Gov. Josh Green’s move Friday to reinstate renewable‑energy tax credits for this year offers only a temporary fix, advocates warn, leaving untouched the gap Hawaii faces to meet its accelerated climate targets — including 50,000 additional Oahu rooftop solar installations by 2030 and 100% renewable power on the neighbor islands by 2035.

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Act 24, signed by Green on May 21, reduced tax credits for several industries to help the state balance its budget and partly offset nearly $3 billion in anticipated lost revenue from the federal government. The legislation also captured money in special funds and from long-vacant state job positions.

The largest tax credit affected was the Renewable Energy Technologies Income Tax Credit, which has been a driver for residents and companies alike to get on board with investing in renewable energy. Act 24 set a $40 million annual cap and revoked tax credit eligibility from those with incomes of more than $175,000 for individual filers and $350,000 for joint filers, and ultimately phases out the tax credit completely by 2031. As it was written, it applied the changes retroactively to projects already contracted for 2026, but the Friday executive order removed the cap for current projects.

While the solar industry and renewable-energy advocates said they appreciated Green’s executive order, questions remain on how it will impact Hawaii’s ambitious climate goals.

“The untouched provisions of the bill will still slash any available renewable incentives for any future projects, and terminate them entirely in a few years,” said Wayne Tanaka, director of the Sierra Club of Hawaii. “Unless and until the Legislature acts, a dark cloud will continue to hang over the local solar industry, and by extension, our clean energy future.”

In 2015, Gov. David Ige signed Act 97 into law, which made Hawaii the first state to legally mandate a transition to 100% renewable energy by the end of 2045. Act 15, signed in 2018, expanded that goal to also include the state moving to a net-zero carbon emissions in the same time frame.

Last year, Green added even more urgency to Hawaii’s renewable goals. In January 2025, he signed Executive Order 25-01, which called for 50,000 additional rooftop solar systems on Oahu by 2030 and accelerated the transition to 100% renewable energy on the neighbor islands to 2035. To keep pace with the goal, Oahu would need to add 10,000 rooftop solar systems each year.

Oahu’s number of rooftop solar systems climbed from 41,600 in 2015 to 82,475 in 2025, according to Hawaiian Electric Co., with 6,571 being added in 2025 alone.

Since 2015, when Ige set the first renewable energy climate goals, the tax credit program has dispersed more than $684 million to 79,711 claimants statewide, according to Department of Taxation data. It’s the most of any tax credit in the same time period, with nearly $70 million more than the next most costly tax credit, which accounts for income taxes paid to other states or countries. In 2023 alone, the most recent year data is available, the renewable tax credit dispersed more than $100 million to roughly 11,000 claimants.

Both executive orders recognize “distributed solar energy has been, and will continue to be, a leading contributor to the state’s sustainability and resiliency goals” and added that collective action is needed to reach those goals, maximize efficiency and reduce costs for ratepayers.

Joshua Powell, co-founder and CEO of solar company RevoluSun and board member of the Hawaii Solar Energy Association, told the Honolulu Star-Advertiser the governor reinstating the tax credit for 2026 projects was a good move, but said he believes the legislation will stall the state’s momentum toward its climate goals.

“Somebody that’s got enough money, they can go buy a (solar) system tomorrow because their prices aren’t going up, incentive or not,” Powell said. “Somebody that doesn’t have the capital to just buy a system outright, they need some kind of financing.”

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Powell added that the legislation follows federal tax credit cuts for renewable energy, which further doesn’t give consumers incentives for investing in the technology. While expensive for the state, he said, the tax credit has helped offset billions of dollars of oil and created numerous jobs.

“What we’re trying to do, which is change our energy system, it’s not crazy that that would be a pretty major commitment,” he said.

When asked for comment, the Governor’s Office pointed the Star-Advertiser to the executive order announcement, which said the action supported the goals set by Green the previous year while respecting decisions made by the Legislature for 2027 and beyond. In the news release for the action, State Energy Officer Mark Glick said the executive order provides immediate relief to the solar industry “with an opening to design innovative proposals for the 2027 legislative session.”

The State Energy Office said in an emailed statement that “distributed solar energy has been, and will continue to be, a leading contributor in transforming Hawaii’s energy system to be more affordable, resilient and sustainable.” It said the agency is working to address concerns by the solar industry, adding, “ultimate success is not dependent on special subsidies, but on cost-effective technologies like distributed solar as a foundational part of our planning and regulation.”

The agency said it remains committed to meeting Hawaii’s renewable energy and carbon goals.

The solar industry will survive without the tax credit, Powell said, but the cap and eventual sunset of the credit will hurt the business.

“The hardest thing for most businesses is really unsteady revenue, and things like this definitely challenge you on your revenue forecasts,” he said.

Hawaii doesn’t have as much land for utility-scale solar, he said, so its highly dependent on residential solar to contribute to the grid. According to HECO, 97% of the solar systems on Oahu are residential and carry 44% of the solar capacity as of 2025, while 3% are commercial or grid-scale and carry 56% of the capacity.

Incentives, like tax credits, often motivate consumers to take initiative in transitioning to solar rather than putting it off for other projects, Powell said. Taking the credit away will likely make consumers delay the investment, which could impact the state’s climate goals.

“Do we want to get there quickly and avoid more exposure to the the vagaries of the oil market? … The beauty of solar energy in Hawaii is we don’t have to worry about the sun.” he said. “It’s technology focused, and there’s still a lot of room to improve these things, especially batteries. You’ll see those costs, the equipment-related costs, actually continue to go down, and that’s a huge benefit to the state. We’ll keep going no matter what. I think it’s just, how quickly do we get there?”

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