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Lawmakers move to modify solar energy tax credits

By Associated Press

POSTED:
LAST UPDATED: 04:33 p.m. HST, Feb 06, 2013

<br />2010 May 10 CTY - The Hawaii State Department of Education has embarked on an ambitious two-year plan to bring solar power to public schools throughout the state by awarding its first Power Purchase Agreement contract to Hawaii Pacific Solar, LLC.&#226;&#128;&#156;Utilizing renewable energy sources to reduce the cost of school operations is a top priority for the DOE,&#226;&#128;&#157; said Randolph Moore, assistant superintendent of the Office of School Facilities and Support Services. A Power Purchase Agreement (PPA) is a legal arrangement that allows a third party organization to own and operate a solar photovoltaic system installed on a building or on land owned by an independent entity. The third party sells the energy produced by the system, usually at a discount, to the owner of the land or the building.<br />

The solar industry has been booming in Hawaii, but state officials worry the industry’s tax credits are draining state coffers. 

Representatives in the House committee on the environment voted today to gradually decrease the solar energy tax credit to 15 percent by 2018.

They cast aside the governor’s more drastic proposal to cut the current tax credit to 15 percent by next year. The credit is currently 35 percent of the cost of each solar energy system. 

Gov. Neil Abercrombie says the current credit is fiscally unsustainable.

But many environmental groups and solar companies say a sharp cut would cripple the renewable energy industry. Several support a gradual decrease.

Rep. Chris Lee, chairman of the House Committee on Energy and Environmental Protection, says the proposal approved today pulls from the best aspects of the different bills proposed.

He says he’s working closely with the Senate to come up with a compromise proposal that won’t get mired in politics.

Senators are expected to make a decision on the same issue next week.

Sen. Mike Gabbard, chairman of the Senate Committee on Energy and Environment, says the panel is planning to hear testimony Thursday about one more renewable energy proposal. The committee met Tuesday to hear testimony on three related bills, including the governor’s plan.

But Gabbard told The Associated Press that a gradual approach to decreasing tax credits makes the most sense.

He added he wasn’t surprised that the House rejected the governor’s proposal given the level of opposition by the solar industry.






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