STAND. COM. REP. NO. 84-26

Honolulu, Hawaii

, 2026

RE: H.B. No. 2608

H.D. 1

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Madame:

Your Committee on Energy & Environmental Protection, to which was referred H.B. No. 2608 entitled:

"A BILL FOR AN ACT RELATING TO WATER HEATING SYSTEMS,"

begs leave to report as follows:

The purpose of this measure is to:

(1) Authorize building permit variances for certain high-efficiency electric water heating systems utilizing heat pump technology, rather than demand water heater devices, which are gas-tankless instantaneous water heaters; and

(2) Expand the Renewable Energy Technologies Income Tax Credit to include high-efficiency electric water heating systems utilizing heat pump technology.

Your Committee received testimony in support of this measure from the Hawaiian Council and six individuals. Your Committee received testimony in opposition to this measure from Hawaiʻi Gas; Stanford Carr Development; Castle & Cooke Homes Hawaiʻi, Inc.; the Building Industry Association of Hawaii; Kapolei Chamber of Commerce; and numerous individuals. Your Committee received comments on this measure from the Department of Taxation and The Solaray Corporation dba Inter-Island Solar Supply.

Your Committee finds that high‑efficiency electric water heating systems utilizing heat pump technology provide a cost‑saving alternative to fossil fuel–based water heating systems, helping to reduce household energy costs and greenhouse gas emissions. This measure authorizes building permit variances for these systems to be used in place of demand water heaters. While your Committee finds that there is a need to support the adoption of these systems through variances or tax credits, your Committee recognizes that a variance for these systems does not need to replace the existing variance for demand water heaters and that other measures being heard by your Committee will address the expansion of the Renewable Energy Technologies Income Tax Credit.

Accordingly, your Committee has amended this measure by:

(1) Reinstating the variance for demand water heater devices;

(2) Removing provisions expanding the Renewable Energy Technologies Income Tax Credit;

(3) Changing the effective date to July 1, 3000, to encourage further discussion; and

(4) Making technical, nonsubstantive amendments for the purposes of clarity, consistency, and style.

As affirmed by the record of votes of the members of your Committee on Energy & Environmental Protection that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2608, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2608, H.D. 1, and be referred to your Committee on Water & Land.

Respectfully submitted on behalf of the members of the Committee on Energy & Environmental Protection,

____________________________

NICOLE E. LOWEN, Chair