Important Hawaiʻi solar tax credit update
SB3125, now identified by the Governor's office as Act 24, changes Hawaiʻi's Renewable Energy Technologies Income Tax Credit. Solar advocates are asking state leaders to clarify the law and protect 2026 projects already installed, contracted, or underway.
This post is for general informational purposes only and should not be treated as tax or legal advice. Please consult a qualified tax professional for guidance on your specific situation.
What happened
During the 2026 legislative session, Hawaiʻi lawmakers advanced SB3125 as part of a broader income tax package. The Governor's office has since identified SB3125 as Act 24. The law includes changes to the Renewable Energy Technologies Income Tax Credit, including a statewide annual cap, income thresholds, certification requirements, and sunset language.
Because solar and battery projects can involve design, permitting, equipment, financing, installation, inspection, and utility steps, industry groups are concerned that the timing and language could affect projects already in motion during 2026.
Why SB3125 matters
Hawaiʻi families, nonprofits, businesses, and public facilities often use tax-credit assumptions when planning solar, battery storage, and energy resilience projects. If eligibility rules change unexpectedly, projects that were financially workable when they were planned may need to be re-reviewed.
That uncertainty matters in Hawaiʻi, where electric rates remain high and many customers look to solar and battery storage to manage long-term energy costs, prepare for outages, and reduce dependence on imported fossil fuels.
Concern about retroactive impact and a 2026 safe harbor
Solar advocates, including Hawaiʻi solar industry representatives and Solar United Neighbors, are urging state leaders to address concerns about projects that were already installed, contracted, permitted, financed, or otherwise underway in 2026.
A safe harbor fix would clarify how affected 2026 projects should be treated. The goal is to avoid penalizing customers and organizations that made decisions based on the tax-credit rules they understood at the time their projects moved forward.
Why solar and battery storage matter in Hawaiʻi
Solar and battery storage help local residents and businesses use more locally produced energy, reduce exposure to utility-rate volatility, and improve resilience during grid disruptions. Battery systems can also help customers shift solar energy into evening hours and participate in utility programs when eligible.
If you are reviewing a project now, it is worth understanding how the current credit conversation may affect your timing, documentation, and assumptions. AEI can help you evaluate solar PV, PV + storage solutions, and related planning considerations, while your tax professional should advise on tax treatment.
How residents can take action
Solar United Neighbors has published an action page asking Hawaiʻi leaders to convene a special session and protect projects already installed, contracted, or underway in 2026.
Urge a Special Session to Protect Hawaiʻi Solar Tax CreditsAlternate Energy Hawaii's commitment
Alternate Energy Hawaii has served local families and businesses since 1993. We will continue helping customers understand solar, battery storage, roof readiness, utility requirements, and available program information as the situation develops.
For project-specific planning, start with the latest AEI resources on solar incentives in Hawaiʻi, tax credits and incentives, photovoltaic systems, and PV + storage solutions. When you are ready, request a site-specific solar quote.
FAQ
What is SB3125 / Act 24?
SB3125, identified by the Governor's office as Act 24, is a Hawaiʻi income tax law that includes changes to the Renewable Energy Technologies Income Tax Credit. Reported changes include an aggregate cap, income thresholds, certification requirements, and sunset language.
Could this affect solar projects already installed or contracted in 2026?
Industry groups have raised concerns that the law could affect some 2026 projects already installed, contracted, permitted, financed, or underway. The exact impact may depend on project facts, timing, guidance, and any future legislative clarification.
What is a safe harbor provision?
A safe harbor provision is language that protects projects meeting defined conditions by a certain date or stage. In this case, advocates are asking for protection for 2026 solar and storage projects that were already underway before the tax-credit changes became clear.
What can Hawaiʻi residents do now?
Residents can review the issue, contact elected officials, and use the Solar United Neighbors action page to request a special session and safe harbor language. Customers should also keep project records and consult a qualified tax professional about their specific situation.
Should I still consider solar or battery storage?
Yes, solar and battery storage can still be worth evaluating in Hawaiʻi because electric rates, outage resilience, and long-term energy planning remain important. Incentive rules can change, so project assumptions should be reviewed carefully before signing or financing.
Who should I contact about my specific tax situation?
Please contact a qualified tax professional for guidance on your specific eligibility, documentation, filing, and tax-credit questions. AEI can help with solar and battery project planning, but we cannot provide tax or legal advice.
