Question: Is it true that if you have solar panels placed on your home, you would receive a property tax exemption from the city?
Answer: No.
Homeowners might think there is such an exemption because of a confusing law, Section 8-10.5 of the Revised Ordinances of Honolulu, which says:
“The value of all improvements in the county (not including a building or its structural components, except where alternate energy improvements are incorporated into the building, and then only that part of the building necessary to such improvement) actually used for an alternate energy improvement shall be exempted” from real property taxes for 25 years.
The alternate energy sources would include processes that don’t use fossil fuels, nuclear fuels
or geothermal sources, such as solid wastes, wind, solar or ocean waves, tides or currents.
However, Gary Kurokawa, administrator of the city Real Property Assessment Division, pointed to a provision that says “except that no claim need be filed for the exemption of solar water collectors, heaters, heat pumps and similar devices.”
“It’s saying basically there is no need to file a claim, but still talking about an exemption,” he said. So, “in people’s minds that means you get something exempted. There’s the confusion.”
The bottom line is that the city is not assessing homeowners for having solar water heaters, heat pumps, photovoltaic systems, etc., as an “added feature,” so there is nothing to exempt.
“In other words, for simplicity purposes, we’re not requiring people to make all these claims, and we’re not having to go out and look for these solar water heaters so there’s no need to have an exemption,” Kurokawa explained. Basically, it would be a time-consuming “wash.”
If two homes in Mililani were assessed at $500,000, for example, one with solar energy and one without, “they’re both of same value” for tax assessment purposes, he said.
Kurokawa said the provision that talks about “the value of all improvements” also is confusing.
“The ‘value’ is not the same as the ‘cost’ of something,” he said. “If you buy a system, the value might be half of what it cost. We cannot determine what the value is at this time.”
Kurokawa also said he wanted to “make clear” that the alternate energy exemption does not exempt any buildings — only the equipment and whatever is necessary for the equipment.
His office so far has approved only one exemption: for a commercial wind farm, Kahuku Wind.
“We’ve fielded many calls” from individual homeowners, and many have applied for an exemption, but for now they’re just being kept on file.
A bill is pending in the Council’s budget committee seeking to clarify the law. Kurokawa says he hopes it can “clean up” the law so that, in the end, residential alternate energy systems will be considered part of a house, like an appliance, and not subject to assessments.
Mahalo
To the many people involved in recovering my windsurfing sail on Sunday, Jan. 22. I was sailing out at Kahala, the wind died and, after what seemed like an eternity wallowing in the water, I had to release my sail and paddle my board ashore. Friend Adrian Franke helped to search for it to no avail. Someone saw it floating off Black Point and notified the Coast Guard, which got the Fire Department to send a Jet Ski and boat to recover it, while their helicopter searched for a missing sailor, finding no one, of course. The next day another friend, Holger Gruenert, told me the Coast Guard was out searching, so I notified them and got the rig back from HFD Capt. Carvalho. It comforted me to know that there are so many alert, concerned, helpful people out there, and such responsive emergency personnel as well. — Steven Mark
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