Benefits of Hawaii Solar Tax Credit
Hawaii relies on imported oil for more than 90% of our energy needs, which drives the cost of living up quite significantly. This dependence places Hawaii’s economic future at the mercy of the ever-increasing, volatile cost of oil. Electricity in Hawaii is already the highest in the nation, over 112% more than New York who ranks second for most expensive electric rates.
Recognizing the need for a cleaner, more stable tomorrow, the State launched the Hawaii Clean Energy Initiative with the goal of making Hawaii’s energy use 70% renewable by 2030. With this initiative, came Hawaii solar tax credits to further promote the installation of solar hot water heaters and photovoltaic (PV) systems.
In 2002, Dr. Thomas Loudat, former University of Hawaii economist, was asked to study how Hawaii’s solar tax credits impact Hawaii’s economy. The updated 2012 findings confirm how the tax credits are paying off. Here are the highlights:
• Since each PV system will continue generating electricity year after year, the state will continue to reap benefits long after the tax credit is issued.
• For every dollar the state invests as a solar tax credit, it turns into $44 or more that circulates into Hawaii’s economy.
• Even if the cost of oil remains the same over the next 30 years (which we know is highly unlikely), Hawaii would still get a 10.3% ROI.
• Hawaii’s solar industry accounts for 15% of all construction expenditures in the state.
• Over its 30-year lifetime, a single 5.27 kW residential PV system yields 3.2 new local jobs per year amounting to $106,000 in local labor income and $20,010 additional tax revenues.
• Over its 30-year lifetime, a single 118 kW commercial PV system yields 2.7 new local jobs per year amounting to $2.6 million in local labor income and $485,000 additional tax revenues.
Hawaii’s solar tax credits help us to keep money here where it belongs. Dr. Loudat’s research proves that it is a smart investment that continues to give back by providing local jobs, yielding additional sales and tax revenue, and creating a renewable, dependable source of energy for Hawaii.