What we found was remarkable. The existing tax credit yields a clear, significant net fiscal benefit to the state. For every PV tax credit dollar the state invests, the payoff includes:
-- $13.37 stays in Hawai‘i (what we would have sent out of state to import oil)
-- $44.70 in additional sales (from the oil savings circulated into the local economy)
-- $3.17 in new tax revenues (generated from those added sales)
Loudat's findings show that each PV installation also produces new jobs and additional local labor income. A typical 118 kW commercial PV installation, for example, yields 2.8 local jobs each year over the 30-year lifetime of the system.
Blue Planet believes that the tax credit stimulates private investment in renewable power, and these investments provide a community benefit. We also recognize that renewable projects draw federal dollars into Hawai‘i's economy that otherwise wouldn't be here. Dr. Loudat's study allows us to assess what these benefits are worth.
While Blue Planet supports the existing tax credit, we are backing a measure to reduce the tax credit from 35% to 20% over the next three years. This and other changes to the law are currently contemplated in the Senate Draft of House Bill 2417. Acknowledging that the price of PV systems has dropped dramatically, Blue Planet's position is that the state's share in incentivizing the systems can and should decrease. But it is also essential that we maintain the right tax credit "nudge" to help more and more families and businesses put solar to work for them—with long-term benefits for everyone.
Unlike other tax credits, the investment in renewable energy is not a one-shot deal. The state continues to reap economic benefits over the 30-year lifetime of the system--consider the oil costs offset, year after year. It makes sense in the big picture, too, when you look at all the other reasons we need to move beyond oil. The dividends pay off in more than just dollars--there's value in energy security and reducing CO2 emissions, too, and these are benefits that other tax credits don't provide.
As Van Jones wrote in Rebuilding the Dream, "As we think about a new economy, perhaps we can begin to apply some new math — and begin to count what really counts. The earth counts; our kids count; the future counts. Where economic and energy policy meet, we should calculate not only what we spend, but also what we save. And we should consider the payoffs from the investments we make in human and natural capital."
"Often-overlooked benefit of solar is how it benefits the economy" Editorial by Jeff Mikulina and Dr. Tom Loudat, Honolulu Star-Advertiser
"Study: Hawai‘i solar tax credits pay off" by Duane Shimogawa, Pacific Business News
"Blue Planet: Renewable energy tax credit boosts local economy" by Sophie Cocke, Honolulu Civil Beat
"Sun, Shine" by Derrick DePledge, Honolulu Star Advertiser (Clever headline!)
It's a good question. Let's do the first order approximation.
First, how much electricity to we use? According to the DBEDT energy trends, we use about 10 terawatt-hours (TWhs) of electricity annually. In fact, 10125.94 gigawatt-hours (GWhs) in 2009, 10013.10 GWhs in 2010, and about 9985.55 GWhs in 2011. So that's our (hopefully shrinking) target.
Second, how many roofs do we have to cover? Let's just look at residential. According to the 2011 US Census, Hawaii has 519,508 housing units, 39.2% of which are multi-family. So let's just look at the single family units (we'll be more conservative here and more generous elsewhere). So that gives us 315,861 single-family home rooftops. Now let's say for each rooftop we can fit a 4 kilowatt (kW) system. This is probably being a bit generous, given the size and possible shading issues. With all those rooftops tiled with 4 kW of PV each, we have 1,263,443 kWs, or 1263 MWs of PV (which, BTW, approaches the total system capacity on Oahu).
Of course, the sun isn't always shining. In fact, for PV, the "capacity factor" is between 15% and 20%--meaning that at any given moment you will have able to produce between about 15% and 20% of the rated PV capacity. Let's use the generous 20%. For our rooftops this means (20% X 1263) 253 MW of PV capacity. Now we can look at the total production over one year (at the already "de-rated" PV installation). So 253 MW X 8760 hours in a year = 2,213,553 MWhs, or 2,214 GWhs, or 2.2 TWhs. This would provide about 22% of our overall electricity use.
This 22% is probably conservative--we ignored all of the commercial rooftops. Plus we are seeing more and more large ground-mounted PV arrays (usually in 5 MW blocks because that is the largest size before the utility needs to competitively bid). Nonetheless, it reminds us that we need a mix of renewable energy sources. And yes, we hope to shave our 10 TWhs of usage by 30% come 2030 (the HCEI target), but we're also adding a bunch of electric vehicles to the grid (which could just cancel out that efficiency gain--which is fine for the big picture).
By the way, any guess of how much all of that PV would cost? About $10 billion. It would pay for itself in about 13 years.
According to the Hawaii Tribune-Herald, Tropical Dreams Custom Ice Cream Co., now generates more than 90 percent of their energy through their recently installed solar PV system. Blue Planet Foundation helped the Big Island gourmet ice cream company apply for $125,000 in USDA grants to help finance the system that was designed and installed by RevoluSun. The 101.2 kw system produces the equivalent of the energy consumed to drive almost 7 million miles a year, and it's expected to pay for itself within three years. Congratulations, Tropical Dreams! Read more. (Photo: Tropical Dreams)