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State lawmakers are proposing to tap into a failed $150 million renewable energy loan program and use it to offer rebates to residents who invest in batteries connected to solar systems.
Lawmakers from the Senate and House of Representatives have introduced bills that would require the Hawaii Green Infrastructure Authority, the agency assigned to run the loan program, to use the funds to offer rebates to customers who buy batteries.
Sen. Lorraine Inouye
(D, Waikoloa-Waimea-North Hilo) introduced Senate Bill 660, which would set aside funds from the program to pay for rebates and costs to administer the rebate program. Rep. Justin H.
Woodson (D, Kahului-Puunene-Old Sand Hills-Maui Lani) proposed the House’s version, House Bill 1593. Woodson’s bill also would reduce the state Public Utilities Commission’s oversight of the loan program.
Hawaii lawmakers created the Green Energy Market Securitization program, or GEMS, in 2013 to make rooftop solar systems more affordable. GEMS raised roughly $150 million through a bond sale and was to have lent that money by the end of November. To date it has lent roughly 2 percent of the funds, while $33 million in interest on the bonds is being repaid by Hawaii ratepayers via a $1.50 “Green Infrastructure Fee” on every monthly electrical bill.
“The Legislature further finds that the failure of the Hawaii green infrastructure loan program to achieve its intended result has resulted in most ratepayers paying for the program without reaping the benefits,” Woodson’s bill says.
The PUC ended an incentive program for solar energy systems called Net Energy Metering that credited customers the full retail rate for excess solar energy sent into the grid. The termination of NEM has been labeled as one reason why the GEMS program was unsuccessful, as it caused a shift in the solar market.
When ending NEM, state regulators replaced it with a program called self-supply that encourages the use of batteries. The program prohibited those enrolled from sending excess energy to the grid. The solar industry has said an incentive for energy storage technology is needed to build momentum around the new program and to revive the industry.
“We believe it is in line with the state’s energy goals and it opens the market to a wider range of people,” said Will Giese, policy consultant for Hawaii Solar Energy Association.
The Senate will be hearing other bills that would make batteries more affordable.
Senate Bill 361, introduced by Inouye, proposes an income tax credit for taxpayers who buy energy storage systems.
For residents, the proposed credit would break down to 33 percent off the actual cost of an energy storage system from Dec. 1, 2017, to January 2020 for single filers who earn $75,000 or less or joint filers who earn $150,000 or less. The credit would then scale down to 29 percent of the actual cost for an energy storage system placed in service between Dec. 31, 2019, and January 2021;
24 percent of the actual cost of the system placed in service between Dec. 31, 2020, and January 2022; and 11 percent after Dec. 31, 2021.
The proposed credit for single filers making more than $75,000, or joint filers earning more than $150,000, is roughly 3 percentage points less, scaling down over the same period. The bill also would offer a tax credit for commercial systems and utility storage systems that are part of community solar programs.
Senate Bill 365, also introduced by Inouye, would provide an income tax credit for energy storage systems. The bill would also require the Department of Business, Economic Development and Tourism to complete a study on the impacts and benefits of the tax credit and its contribution to the state reaching its goal to achieve 100 percent renewable energy by 2045.