Kamaaina Plumbing and Home Renovations wants to make sure you maximize all of the available tax credits and rebates for your home improvement project, so we've outlined the current Hawaii and federal tax credits below. If you have questions or need clarification, feel free to contact our friendly Kamaaina Plumbing customer service staff.
TAKE ADVANTAGE OF SOLAR TAX INCENTIVES FOR YOUR BUSINESS
The combination of Hawaii's Federal and State tax incentives, high electricity rates, and our state's natural abundance of sunshine make investing in photovoltaic solar systems for your business an economic opportunity and can amount to a 90% reduction in a business's initial solar investment. Combining tax incentives with the energy savings of a solar system, most business solar systems can pay for themselves within 2-3 years.
FEDERAL SOLAR TAX INCENTIVES and REBATES
Investment Tax Credit (ITC)—The ITC allows businesses to take 30% of the installed cost of your PV system as a non-refundable credit against your overall tax liability. The credit is uncapped and can roll forward up to 20 years or back one year. Starting in the 2017 tax year, the ITC drops to 10%. Modified Accelerated Cost Recovery Program (MACRS)–Under the MACRS accelerated depreciation schedule you can write off 85% of your total project cost over six years. An additional "bonus depreciation" provision allows 60% of that adjusted cost basis amount to be taken against your taxes in Year 1. By providing this opportunity to accelerate the loss, the government is encouraging businesses to purchase capital equipment now instead of later.
STATE SOLAR TAX INCENTIVES
The state of Hawaii offers the Renewable Energy Technologies Income Tax Credit (RERITC) with two different options:
Option 1—Non-Refundable Credit— This credit is worth 35% of the installed cost. There is no basis reduction and the unused portion rolls forward after applying it against taxes owed. This credit can be difficult for some companies to monetize because it usually substantially exceeds the state corporate tax liability for a single year.
Option 2—Refundable Credit— This credit is worth 24.5% of the installed cost and pays you cash for any amount left over after it has been applied to your tax bill. An important note: If you have pension income or low income, you can take the 35% as refundable, making this a good option for retirees.
Standard Modified Accelerated Cost Recovery Program (MACRS)–Under Hawaii's MACRS accelerated depreciation schedule you can write off 100% of your total project cost over six years. There is no "bonus depreciation" provision on the state level, but this schedule allows 20% of the project cost to be taken in Year 1 and 32 percent to be taken in Year 2.
Solar Hot Water / Solar Thermal Rebates
1. Federal Solar Hot Water Rebates
Federal tax credits include 30% of the cost of solar hot water systems with no cap. Expires Dec. 31, 2016
2. State Solar Hot Water Rebates
The state of Hawaii offers a personal tax credit of 35% of the cost of the system or $2,250, whichever is less, as well as a one-time $750 rebate for existing homes (not available for homes built after 2009).
3. Local Solar Hot Water Rebates
Honolulu Solar Roofs Initiative
- Low interest loans are available for income-qualified homeowners on Oahu for the installation of solar hot water systems
Solar Attic Fans Rebates
1. Federal Solar Attic Fans Rebates
The same federal tax credit that applies to solar PV and solar hot water systems applies to solar attic fans - 30% of the cost of the system with no cap. Expires Dec. 31, 2016
2. State Solar Attic Fan Rebates
The same personal tax credit of 35% of the actual cost of the system or $2,250, whichever is less, applies to solar attic fans in Hawaii as well as solar hot water.
3. Local Solar Attic Fan Rebates
The state of Hawaii also offers at $50-75 rebate for solar attic fans via local utility companies
Kamaaina Plumbing and Home Renovations are a complete home improvement and renovation specialist. We are Hawaii solar installation experts that have installed and managed hundreds of solar projects here in Hawaii.