Monday, May 06, 2013

Shock: Solar tax credit is abused in Hawaii, and could cost the state $2.1 billion without a policy change

States: Spurt in Hawaiian solar use leads nation, but conflict threatens program -- 05/06/2013 --
The state gives roughly the lesser of 35 percent of costs or $5,000 for a residential system and $500,000 for a business-sized project. But that incentive came under fire last year amid charges that it was being abused. Some households and businesses were claiming the benefit multiple times for the same location.
The future of Hawaii's solar tax credit isn't clear. Problems arose with it because the state awarded benefits per "system." Some companies and residents counted each connection to an inverter as a separate system and claimed the tax benefit for each.

The state in 2007 had said that was allowable, said Robert Harris, executive director of Sierra Club Hawaii. But state Sen. Sam Slom (R) said people exploited the credit.

"I have friends in the solar industry, they admit it, that there were abuses," Slom said. "They would break projects up into segments and get credit for each one."

The benefit cost Hawaii $65.4 million in 2011, based on tax returns. There were projections it would grow to $170 million last year, an estimate based on permits taken out. An analysis from the Economic Research Organization at the University of Hawaii forecast it could swell to $2.1 billion without a policy change.

1 comment:

chris y said...

Why does Hawaii need any solar subsidies? Residential electric rates are 42 cents/kWhr and solar insolation averages 5.7 kWhr/day/m^2. Its the perfect storm of high electric prices and lots of sunshine that should make solar PV a no-brainer.