RELATING TO TAXATION.

HB513

HOUSE OF REPRESENTATIVES

H.B. NO.

513

THIRTY-THIRD LEGISLATURE, 2025

STATE OF HAWAII

A BILL FOR AN ACT

relating
to taxation
.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

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SECTION 1.
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The legislature finds that Hawaii consumers pay the highest electricity
rates in the nation, averaging over $0.40 per kilowatt-hour.
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Despite high costs, consumers have
experienced lapses in service reliability, growing the appeal of separating
their energy sourcing from the grid.

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The legislature also finds that Hawaii has
one of the highest rates of rooftop solar adoption in the country, with about
one-third of single-family homes having rooftop solar, though a smaller
percentage have also installed battery storage to store captured energy.

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Accordingly, the purpose of this Act is to
incentivize the addition of battery storage to existing solar photovoltaic
systems.

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SECTION
2
.
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Section
235-12.5, Hawaii Revised Statutes, is amended by amending subsection (a) to
read as follows:

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�235-12.5
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Renewable energy technologies; income tax
credit.
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(a)
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Each individual or corporate taxpayer that files an individual or
corporate net income tax return for a taxable year may claim a tax credit under
this section against the Hawaii state individual or corporate net income
tax.
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The tax credit may be claimed for
every eligible renewable energy technology system that is installed and placed
in service in the State by a taxpayer during the taxable year.
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The tax credit may be claimed as follows:

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(1)
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For each solar energy system:
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thirty-five per cent of the actual cost or
the cap amount determined in subsection (b); provided that:

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(A)
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For taxable years beginning after
December 31, 2019, and except as provided in subparagraphs (B) and (C), no tax
credit may be claimed for a solar energy system that is five megawatts in total
output capacity or larger and requires a power purchase agreement approved by
the public utilities commission;

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(B)
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A solar energy system that is five
megawatts in total output capacity or larger, installed and placed in service
pursuant to a power purchase agreement approved or pending approval by a
decision and order by the public utilities commission prior to December 31,
2019, shall continue to receive a tax credit equal to thirty-five per cent of
the actual cost, or $500,000 per solar energy system that has a total output
capacity of at least one thousand kilowatts per system of direct current,
whichever is less; [
and
]

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(C)
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For each solar energy system integrated
with a pumped hydroelectric energy storage system, the tax credit may be
claimed for thirty-five per cent of the actual cost or the cap amount
determined in subsection (b), whichever is less; provided that applicable
project approval filings have been made to the public utilities commission by
December 31, 2021; [
or
]
and

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(D)
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For taxable years beginning after
December 31, 2025, an existing solar energy system being retrofitted to include
a battery storage system, may receive a tax credit equal to thirty-five per
cent of the actual cost, or $500,000 per solar energy system, whichever is
less; or

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(2)
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For each
wind-powered energy system:
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twenty per
cent of the actual cost or the cap amount determined in subsection (b),
whichever is less;

provided further that multiple owners of a single system shall
be entitled to a single tax credit; and provided further that the tax credit
shall be apportioned between the owners in proportion to their contribution to
the cost of the system.

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In the case of a partnership, S
corporation, estate, or trust, the tax credit allowable is for every eligible
renewable energy technology system that is installed and placed in service in
the State by the entity.
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The cost upon
which the tax credit is computed shall be determined at the entity level.
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Distribution and share of credit shall be
determined pursuant to administrative rule.
"

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SECTION
3.
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Statutory material to be repealed is
bracketed and stricken.
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New statutory
material is underscored.

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SECTION 4.
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This Act, upon its approval, shall apply to
taxable years beginning after December 31, 2025.

INTRODUCED BY:

_____________________________

Report Title:

Tax
Credit; Solar Panel; Battery; Infrastructure; Grid Resilience

Description:

Expands
the existing renewable energy technologies tax credit to cover claims made
after 2025 for solar energy systems integrating battery storage or existing
systems that are retrofitted to include battery storage.

The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.