- Associated Press - Thursday, April 28, 2016

HONOLULU (AP) - Hawaii has the highest rate of residents using solar panels in the nation, and lawmakers want to extend the state’s leadership role by offering incentives or rebates to those who buy batteries to store their renewable energy.

It’s an issue that’s important to residents of the island state, which has the highest electricity costs in the nation. The state’s largest utility proposed charging different rates for customers at peak times, such as night, when electricity costs are highest.

“We have one in three single-family homes that have solar on their roofs, and this allows people now to capture that energy and store it for use at night, which opens up the market to an entire new way of reducing costs on your electric bill,” said Rep. Chris Lee, a Democrat.

Senators are pushing a bill that would offer tax breaks for 25 percent of the cost of the batteries, which can cost thousands of dollars. The incentive would drop after three years to 20 percent of the cost. While many states offer incentives for installing solar, wind or other energy systems, incentives for batteries are less common.

But some lawmakers in the House of Representatives would prefer a rebate program that they say would help low-income families purchase solar or other renewable energy systems by letting them pay off the cost of the system gradually through their utility bill. A tax incentive, they argue, only helps people who can afford to spend money on the system.

“You’re giving tax incentives to those who don’t need this kind of assistance at all,” said Rep. Agnus McKelvey, a Democrat.

Hawaii began offering tax incentives for residents and businesses to install renewable energy systems in 2006. The state tax department doled out more than $118 million in renewable energy tax breaks in 2013, the most recent data available, and $179 million in 2012.

Right now, there’s no end date for the incentives, but Sen. Lorraine Inouye wants to phase them out gradually over time. She says the state can’t afford to provide incentives indefinitely when there are problems such as homelessness and schools that need air conditioning.

“It can’t go on forever,” Inouye said.

The House and Senate were negotiating the competing proposals Thursday ahead of a legislative deadline.

Leslie Cole-Brooks, executive director of the Distributed Energy Resources Council of Hawaii, said she supports the incentives bill.

“It makes sense for everyone,” Cole-Brooks said. “For the state, for the planet, this whole new way of doing business.”

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