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The Honolulu Advertiser
Posted on: Thursday, June 14, 2001

Energy incentives abound in Hawai'i

By Walter Wright
Advertiser Staff Writer

Hawai'i residents waiting for President Bush's new energy plan to kick in already can save hundreds of dollars a year and lots of fossil fuels with existing energy saving programs here.

Promoting energy saving
For more information on state income tax credits and utility program rebates call:
 •  Hawaiian Electric Co. (HECO), O'ahu: 947-6937
 •  Hawaii Electric Light Co. (HELCO), Big Island: 969-0127
 •  Kauai Electric: 246-8280
 •  Maui Electric Co. (MECO): 1-888-632-6786
 •  Energy, Resources and Technology Division of the Department of Business, Economic Development and Tourism: 587-3807
Homeowners can save most by installing solar water heating systems, which will pay for themselves in electric bill savings within four or five years.

After that, such systems will provide a continuing savings on electrical bills of more than $500 a year for a family of four.

If Gov. Ben Cayetano signs a new "net-metering" law now on his desk, solar power advocates say, another form of solar energy generation, the photo-voltaic panel, will become much more attractive as an alternative source of energy in sunny Hawai'i.

Net-metering allows a homeowner to sell back to the utility company the energy the homeowner can produce in excess of the home's need, in effect rolling the electrical meter backwards to cut the electrical bill.

It also allows the owner a benefit that is not dependent on batteries, which can make up a large part of the cost of a photo-voltaic system. A photo-voltaic panel converts the sun's energy directly into electrical power.

With net-metering, photo-voltaic could become cost effective on the Neighbor Islands, where electricity costs are almost three times the national average.

But on O'ahu, where electricity is the cheapest in the state at 14.4 cents per kilowatt hour (still much higher than the national average of about 8 cents), customers who install photo-voltaic systems are doing so to make a gesture toward the environment or to gain some back-up independence from the grid in case of a long-term power failure, says Keith Cronin, who has installed eight such systems in Hawai'i.

Louis Valenta, head of photo-voltaic systems at Inter-Island Solar, says he knows one homeowner in Kahalu'u who is plunging ahead with solar powered equipment.

The homeowner is spreading his investment out year after year to maximize the tax credit, Valenta said, but will still need about 19 years of electric bill savings to pay for his system.

Solar water heating is already used in Hawai'i by an estimated 60,000 single-family homes, apartments and institutions, according to the state Department of Business, Economic Development & Tourism.

The state subsidizes home energy systems by giving an annual state tax credit of 35 percent of the cost up to a cap of $1,750 for homeowners.

The state also offers a 20 percent tax credit for wind generation systems, and a 20 percent tax credit for home heat pumps, to a maximum of $400.

State tax credits are more attractive for businesses than for homeowners, because there is no cap on the dollar value of the tax credit offered to businesses.

Local utilities currently offer rebates — from $500 on O'ahu to $1,000 on the Neighbor Islands — to help homeowners install solar water heating systems, which typically cost about $5,000.

Local utilities also participate in the Energy Star Mortgage program, which assists buyers of homes with energy-saving devices to obtain mortgages under more favorable terms, reflecting the fact that buyers' energy costs will be lower.

President Bush's energy plan includes more than $10 billion worth of tax credits over 10 years for conservation and energy development. It may make solar power generation even more attractive in Hawai'i.

The President's National Energy Policy Development Group has recommended a new 15 percent federal tax credit, to a maximum of $2,000, for residential solar energy systems. It would be the first such federal tax credit since 1985, when a tax credit of 35 percent was allowed to lapse.

In addition to solar power and other alternative energy sources, state energy planners also urge homeowners to consider fluorescent lighting, more efficient appliances, and good building design with ventilation and insulation as low-cost means of lowering energy costs.

Despite the interest in conservation and alternate energy programs here, the part of Bush's plan that could have the greatest effect on Hawai'i is his controversial oil-drilling policy.

From the airplanes that feed tourism and the economy to most day-to-day electrical needs, Hawai'i is inescapably dependent on oil.

"Here in Hawai'i, a little less than 30 percent of the oil we use is used for electricity," said Chuck Freedman, Hawaiian Electric spokesman. "Over 60 percent is used for transportation. Some 37 percent of our oil consumption is for air transportation, 19 is for ground transportation, and 7 percent is for marine transportation."

One reason alternative forms of energy are as attractive as they are for Hawai'i homeowners and some businesses is that fossil fuels also have to be imported, adding to their cost.