Hawaii lawmakers face backlash over proposed repeal of solar tax credits

The Hawaii Legislature held a public hearing on February 19, 2025, focusing on proposed changes to tax credits, particularly those related to renewable energy. The discussions highlighted significant opposition to the repeal of the solar tax credit, which many stakeholders argue is crucial for maintaining Hawaii's clean energy goals and supporting local businesses.

Key testimonies came from various organizations, including the Hawaii Solar Energy Association and the Hawaii Renewable Fuels Coalition, both of which expressed strong opposition to the proposed repeal. They emphasized that the solar tax credit has been instrumental in reducing energy costs for residents and businesses, aligning with the state's commitment to achieving 100% renewable energy. The repeal, they argued, would hinder economic growth, job creation, and the transition to clean energy, especially in light of uncertainties at the federal level.

Several local businesses and advocacy groups underscored the tax credit's role in making solar energy accessible to lower-income households. Testimonies highlighted that removing the credit could disproportionately impact smaller, local solar companies, while larger national firms might better absorb the financial blow. The consensus among opponents was that the tax credit not only benefits individual homeowners but also contributes to broader economic resilience and environmental sustainability.

In response to questions from committee members, representatives from the Department of Taxation acknowledged that while higher-income households have historically claimed a larger share of the tax credits, efforts are underway to ensure that low- and moderate-income families can also benefit. However, the lack of detailed data on tax credit distribution among different income brackets raised concerns about equitable access.

The hearing concluded with a call for further discussions on refining the tax credit system rather than outright repeal. Stakeholders urged lawmakers to consider the long-term implications of such decisions on Hawaii's energy future and economic stability. The committee is expected to continue deliberating on the proposed measures, weighing the potential impacts on both the environment and the local economy.