A bill increasing the tax credit for eligible homeowners who install a solar water heater will be heard Tuesday by the County Council Finance Committee.
Bill 227 would increase the tax credit from $300 to $400 for owners of single-family dwellings, ohanas, farm dwellings and duplexes.
Only homes built before the 2010 state law mandating new construction include solar water heater systems will be eligible for the credit, which will be offset against real property tax liability for the tax year immediately following approval of the application for the tax credit.
“The real property working group makes recommendations regarding our real property taxing system,” said Hilo Councilman Aaron Chung, the bill’s introducer. “One of the recommendations they have been making for many years was to get rid of the solar water heating credit because it’s required for new construction anyways.”
But when it became required for all new construction by the state, the working group felt there was no reason to give any incentives.
“I had introduced a bill before following the guidelines of what the working group wanted but when it hit the floor, and after listening to testimony and using our own good judgement it seemed like it needed some tweaking,” he said. “It did away with the credit for everybody but it didn’t take into consideration that we still might want to provide an incentive for people to convert from their present system. So that’s what this bill does.”
According to Hawaii Energy, a solar water heater can save customers up to 40% on an electric bill.
In addition, installation of a new system is eligible for a 26% federal tax credit and a 35% state credit for 2022.
“We figured we could give people a little more incentive by giving them $100 more. We are taking away the tax credit from new construction, because they don’t need the incentive,” Chung said.
The Finance Committee meets at 1 p.m. Tuesday in Council Chambers at the West Hawaii Civic Center in Kailua-Kona. Written testimony is due by noon Monday, which is also the same deadline to sign up to testify via Zoom on the matter. Testimony can also be made in-person at the West Hawaii Civic Center, and Council Chambers in Hilo, Pahoa Council Office and Waimea Council Office.
The meeting will also be livestreamed for public viewing online at hawaiicounty.gov.