As state lawmakers search for savings in the budget, Hawaii’s photovoltaic companies and solar operators are hoping tax credits for some renewable energy projects are left untouched.

“Keeping certainty on tax credits and state policy around credits is really essential,” David Bissell, CEO of the Kauai Island Utility Cooperative, said during a legislative energy briefing Friday.

Leaders in Hawaii’s energy sector are hoping lawmakers don’t yank solar credits that have been key to developing renewable energy projects. Nathan Eagle/Civil Beat

Those tax credits can help spur development of solar projects both big and small. That was the goal when the Legislature took up the issue in the early 2000s. But the credits also have the potential to eat a chunk of the state’s budget.

In 2017, the refundable Renewable Energy Technologies Income Tax Credit cost the state $48 million, of which $39 million went to corporations, according to a 2020 report from the state Department of Taxation.

With the state facing a historic budget deficit, lawmakers may consider phasing out the tax credits.

Rep. Nicole Lowen, who chairs the House Energy and Environmental Protection Committee, supports keeping the credit but said she is unsure what support there is in the Legislature for not winding down the incentive.

She said while it’s been useful for early adopters, she would still like to see more families benefit from the credit by installing rooftop solar panels. Lowen noted that it is unusual for a tax credit not to have an end date set in the law, and expects the issue to be discussed during this legislative session, which begins Wednesday.

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