Solar Tax Credit Income Limitations for High Earners
Summary
Hawaii Senate passed SB3183, amending the renewable energy technologies income tax credit to limit solar energy system credits for high-income taxpayers. Starting for taxable years after December 31, 2026, individual filers with AGI of $250,000 or more and joint filers with AGI of $350,000 or more are prohibited from claiming the credit for single-family residential solar systems. The bill also caps credit claims at two systems per property and requires minimum 5-kilowatt output capacity.
What changed
The bill specifically restricts the renewable energy technologies income tax credit for solar energy systems installed on single-family residential properties. Taxpayers with adjusted gross income at or above $250,000 (individual) or $350,000 (joint) are prohibited from claiming the credit for these systems starting with taxable years beginning after December 31, 2026. The legislation also limits credit claims to two systems per property and requires systems to have at least 5 kilowatts total output capacity.
Affected parties planning solar installations should review their expected AGI thresholds and consider timing installations before the December 31, 2026 effective date to preserve credit eligibility. Property owners with multiple solar systems should verify their systems meet the 5-kilowatt minimum capacity requirement. Tax professionals should advise high-income clients on the loss of this credit benefit for future solar investments.
What to do next
- Review expected AGI against $250,000 (individual) or $350,000 (joint) thresholds before installing solar systems
- Consider timing solar installations before December 31, 2026 to preserve credit eligibility under current rules
- Verify any existing or planned solar systems meet the 5-kilowatt minimum output capacity requirement
Source document (simplified)
ChangeBridge / Hawaii / SB3183 Passed SB3183 Senate Bill Passed 2026-03-10
Relating To Renewable Energy.
Amends the renewable energy technologies income tax credit by: for taxable years beginning after 12/31/26, prohibiting taxpayers with an adjusted gross income of $250,000 or greater if filing as an individual or $350,000 or greater if filing jointly from claiming the credit for certain solar energy systems installed and placed in service on a single-family residential property; limiting credit claims for certain solar energy systems for single-family residential property to two systems per single-family residential property and requiring systems to have a total output capacity of at least five kilowatts; and increasing the adjusted gross income threshold below which an individual taxpayer may elect to have any excess credits refunded. Effective 7/1/3000. (HD1)
Bill Details
State Hawaii
Session 2026 Regular Session
Chamber Senate
Committee Finance
Official Source www.capitol.hawaii.gov/session/measure_ind...
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Sponsors
Glenn Wakai (Sen - D) Angus McKelvey (Sen - D)
Action History
2026-03-30 H Passed Second Reading as amended in HD 1 and referred to the committee(s) on FIN with Representative(s) Muraoka, Pierick, Shimizu voting aye with reservations; Representative(s) Garcia voting no (1) and Representative(s) Cochran, Lowen, Perruso, Quinlan excused (4). 2026-03-30 H Reported from EEP (Stand. Com. Rep. No. 1433-26) as amended in HD 1, recommending passage on Second Reading and referral to FIN. 2026-03-24 H The committee on EEP recommend that the measure be PASSED, WITH AMENDMENTS. The votes were as follows: 5 Ayes: Representative(s) Lowen, Perruso, Chun, Kusch, Matsumoto; Ayes with reservations: none; 0 Noes: none; and 2 Excused: Representative(s) Kahaloa, Quinlan. 2026-03-23 H Bill scheduled for decision making on Tuesday, 03-24-26 11:00AM in conference room 325 VIA VIDEOCONFERENCE. 2026-03-19 H The committee(s) on EEP recommend(s) that the measure be deferred until 03-24-26. 2026-03-16 H Bill scheduled to be heard by EEP on Thursday, 03-19-26 9:40AM in House conference room 325 VIA VIDEOCONFERENCE. 2026-03-12 H Referred to EEP, FIN, referral sheet 17 2026-03-12 H Pass First Reading 2026-03-10 H Received from Senate (Sen. Com. No. 377) in amended form (SD 2). 2026-03-10 S Report Adopted; Passed Third Reading, as amended (SD 2). Ayes, 25; Aye(s) with reservations: Senator(s) Elefante. Noes, 0 (none). Excused, 0 (none). Transmitted to House. 2026-03-05 S 48 Hrs. Notice 03-10-26. 2026-03-05 S Reported from WAM (Stand. Com. Rep. No. 2846) with recommendation of passage on Third Reading, as amended (SD 2). 2026-03-03 S The committee(s) on WAM recommend(s) that the measure be PASSED, WITH AMENDMENTS. The votes in WAM were as follows: 12 Aye(s): Senator(s) Dela Cruz, Moriwaki, DeCoite, Hashimoto, Inouye, Kanuha, Kidani, Kim, Lee, C., Richards, Wakai; Aye(s) with reservations: Senator(s) Elefante ; 0 No(es): none; and 1 Excused: Senator(s) Fevella. 2026-02-25 S The committee(s) on WAM deferred the measure until 03-03-26 10:15AM; Conference Room 211 & Videoconference. 2026-02-23 S The committee(s) on WAM will hold a public decision making on 02-25-26 10:56AM; Conference Room 211 & Videoconference. 2026-02-17 S Report adopted; Passed Second Reading, as amended (SD 1) and referred to WAM. 2026-02-17 S Reported from EIG (Stand. Com. Rep. No. 2283) with recommendation of passage on Second Reading, as amended (SD 1) and referral to WAM. 2026-02-10 S The committee(s) on EIG recommend(s) that the measure be PASSED, WITH AMENDMENTS. The votes in EIG were as follows: 5 Aye(s): Senator(s) Wakai, Chang, DeCoite, Richards, Fevella; Aye(s) with reservations: none ; 0 No(es): none; and 0 Excused: none. 2026-02-06 S The committee(s) on EIG has scheduled a public hearing on 02-10-26 3:08PM; Conference Room 224 & Videoconference. 2026-02-02 S Referred to EIG, WAM. 2026-01-28 S Passed First Reading. 2026-01-28 S Introduced.
Votes
2026-02-10 Senate Energy and Intergovernmental Affairs: Passed, With Amendments Yea: 5 Nay: 0 2026-03-03 Senate Ways and Means: Passed, With Amendments Yea: 12 Nay: 0
Committee Referrals
2026-02-02 S Energy and Intergovernmental Affairs 2026-02-17 S Ways and Means 2026-03-12 H Energy & Environmental Protection 2026-03-30 H Finance
Bill Text Versions
2026-01-26 Introduced 2026-02-13 Amended 2026-03-04 Amended 2026-03-27 Amended
Subjects
Renewable Energy Technologies Income Tax Credit Income Restriction Solar Energy Systems Legislative data powered by LegiScan (CC BY 4.0)
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