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Sierra Club challenges solar energy tax credit cutbacks

December 20, 2012
The Maui Weekly

Today, the Sierra Club, represented by Earthjustice, filed a legal challenge in state circuit court against the Hawai'i Department of Taxation's recent decision to cut back on tax credits for residents and businesses that install solar energy systems. The department's new interpretation of the solar credit--which was announced Nov. 9 and goes into effect Jan. 1, 2013--will drastically reduce the availability of the Hawai'i renewable energy tax credit for solar photovoltaic systems and threatens Hawai'i's progress in promoting renewable energy and in weaning itself off fossil fuels.

Since the department announced it was cutting support for solar energy systems, we've heard from hundreds of our members across the state who say they will no longer be able to afford to install solar panels on their roofs," Sierra Club Hawai'i Chapter Director Robert D. Harris said. "We've also heard of investors pulling out of several large-scale commercial projects because the reduced credit makes the projects unviable. This goes completely against what the Legislature tried to accomplish in enacting and expanding the solar tax credit."

The legal challenge says the department's new rule conflicts with the law's aim of encouraging widespread adoption of residential and commercial solar energy systems, which are vital for Hawai'i to reach its goal of 40 percent of its energy coming from locally generated, renewable sources by 2030.

"The administration is wrongly slamming the brakes on one of the few success stories in achieving Hawai'i's clean energy goals," said Harris.

The department's new interpretation would slash the average tax credit to homeowners and businesses that install solar energy systems by about half. It also threatens the future of thousands of solar energy workers in one of Hawai'i's strongest growth sectors.

The department changed its interpretation of the solar credit after asking the state Legislature to pass a similar reduction to the credit last session, which the Legislature refused to do.

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