Hawaii's Booming Solar Industry In Uproar Over New Tax Credit Rules

Courtesy of Marco Mangelsdorf

New rules issued by the Hawaii Department of Taxation last week aimed at clarifying how solar tax credits should be calculated are pitting solar companies against each other, angering environmental groups and forcing legislative leaders to grapple with how to manage an increasingly hostile debate this upcoming legislative session.

The tax department’s new rules effectively restrict the number of tax credits that homeowners and solar companies can claim on solar arrays.

The tax department, which has raised concerns in the past about solar owners gaming the system to claim more credits than intended, says the rule changes are necessary to clarify confusion in the existing tax instructions.

“We have gotten thousands of calls over the past year asking for assistance,” Mallory Fujitani, a spokeswoman for the tax department, told a group of lawmakers, energy executives and policy advocates who convened at the State Capitol on Tuesday as part of a legislative working group. “Tax preparers say the (past) guidance doesn’t help them. They are unable with certainty to know that it’s calculated correctly.”

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