Blue Planet Releases Economic Impact Study of Hawai‘i's Solar Tax Credit
Solar power is an investment that is renewable and yields signficant fiscal benefits to the State
The Blue Planet Foundation has released a full report, updated January 2013, detailing the economic impacts of Hawai‘i's renewable energy tax credit. The analysis, conducted by former University of Hawai‘i economist Dr. Thomas Loudat is updated from last spring, peer-reviewed, and includes demographic information from building permits for O‘ahu photovoltaic installations over the past 12 years. (Dr. Loudat’s earlier analysis of renewable energy tax credits was presented in a report to the state legislature in 2002.)
Findings show that the existing tax incentive yields a clear, significant net fiscal benefit to the state. Every commercial PV tax credit dollar invested yields $7.15 that stays in Hawai‘i and $55.03 in additional sales, which generates $2.67 in new tax revenue. For a typical 118 kW commercial PV installation, the state gains 2.7 local jobs each year over the 30-year lifetime of the system.
"Solar energy is currently a bright spot in Hawaii’s progress toward energy independence," said Blue Planet Executive Director Jeff Mikulina. "Our analysis shows that solar is also a bright spot in Hawai‘i's economy and our state budget."
"Solar in Hawai‘i is helping us reduce our dependence in dirty, expensive oil; it’s creating thousands of good paying local jobs; and it’s funneling hundreds of millions of tax dollars into our state budget."
According to the state Department of Business, Economic Development, and Tourism (DBEDT), solar accounts for 15% of all construction expenditures in Hawai‘i. The solar industry employs more than 2,000 people locally.
Any stimulation in solar installations also brings federal dollars (from the 30% federal renewable energy tax credit) into our local economy. These dollars have a full multiplier effect equivalent to tourist dollars coming to Hawai‘i.
Solar installations in the past year doubled as compared with all of the previous years combined. Blue Planet's analysis shows that the use of solar is increasing more rapidly in less wealthy neighborhoods.
An analysis of O‘ahu residential PV permits from the past decade indicates that while overall number of installations are located in zip codes that have higher median incomes, the rate at which PV installations occured in 2012 versus 2002-2011 was signficiantly higher in lower median income areas. For example, Wai‘anae (with a median household income of $55,836) saw a 300% increase in PV permits in 2012 compared with the previous decade combined (173 total permits between 2002 and 2011; 521 permits in 2012 alone). Hawai‘i's solar tax credit—coupled with new third party-owned PV programs—have enabled a broadening range of O‘ahu homeowners to escape the burden of high energy costs and benefit from a clean energy solution.
"Hawai‘i's renewable energy tax credit is a catalyst in driving positive economic growth through solar," Mikulina added. "When we shift our energy dollars away from foreign oil and to local clean energy sources, those dollars circulate in Hawai‘i's economy to the benefit of everyone."
“Ultimately, the tax credit is a smart investment in a better, cleaner tomorrow, a future we value beyond dollars and cents.”
The study’s findings and supporting data can be found at BluePlanetFoundation.org/SolarCredit.