Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Energy, Environment, and International Affairs, to which was referred S.C.R. No. 203 entitled:

begs leave to report as follows:

The purpose of this measure is to request the Legislative Reference Bureau to prepare a report examining incentives provided by other states to encourage electrical generation by photovoltaic (PV) systems, and to request the Director of Taxation to prepare a report on the anticipated fiscal impacts of various tax incentive programs to help foster residential PV systems.

Testimony in support of this measure was received from the Hawaii PV Coalition and 17 individuals. Hawaiian Electric Company, Inc., and the Hawaii Solar Energy Association supported the intent of the measure and offered comments. The Department of Taxation and the Public Utilities Commission offered comments on the measure.

Your Committee finds that Act 163, Session Laws of Hawaii 1998, created a task force to explore the most cost-effective ways for the State to support increased energy efficiency and sustainability. The Energy-Efficiency Policy Task Force produced a final report to the Legislature in 2002. Your Committee further finds that since the task force report was produced, the cost of energy has greatly increased and relatively few PV systems have been installed in Hawaii, although a number of other jurisdictions now provide attractive incentives for the installation of PV systems. Thus, your Committee finds that the information gained from the 2002 report of the Energy-Efficiency Policy Task Force should be expanded to include an update on incentive programs in other jurisdictions and a determination of which incentive plans can be practicably implemented in Hawaii.

Your Committee has amended this measure by including information about the Energy-Efficiency Policy Task Force and requesting the Legislative Reference Bureau to further expand on that study regarding incentives and specifically to compare Hawaii's program to other states, such as California. Your Committee has also amended this measure by requesting that the Legislative Reference Bureau make recommendations on practical incentive options for the State, and by making technical, nonsubstantive, amendments for the purposes of clarity and style.

As affirmed by the record of votes of the members of your Committee on Energy, Environment, and International Affairs that is attached to this report, your Committee concurs with the intent and purpose of S.C.R. No. 203, as amended herein, and recommends that it be referred to the Committee on Ways and Means, in the form attached hereto as S.C.R. No. 203, S.D. 1.