work goes into research activities in the following areas: wind energy, hydropower, solar thermal, ocean thermal energy, geothermal energy, wave energy, fuel energy, landfill energy etc. However, as of a vote on April 27th, 2010, Act 221 was ended early and is no longer currently available. Public opinion has largely against this decision and despite current public efforts to restore this plan, it is unknown if it will be reinstated in the future.
According to Hawaii Revised Statutes (HRS) §46-19.6, every county agency issuing construction and development related permit are required to apply priority processing of permit applications for projects meeting certain green standards, namely a LEED silver rating, two Green Globes rating, or a comparable and nationally recognizable standard. This processing is offered at free of cost. Buildings meeting the energy and environmental standards listed above are only allowed for this processing.
Section 2 of Act 96 signed by Hawaii’s Governor in May 2006, states the requirements of renewable energy and energy efficiency in Hawaii’s public schools. For 2006-2007 fiscal year, $500,000 was allocated for the development of a net-metered, photovoltaic pilot project. These efforts have continued into the present, with the Hawaiian Department of Education awarding its first solar power contract to Hawaii Pacific Solar LLC in May of 2010. With this solar leasing contract, the department expects to save a minimum of $1 million over two years.
Passed in 2006, HRS §196-9 sets the standards to promote energy efficiency for state facilities and operations, motor vehicles and transportation fuels.
Hawaiian Electric Company (HECO) and the City and County of Honolulu jointly started the Honolulu Solar Roofs Loan Program offering low interest loans (0% or 2%) to qualified homeowners of Oahu. Single-family homeowners are entitled to a maximum loan of $80,000 for each dwelling unit and up to four units with a upper limit of $125,000 per property. The funding comes from City’s Rehabilitation Loan Program for the installation of solar heating systems.
Similarly to increase the use of use of renewable energy in Maui County, Maui Electric Company (MECO) and the County of Maui jointly started Maui County – Solar Roofs Initiative Loan Program in September 2002. A rebate of $750 is provided for the installation of solar systems through its approved independent solar contractors. Residential homeowners must provide a down payment equal to 35% of the system’s actual cost. Renters can also apply for this rebate with property owner’s permission. As stated on the MECO website, a typical family of four can generally save up to $50 a month. MECO is entitled for the administration task and all funds are sanctioned by County of Maui.
According to HB 2261, from July 2008, Farmers and Aqua culturists are eligible for the Farm and Aquaculture Sustainable Projects Loans. The projects must involve photovoltaic (PV) energy, hydroelectric power, wind power generation, methane generation, bio-diesel and ethanol production. Through this loan an amount of $1,500,000 or 85% of the project’s cost can be availed. Department of Agriculture is responsible to determine the credibility of the applicant. These loans are in “H” class with an interest of 3%. In case of unpaid principle balance a simple interest is charged.
For the installation of solar watering heating systems or in replacing a system at least 15 years old, the Kauai Island Utility Cooperative (KIUC) provides interest free loans. Kauai Community Federal Credit Union (KCFCU) and Kauai County Housing Agency (KCHA) are responsible for providing the funding. KIUC is responsible for paying the interest and all other administrative tasks. Commercial systems are not allowed to apply for this program.
Rebate programs:
Hawaii Energy Residential Rebates
On July 1, 2009, Hawaii Energy was selected by the Hawaii Public Utilities Commission as the new energy efficiency program for the state. While this does not exclude all programs previous to this, they are now responsible for the following rebates and services. For residential customer on Hawaii, Lanai, Maui, Molokai and Oahu, this includes compact fluorescent light in-store rebates, Energy Star appliance rebates, high efficiency water heater rebates, central air maintenance rebates and solar water heating rebates and free inspection. For business, commercial or industrial utility customers on Hawaii Island, Lanai, Maui, Molokai and Oahu, rebates include standard and custom rebates for qualified energy-efficient technologies. Once requested and approved, rebates will typically arrive in six to eight weeks.
HECO – Energy$olutions for the Home Rebates
Through Energy$olutions program Hawaiian Electric Company (HECO) started offering various incentives mainly for their residential customers. These rebates can be availed against the purchase of solar water heaters, heat pump water heaters, and high efficiency electric water heaters from a participating solar contractor.
HECO, MECO, HELCO – Energy$olutions Water Heater Rebate
HECO, MECO and Hawaii Electric Light Company Inc. (HELCO) jointly approved rebates for solar water heaters, Heat pump water heater and high efficiency Electric Water Heaters under Energy$olutions programs. Funding is available only for retrofitting purposes. Applicants must be a permanent resident for more than year and they must purchase a program-approved model. An amount up to $1,000 can be availed under this utility rebate program. HECO itself provides the list of the contractors participating in the program and its 100-point inspection ensures the HECO’s stringent standards.
HECO, MECO, HELCO – Energy$olutions Business Appliance Rebates and Customized Incentives Program
Commercial and business customers can apply for this utility rebate program which incorporates energy efficiency technologies like solar water heaters, lighting, heat pumps, lighting controls/sensors, heat recovery etc. Rebate amount is calculated on a case-by-case basis and greatly depends on the energy savings of the system and also whether the purchase being made is for retrofitting or new construction. Technologies that do not fit the program’s specific guidelines may fall into the Customized Incentives area, which includes window tinting or air conditioner improvements.
KIUC – Energy Wise Commercial Energy Efficiency Program
Commercial, nonprofit and government customers of Kauai Island Utility Cooperative, a Touchstone Energy Cooperative are eligible to avail funding for installation of energy efficient equipment under this utility rebate program. KIUC’s Commercial Energy Services Representatives conduct a survey to identify provision for equipment replacement. After identification and verification of energy-saving measures KIUC releases an incentive payment.
KIUC – Solar Water Heating Rebate Program
This Commercial Energy Wise Program was started in 1998 by Kauai Island Utility Cooperative. This utility rebate program is applicable in both commercial and residential sectors. An analysis and screening for cost effective energy devices like solar water heating systems are issued. Under residential program an amount of $800 can be availed for each solar system and for commercial use, 50% to 80% of the equipment costs can be availed.
