Solar Energy Tax Credits, Rebates and Incentives for Home Owners
State of Hawaii Renewable Technologies Income Tax Credit
This income tax credit allows a credit of up to 35 percent of the cost of equipment and installation for solar thermal and electric systems. The credit is to be applied in the year in which the system is placed into service, and is limited to $5,000/system/year ($2,250/system/year for solar thermal).
Tax credits that exceed the taxpayer’s income tax liability may be used as a credit against the taxpayer’s income tax liability in subsequent years until exhausted. (Department of Taxation Form N-334 link below). Last July, the State of Hawai’i also allowed filers to elect to take the credit as a refund, for a 30% lesser amount, unless certain income requirements are met (Act 154 link below).
Federal Investment Tax Credit
The federal tax credit covers 30% of equipment and installation costs for solar thermal and electric systems. The tax credit is unlimited, applicable to the tax-year the system is placed into service, and remaining credits may be carried back 1 year (up to 50% of total) and/or carried forward until exhausted, for up to 15 years. (IRS Form 3468)
Please note that the tax incentive calculations are based on our understanding of the new energy conservation credits described in the SEIA Guide to Federal Tax Incentives for Solar Energy. Please click on the link below to download the manual or consult your tax professional.
You can also e-mail your tax questions to Mimi Hu at Kawahara & Company, CPAs, LLC Certified Public Accountants – for more info.
Please note that these forms are for the 2019 tax year and IRS does not offer the 2020 versions at this time, so they will have to be updated later and each year. Please go to www.irs.gov and tax.hawaii.gov websites to download most current PDF forms.