In June 2009, Hawaii Governor Linda Lingle signed legislation SB 644, which requires all single-family homes constructed January 1, 2010 and onward to have solar hot water-heating (SHWH). If the home construction plan does not include a SHWH system, a building permit will not be issued — simple as that.

The bill is one of two that have created a number of changes in Hawaii’s tax credits for buyers of energy-efficient technologies.

HB 1464, for instance, is a Hawaii energy bill designed to encourage the use of renewable energy. It calls for expanding the duties of the energy resources coordinator and requiring sellers to provide electricity-cost information, among other aims.

But there’s a flip side to the bill. While requiring new homes to include a SHWH system with bill SB 644, Hawaii rescinded the tax credit on residential SHWH installations added to new-construction homes with building permits dated December 31, 2009 or later. According to the Database on State Incentives for Renewables & Efficiency, “SB 644 discontinued the personal tax credit for solar water heating installations on new home construction after December 31, 2009. This legislation also disallowed residential home developers to take the tax credit for solar water heating installations in 2009.” Given that SHWH systems are relatively affordable and receive a 30-percent tax credit from the federal government, this seems to make good policy sense.

Wind energy systems and solar electric (photovoltaic, or PV) systems may be used to meet the SHWH requirement by receiving what the state calls a “variance.” But, again, there’s a catch. Wind systems that receive a SHWH variance are not eligible for the tax credit, which otherwise would equal 20 percent of costs. Meanwhile, PV systems that receive a variance are eligible for a reduced tax credit worth up to $2,500 — half the normal maximum amount of $5,000. Bottom line: the state is trying to dissuade builders and new homeowners from using wind and solar PV systems to meet the SHWH requirement.

Both HB 1464 and SB 644 are part of the Hawaii Clean Energy Initiative, a memorandum signed by the state and the U.S. Department of Energy in January 2008. The initiative was spurred by research showing Hawaii’s electricity consumption had risen 3.9 percent from 2005-2008, but expenditures increased 56.8 percent over the same period of time. The intent is to accelerate the development of energy-efficient and renewable energy technologies, with the final goal of meeting 40 percent of Hawaii’s energy needs with clean energy by 2030. To this end, the state is also rolling out a solar feed-in tariff, which remains a work in progress.