Hawaiʻi families already pay the highest electricity rates in the nation. This week, the Legislature may decide to make it worse.

In a conference committee deal last week, House and Senate negotiators agreed to immediately gut and then eliminate the Renewable Energy Technologies Income Tax Credit — the state’s primary support for rooftop solar and energy storage. The credit will be capped immediately, an effective 60% to 70% cut. Then it disappears entirely after 2030.

This is being framed as a responsible tradeoff: sacrifice the solar tax credit to fund income tax relief for lower- and moderate-income residents. That framing is misleading. The RETITC is one of the most effective tools available for households across the income spectrum to permanently lower their electricity bills and for Hawaiʻi to stabilize high electricity prices across the board.

Ideas showcases stories, opinion and analysis about Hawaiʻi, from the state’s sharpest thinkers, to stretch our collective thinking about a problem or an issue. Email news@civilbeat.org to submit an idea or an essay.

Read More

Eliminating it does not improve affordability. It locks families and businesses more deeply into costs they cannot control and devastates Hawaiʻi’s ability to transition away from volatile, high-cost fossil fuels.

The Worst Possible Moment

Hawaiian Electric Co. recently announced electricity prices will rise as much as 30% this billing cycle, with the potential to go even higher. Hawaiʻi’s grid depends on oil shipped across the Pacific, and when global fuel prices spike — as they have with the ongoing conflict with Iran and the closure of Strait of Hormuz — Hawaiʻi families pay. Rooftop solar paired with battery storage is the most effective hedge available against exactly this kind of shock.

It also allows families and businesses to keep the lights on during grid outages, such as those we experienced with the recent Kona low storms. This is the moment to expand our resilience, not eliminate the policy that makes it accessible.

And this blow does not land in isolation. The federal government has already eliminated key solar tax incentives. Hawaiʻi’s market was already absorbing that hit.

Now the Legislature has decided to deliver another one. This compounds the damage, sending a single unambiguous signal: Hawaiʻi’s leaders are no longer committed to resilience, affordability and revitalizing our economy for the future.

What The RETITC Actually Does

Families with solar have been able cut their electricity bills by hundreds of dollars per month. With each installation, Hawaiʻi’s grid becomes cleaner and more resilient — community by community, rooftop by rooftop.

Rooftop solar covers close to half of all households statewide. This reduces demand on the utility grid and creates downward pressure on rates for all customers, including renters and lower-income families who have not yet been able to install their own system.

There is also a fiscal case the Legislature has ignored. The Renewable Energy Technologies Income Tax Credit does not simply cost the state money — it “crowds in” private investment much larger than the credit itself, generating general excise and income tax revenue across the supply chain. By reasonable estimates, the credit pays for itself and then some. Eliminating it in the name of fiscal responsibility may actually reduce net tax revenue.

Taking the credit away trades a durable solution to high energy costs for temporary relief, while increasing long-term costs and risks for the very families the Legislature says it wants to help. Broad cuts will reduce installations across the board and fall hardest on the households least able to absorb it.

What Comes Next

Legislators should vote no on this measure. And if it reaches his desk, Gov. Josh Green should veto it.

We understand the state faces real budget pressures and that helping working families make ends meet is the right goal. But this is the wrong tradeoff — one that will do more damage to those same working families over time.

We also understand this is a genuinely difficult choice. Rejecting this measure may require revisiting the state budget, potentially through a special session. That is a real cost. But it is smaller than what Hawaiʻi families and businesses will pay in higher electricity bills, fewer local jobs and greater exposure to oil price shocks for years to come.

Dismantling a policy that has been steadily making Hawaiʻi’s energy future more affordable, more resilient and more economically dynamic moves us in the wrong direction.