The County Council will soon be considering a bill eliminating a tax break for property owners who install solar hot water panels on their property.
Bill 28, sponsored by Hilo Councilman Aaron Chung on the recommendation of the Real Property Tax Review Working Group, is likely to come up when the council meets early next month.
The solar water tax credit is one of three tax programs the working group recommended be eliminated. One, reclassifying to residential small agriculture lots of less than 1 acre that weren’t doing agriculture, was accomplished administratively.
The third, doing away with a tax exemption program known as the “non-speculative residential” program, is currently making its way through the council.
The solar program, which started in 2008, offers a one-time, up to $300 credit off property taxes for those installing a solar water heater. It applies only to retrofitting existing homes, as all new buildings have been required to have solar hot water installed since 2012.
“It was recommended by the working group (to abolish it). In the past that exemption was used as an incentive for people to use that type of water heating but now its required by the building code, there’s no reason to provide an incentive,” Chung said.
He said if there remains a need for it, for retrofitting existing homes, for example, it could be discussed.
“If people, our experts, the people who work with this all the time are recommending removing it, we should at least bring it up for discussion,” Chung said.
The county will continue not assessing the value of solar water improvements when it applies property taxes, just as it does with photovoltaic cells for electricity, which carry no county tax credit.
For the current tax year, the tax credit was provided to 93 parcels and resulted in $27,692.80 in savings for participants, said Keita Jo, assistant real property tax administrator.
Solar installer John Collins with Grand Solar Inc. said losing the county tax credit on top of ever-declining rebates from the electric company could lead fewer people to hook up to the energy-saving solar water systems.
“It doesn’t make sense to me during these COVID-19 hard times, that instead of helping people out by increasing rebates we are reducing rebates,” Collins said Friday. “Net result is less affordable solar systems which guarantees continued high electric bills for people who can’t afford it and less solar will be installed.
”You would think the county and Hawaiian Energy would be aligned with meeting the state’s goal of 100% renewable energy generation by 2045,” Collins added. “Come on, let’s all get on the same page.”