Hawaii State Solar Power Rebates, Tax Credits, and Incentives
With all of the recent speculation on what Hawaii would look like under a few feet of water, the move to adopt more environmentally friendly forms of energy has gained considerable momentum there. Under the Hawaii Global Warming Solutions Act, the state has plans to cut greenhouse gas emissions to 1990 levels by 2020. To make this big plan a reality, the state is literally giving money to small businesses, residences, farmers and ranchers who invest in technology to reduce their oil dependence (Hawaii’s current energy system is 91 percent dependent on oil and the price of crude went up to 80 bucks just the last week).
Here’s a rundown of state incentives available to Hawaiian businesses and residences looking to lessen their carbon footprints and electric bills:
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Residential Rebate Program
The Residential Energy $olutions program for solar water heater rebates offers $1,000 for retrofits or systems installed on new construction in the service territory of HECO, MECO or HELCO.
Example residential solar water heater install:
| Average Cost of solar water heating system | $5,250.00 |
| Less Instant Hawaiian Electric Rebate | -$1,000.00 |
| Customer Payment to the Contractor | $4,250.00 |
| Federal Tax Credit (30%)($4,250 X 30%) | -$1,275.00 |
| State Tax Credit (35%)($4,250 X 35%) | -$1,488.00 |
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| NET SYSTEM COST TO CUSTOMER | $1,487.00 |
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Here, you might say, “Whoa, $4,250 is a lot to have to pay up front for savings of $50 a month! Why would I wanna do that?” Again here though, you can qualify for a 60 month ZERO interest loan on this equipment! Your down payment will be absorbed by your federal and state tax credits! YOU CAN DO THIS! Here’s what it would look like:
| $5,250 | Typical SWH system cost. (Varies by family size, hot water use, system type, and geographic area) |
| -$1,000 | Maui Electric Company rebate paid to participating solar contractors. |
| -$1,488 | Typical down payment (35% of $4,250 = $1,488, paid by you to solar contractor) |
| (You can recover this amount through the state and/or federal tax credit) | |
| $2,762 | Your loan amount. (Billing will be separate from electric bill) |
| $46.03 | Your monthly payment (Paid off in 5 years) |
| ~$50.00 | Your monthly savings (immediate after install) |
| TAX CREDITS | |
| $1,488 | State tax credit of 35% (max of $2250). Consult with your tax professional. |
| $1,275 | Federal tax credit of 30% (max of $2000). Consult with your tax professional. |
| SUMMARY | |
| Awesome | $1,488 out of pocket for loan, $2,763 ($1,488 state + $1,275 federal) back in your pocket after tax cycle, $4 a month savings until year 5, >$60 a month savings after year 5 (loan is paid off and energy prices have increased a bit). TOTAL SAVINGS PER YEAR AFTER YEAR 5: $720 |
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So for less than $50 a month ($2,762/60 = $46.03), you can pay off your loan in 5 years. You also recoup your down payment the first tax cycle with a nice federal and/or state tax credit! Awesome! Keep in mind, if you’ve got a family of four, you are going to save roughly $50 a month in water heating costs anyway so the system can actually pay you about $4 a month right after hookup! Afrer 5 years, your loan is all paid off and the system now saves you more than $60 a month (accounting for energy price increases)!
Here are lists of participating contractors that have agreed to comply with rigorous Hawaiian standards regarding equipment use and installation:
Always call a few contractors to come out and bid on your project!
Call 1-888-MECO SUN (1-888-632-6786) for an application or more information.
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Commercial Rebate Program
The Commercial Energy $olutions rebate for solar water heaters is offered as a custom incentive on a case-by-case basis to HECO, MECO and HELCO customers. Commercial customers receive $125 per deferred kilowatt (kW) that is coincident with peak electric demands, plus $0.05 per kilowatt-hour (kWh) for retrofits and $0.06 per kWh for new construction, based on estimated annual energy savings calculated at time of installation.
This is all really great, but in addition, MECO, HECO, and HELCO are equipped to provide design assistance and energy reduction incentive payments that help purchase solar systems in the first place! Wow!
Here’s a form that can help you calculate your specific rebate as a business.
Tax Credits
In the examples above, there were state tax credits shown. Here are the specifics of those incentives:
For solar thermal energy 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;
- 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;
- 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.
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Honolulu Million Solar Roofs Loans
The Honolulu Solar Roofs Loan Program is made possible through a partnership between Hawaiian Electric Company (HECO) and The City and County of Honolulu. The program offers low-interest loans (0% or 2%) to income-qualified homeowners on the Island of Oahu for the installation of solar water heating systems through the City’s Rehabilitation Loan Program. The contract occurs between the City and County of Honolulu, who provides the funding, and the customer with HECO facilitating the installation of the solar hot water heaters.
The low-interest loans are available for single-family homes, condominiums, and coops. The maximum loan is $80,000 for each dwelling unit for owner-occupied properties up to 4 dwelling units not to exceed $125,000 per property. For all other properties, the maximum loan amount is determined by a formula. Most solar hot water heater installations cost approximately $4,000 to $5,000. Loans will be secured by a promissory note and a mortgage on the property.
Qualification is dependent on income level (guidelines available on program website). Landlords must rent their properties to tenants who fall within the income limits set by the City. Visit the City and County of Honolulu FAQ website for more qualification guidelines.
For more information, check out the City and County of Honolulu website to download an application.
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Maui Million Solar Roofs 0% Solar Loans!
Maui County’s Solar Roofs Initiative Program provides for interest free loans for those who want to install a solar water heater! In a joint effort between Maui County and Maui Electric Company, loan recipients are also eligible for a $1,000 discount.
What about Kauai? They got a nice program too! Through a partnership with Kauai Community Federal Credit Union (KCFCU) and Kauai County Housing Agency (KCHA), the Kauai Island Utility Cooperative (KIUC) also provides qualifying members with interest-free loans for solar water heating systems. KCHA, through funding from the Community Development Block Grant Program, and KCFCU provide funding for the loans. KIUC pays the interest, markets the program and verifies that systems will meet Energy Wise program standards for sizing and installation.
Participants pay the loan back to the lender with 60 monthly payments (no down payment is required). KIUC pays the interest on the loan directly to the lender for the customer. Participating members also make their monthly payments directly to the lender. There is no maximum loan amount, however commercial systems are not eligible.
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USDA Loans and Grants (Need to meet “rural” specs.. e.g., Molokai)
- To qualify as a small business, a company must have fewer than 500 employees and make less than $6 million a year.
- Grants can only constitute 25 percent of the project, and must range between $2,500 and $500,000 for renewable energy projects and $1,500 and $250,000 for energy efficient improvements projects. Any renewable energy project under $10,000 means that the farmer in question has to foot the bill.
- As for loans, they can make up no more than 50 percent of a project’s total cost and must range between $5,000 and $10,000,000.
- Eligible renewable energy systems include biomass, wind power, solar power, an anaerobic digester (which converts things like livestock waste into energy), and geothermal power.
For details on project and applicant eligibility, application procedures, required forms and other useful information to assist you in the application process, click here.
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Consensus
Hawaii definitely has a lot of incentives to get moving with solar power. They’ve got bold plans for energy efficiency and the state is really putting money where its mouth is in terms of reducing reliance on outside oil. Other states could learn quite a bit from Hawaii’s plans and incentives for businesses and homeowners.
Click here to get hooked up with a local solar installer for your home or business
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