Sunshine Law

Hawaii has passed a new solar-power mandate. What will it mean for you?

While on a flight from Kauai to Honolulu, state Sen. Gary Hooser had an idea. “I looked at all of the empty roofs and it just dawned on me, why not require solar hot-water heaters just like we require flushing toilets or fire alarms?” recalls Hooser, a Democrat who represents Kauai and Niihau. He couldn’t shake the notion and, in June, after four years of discussions, Gov. Linda Lingle signed into law a bill that requires all single-family homes built after Jan. 1, 2010, be equipped with solar or other energy-efficient hot-water systems. The mandate is the first of its kind for any state.

Hooser calls the measure a “no brainer,” with regard to increasing energy prices, global warming and our dependency on imported oil. Not everyone agrees.

Currently, when a solar hot-water system is installed, the homeowner receives a 35 percent state tax credit. Once the law goes into effect, existing homeowners will still get the credit, but, for new homes built after 2009, the credit will not be available.

Other changes may be ahead, too. According to HECO, the 30 percent federal tax credit is set to expire at the end of 2008, and it’s uncertain whether or not it will be extended. HECO’s $1,000 rebate program will continue through June 2009, until a third-party administrator—who may or may not offer that particular rebate—takes over. Rick Reed, president of the Hawaii Solar Energy Association, which opposed the bill, says, “If the Feds fail to act, the new Hawaii homebuyer in 2010 will bear the full cost of a system that is now cost-shared by the state of Hawaii, utility companies and the federal government. This is a significant change in the policy compact … that has made Hawaii the national leader in solar water heating installations.”

Hooser says that, although it costs $5,000 to $7,000 to install a hot-water system in a new home, this expense will be part of a mortgage, and that the electricity savings reduce the cost of owning a home by $500 to $600 annually. “This is money that will go back into the local economy rather than be spent on an electric bill and effectively exported to purchase oil to generate electricity,” says Hooser. “When multiplied over the approximate 5,000 new homes built in Hawaii every year, the economic benefits are significant.”

Jeff Mikulina, director of the Sierra Club, backed the bill, stating in a recent newsletter, “The Solar Roofs law is expected to reduce greenhouse gas emissions by upwards of 10,000 tons annually from avoided electricity use.” He adds that, although this is a first for the United States, Israel and Spain also require that all new homes be equipped with solar hot-water heaters.

Bottom line: If you own a home and are thinking about switching to a solar hot-water heater, this is the year to act if you want to maximize your tax and rebate options.