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Sustainable Design for the 21st Century

Can Government incentives lead to an empty pot at the end of the rainbow?

By Brent Sauser

Hawaii 01 Nowhere is that more prevalent than in the aloha state of Hawaii, who leads the nation in solar power conversions for residential and commercial buildings.  2.6% of the total power generated in Hawaii is from solar photovoltaic systems and wind generators.  Arizona comes in a close second with 2.4% renewable power generated.

Hawaii 03     The motivation to go solar in Hawaii has come principally from two sources; 1) Climbing energy utility costs due to the increasing cost of importing oil; and 2) Favorable state incentives to go solar.  Hawaii gives roughly the lesser of 35% of costs or $5,000 for a residential system and up to $500,000 for a commercial installation.  Typical monthly power bills for residential can range from $350 to over $500, and the public utility can adjust rates on a monthly basis to compensate for the volatile oil prices.

Hawaii 04    Escalating utility bills plus generous incentives from the state (not to mention the federal energy rebates) created the perfect storm for conversion to renewable energy.  At first, this appeared to be accomplishing what the legislators had planned, that is, a rapid conversion over to renewable energy and reducing dependency on expensive imported oil.  It was meeting the overall state objective to have 40% of all power needs provided by renewable resources by 2030.  However, as interest grew and more homes and businesses took advantage of the incentives and rebates, the legislators soon discovered they did not bank enough funds to cover the rebates.  In 2011, Hawaii paid $65.4 million in rebates, based on tax returns.  In 2012, the amount tripled.  If the rebate and incentive program is left unchanged it is projected to balloon to $2.1 billion . . . . in a state that is deep in the RED budget-wise.

Hawaii 05      Now that the solar incentive “Genie” is out of the bottle it is no easy task to get him to return to his cramped quarters.  The Hawaii state legislators are attempting to modify the rebate program with heavy resistance.  The solar industry, many of whom relocated their businesses to support the boom, cry foul and are lobbying for the state to look elsewhere to balance their budget.  Added to the concern is the power utility now claiming that those increasing numbers who are off the power grid are not paying their fair share of the fixed costs and should pay a monthly fee for not being on the power grid.  That same argument is being waged in Arizona and California.

Hawaii 02      The Hawaii state legislators are currently out of session and won’t reconvene until 2014.  So . . . that means the generous rebates are still in effect.  However, I predict that this time next year the Hawaii renewable energy rebate program will NOT be as generous and the renewable energy conversion boom will come to a screeching halt.  Time will tell.

For further information regarding the Hawaii energy rebate program and the issues associated with it, please CLICK HERE.

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Category: Editorial

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