On June 8, Gov. Josh Green quietly hit pause on Hawaii's solar tax shakeup, signing an executive order that keeps many 2026 solar tax credits intact and delays full rollout of this year's changes until 2027. The move is aimed squarely at protecting homeowners and businesses that made big-ticket energy decisions under the old rules.
Those solar changes are part of a broader tax package Green signed on May 21, designed to shore up state finances after federal policy shifts that his administration says could chop nearly $3 billion from Hawaii's revenues. According to the Office of the Governor, the package is meant to protect essential public services while reshaping some tax incentives so the budget still pencils out.
Buried in that law are sweeping changes to the Renewable Energy Technologies Income Tax Credit, including a new statewide annual cap that industry groups say will sharply limit available credits and, as written, reach back into 2026. Reporting by Civil Beat details the $40 million cap and the retroactivity worries that have developers on edge.
What the executive order does
Green's executive order instructs state agencies to put out guidance that treats projects finished this year, along with projects where owners can show they reasonably relied on pre-May 21 tax-credit guidance, as still eligible under the existing rules. That effectively pushes the broad application of the new regime to 2027. Local reporting by the Star‑Advertiser quotes the governor's office saying the move "protects investment decisions made in the past few months" while sticking with the Legislature's timetable for 2027 changes.
Industry reaction
Solar companies and the Hawaii Solar Energy Association have been sounding the alarm that Act 24's cap and eligibility tweaks could wipe out hundreds of commercial and residential projects and scare off investors. Hawai‘i Public Radio reported installers warning the law could "cripple" parts of the state's solar sector, and E&E News notes developers estimate hundreds of millions of dollars in projects are at risk if the retroactive language sticks.
What homeowners and businesses should know now
State and industry advisers say anyone with solar contracts, deposits, financing or permits dated before May 21 should hang on to every scrap of paperwork. Signed agreements, receipts, financing documents, system designs and permit filings will likely be crucial to show that owners relied on the earlier tax-credit guidance. Sunspear Energy and other advisers have been urging customers to assemble that documentation now rather than scrambling later.
On top of state rules, commercial installers are warning that federal safe‑harbor and placement‑in‑service rules come with their own ticking clocks. Developers chasing the remaining federal incentives may need to break ground by early July to lock in certain federal credits, a schedule PV Magazine notes could force some projects into a sprint.
What happens next
State agencies, including the Department of Taxation and the Hawaii State Energy Office, are expected to roll out detailed guidance soon that will spell out how the executive order is applied in practice. Green has also signaled he intends to work with lawmakers and the private sector on longer term fixes. Industry leaders, however, say the clock is already ticking if they hope to salvage projects and financing before investors decide Hawaii's solar market is too risky. Office of the Governor
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