Hawaii, land of volcanoes, waterfalls and immense beauty, is taking steps to become the most energy-independent state in the U.S. through an ambitious partnership with the Department of Energy (DOE). Under the partnership, DOE and Hawaii established the Hawaii Clean Energy Initiative. And it couldn’t have come at a better time. Since Hawaii traditionally has relied on expensive diesel imports to generate electricity, it has the highest electric costs in the U.S. In fact, in 2012 it became the first state to reach parity with solar. Through the initiative and other incentives like tax credits, a feed-in tariff, existing net-metering program, and low-interest loan programs, Hawaii is helping its residents make the transition to solar and its renewable cousins. The state also offers rebates for solar hot water systems.
Under the clean energy initiative, DOE will help Hawaii’s smaller islands transition to 100 percent renewables by 2030. Across all the islands Hawaii will attempt to drastically reduce its consumption of petroleum—by about 72 percent—and plans to have 40 percent of its energy coming from renewable resources like solar, wind and ocean power by 2030.
The state still has a long way to go. As of 2010, 90 percent of the island state’s energy comes from petroleum, with three quarters of the state’s energy being generated by primarily petroleum power-plants, according to the DOE’s Energy Information Administration. While coal powers most of the United States, transporting coal to Hawaii via ship, would likely be prohibitively expensive, compared to shipping petroleum to the state.
The state already is a leader in the nation when it comes to solar-water heaters. As of 2010 the state already had 80,000 solar water heaters installed. And, thanks to the 2008 Solar Roofs Act, most new homes in the state are required to have solar water heaters as well.
Given Hawaii’s subtropical environment with mild year-round temperatures, energy use is lower in the state than in most other states. And because of its location in the Pacific, the state has vast potential for different types of renewable energy, including solar, geothermal (it is built on volcanoes after all), wind, and ocean power.
The U.S. Department of Energy's Alternative Fuels Data Center (AFDC) provides information, data and tools to help fleets and other transportation decision-makers find ways to reduce petroleum consumption through the use of alternative and renewable fuels, advanced vehicles, and other fuel-saving measures.
The U.S. Department of Energy's Green Power Network provides news and information on green power markets and activities, including opportunities to buy green power. This site provides state-by-state information on green power marketing and utility green power programs. In addition, the site lists marketers of renewable energy credits (RECs), also known as green tags or renewable energy certificates, which represent the environmental attributes of the power produced from renewable energy projects.
The U.S. Department of Energy's Weatherization Assistance Program (WAP) enables low-income families to reduce their energy bills by making their homes more energy-efficient. Through this program, weatherization service providers install energy-efficiency measures in the homes of qualifying homeowners free of charge. The WAP program web site offers a state-by-state map of opportunities, projects and activities.
The U.S. Department of Energy's Wind Powering America site provides state-by-state information on wind projects and activities, including wind working groups, validated wind maps, anemometer loan programs, small wind guides, state-specific news, wind for schools, workshops and web casts.
Hawaii has offered this renewable energy state tax credit to residents and businesses since 1976, though the amounts and terms have changed over the years. The tax credit is for the year the system was purchased and installed. It is only available to the purchaser of the system. So, if a developer builds 10 homes and pays for photovoltaics (PV) or solar water on each, the developer is considered the purchaser and eligible for the credits. But if the developer offers a system as an add-on, for which the buyer must pay extra, or if a homeowner contracts to have a system installed on their home, they are the beneficiary of the credit.
As of 2010, single family homes are eligible for a tax credit of 35 percent of the actual cost of the solar system and installation or $5,000 (whichever is less) for installing a PV or solar thermal energy system. Multi-family residential properties like condominiums or apartment buildings are eligible for a credit of 35 percent of the actual cost of the system and installation $350 per unit (whichever is less).
Credits are given for each fully individual system with inverter(s), renewable energy equipment, whether it be photovoltaics or wind, and the connection to the electrical system. If a homeowner has two fully independent PV arrays, each tied independently to the home’s electrical system, the system is eligible for two credits. Similarly, if a homeowner’s farm has two separate systems installed, both would be eligible for the credit. The state recently clarified requirements because of credit abuse.
The tax credit also is offered for solar hot water installations, though residential homeowners can only qualify for a credit of up to $2,250 or 35 percent of the cost of equipment and installation, whichever is less. Multi-family residences qualify for a credit of 35 percent of the cost of equipment and installation or $350 per unit, whichever is less. In 2010 the state disallowed the credit for installations of solar hot water heaters on newly constructed homes.
Hawaii’s net-metering rule is in flux. The state is transitioning to a state-wide feed-in tariff performance-based incentive system for grid-tied solar and renewable generators. While the net-metering rule is in place, already at least one utility, Kauai Island Electric Cooperative, had reached it’s net-metering capacity as of October 2012. And others are moving to the feed-in tariff as required.
Under the net-metering law each utility had to develop a pilot program allowing net metering to a limited number of systems 100 kilowatts to 500 kilowatts in capacity, while allowing for larger systems. Under the net-metering law a customer whose system produces more electricity than they consume within a month (net-excess generation or NEG) is carried forward in the form of a kilowatt-hour (kWh) credit applied to the customer's next bill. The NEG may be carried over for a maximum of 12 months. At the end of the 12-month period, any remaining customer NEG credits are surrendered to the utility without compensation (unless the customer enters into a purchase agreement with the utility).
The Solar Water Heater Rebate is offered through Hawaii Energy, a public benefit fund administered by a third-party. The incentive is a one-time $750 rebate for residents and companies that install a solar water heating system on their building. It is limited to the islands of Oahu, Hawaii, Maui, Lanai and Molokai. The rebate itself is applied by a participating contractor at time of sale. The program maintains a list of participating providers at its website.
The rebate was instituted in 1996 and has helped more than 50,000 solar hot water systems get installed on the Hawaiian islands of Oahu, Maui, Lanai and Molokai. The program was managed by the utilities, but in July 2009, it was transferred to the Hawaii Energy. As of Jan. 1, 2010, newly constructed homes were no longer able to qualify for the rebate. Now homeowners can choose to participate in the interest rate buy-down program instead of receiving the rebate. Through this program, Hawaii Energy pays $1,000 to participating financial institutions, reducing the cost of financing to the homeowner.