STAND. COM. REP. NO. 3112

Honolulu, Hawaii

RE: H.B. No. 2241

H.D. 1

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Sir:

Your Committee on Energy and Intergovernmental Affairs, to which was referred H.B. No. 2241, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO RENEWABLE ENERGY,"

begs leave to report as follows:

The purpose and intent of this measure is to amend the Renewable Energy Technologies Income Tax Credit by:

(1) Beginning December 31, 2026, limiting claims for certain solar energy systems that are not third-party financed systems and installed and placed in service on a single-family residential property to taxpayers with an adjusted gross income of $250,000 or less if filing as an individual or $350,000 or less if filing jointly;

(2) Removing certain cap amounts for solar energy systems that are not third-party financed systems; and

(3) Increasing the maximum adjusted gross income an individual taxpayer must be below in order to be eligible to have any excess credits refunded and limiting credit refundability to systems that are not third-party financed system.

Your Committee received testimony in opposition to this measure from PV Tech; Inter-Island Solar Supply/The Solaray Corporation; EP Cube; Solartech Hawaii, LLC; Hawaii Solar Energy Association; Hawaii Energy Connection (aka KumuKit solar); Energy Advisors; Alternate Energy, Inc.; and twelve individuals.

Your Committee received comments on this measure from the Department of Taxation, Hawaii State Energy Office, and Tax Foundation of Hawaii.

Your Committee finds that incentives are necessary to sustain residential solar deployment at levels required to achieve the State's renewable energy goals. Considering current market conditions and recent cutbacks of federal funding, it is imperative for the State to encourage an equitable tax incentive structure to assist low- and moderate-income families to convert to renewable energy technologies. By amending the Renewable Energy Technologies Income Tax Credit, which has been effective at transitioning the State to green energy, this measure will mitigate the impact of the elimination of federal solar incentives and support the swift adoption of renewable energy for individuals most vulnerable to rising electricity costs.

Your Committee has amended this measure by making technical, nonsubstantive amendments for the purposes of clarity and consistency.

As affirmed by the record of votes of the members of your Committee on Energy and Intergovernmental Affairs that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2241, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2241, H.D. 1, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Energy and Intergovernmental Affairs,

________________________________

GLENN WAKAI, Chair