A Policy Analysis of Hawaii�s Solar Tax Credit Incentive

Makena Coffman (), Sherilyn Wee (), Carl Bonham and Germaine Salim ()
Additional contact information
Makena Coffman: University of Hawaii at Manoa, Department of Urban and Regional Planning & University of Hawaii Economic Research Organization
Sherilyn Wee: University of Hawaii Economic Research Organization
Germaine Salim: University of Hawaii at Manoa, Department of Urban and Regional Planning

No 2013-11, Working Papers from University of Hawaii Economic Research Organization, University of Hawaii at Manoa

Abstract: This study uses Hawaii as an illustrative case study in state level tax credits for PV. We examine the role of Hawaii�s tax credit policy in PV deployment, including distributional and tax payer impacts. Hawaii is interesting because its electricity rates are nearly four times the national average as well as has a 35% tax credit for PV, capped at $5,000 per system. We find that PV is an excellent investment for Hawaii�s homeowners, even without the state tax credit. For the typical household, the internal rate of return with the state tax credit is about 14% and, without it, 10%. Moreover, the vast majority of installations are demanded by households with the median income and higher. We estimate that single-family homeowner�s in Hawaii may demand as much as 1,100 MW of PV. There are, however, significant grid constraints. Policy currently limits PV generation to no more than 15% of peak load for any given circuit, or approximately 3% of aggregate electricity demand. Tax credits are therefore not likely to increase the overall deployment of PV, but rather spread the cost of installation from homeowners to taxpayers and accelerate the rate at which Hawaii reaches grid restrictions.

Pages: 22 pages
Date: 2013-11
New Economics Papers: this item is included in nep-ene and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://uhero.hawaii.edu/wp-content/uploads/2020/03/WP_2013-11.pdf First version, 2013 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hae:wpaper:2013-11

Access Statistics for this paper

More papers in Working Papers from University of Hawaii Economic Research Organization, University of Hawaii at Manoa Contact information at EDIRC.
Bibliographic data for series maintained by UHERO ().