By Nick Holden, Senior Regulatory Engineer, Discovery Energy Systems 

 

Tl;dr

• UL 9540 is a safety standard for certification of Energy Storage Systems (ESS’s)
• UL 9540a is a test method for gathering data and  assessing an ESS’s ability to withstand a thermal runaway event, but doesn’t offer a pass or fail verdict
• Manufacturers use UL 9540a test results along with other compliance efforts to obtain UL 9540 certification
• The UL 9540a test method is a comprehensive, four-step procedure evaluating an ESS starting with individual cells, battery modules, to the complete energy storage system
• Consumers should choose energy storage systems with UL 9540 certification for peace of mind and safety
• Be cautious of confusing terminology regarding certifications like "UL 9540a certified"
• Proper certification like UL 9540 for ESS' is required for installation approval in certain regions, such as major urban areas of California
• Prioritize finding a qualified professional who understands the importance of UL 9540 certification when choosing a solar installer
  
• For an example of a UL 9540-certified energy storage system, please see our AES Rackmount Slimline Enclosure here:
  https://discoverlithium.com/products/lithium-batteries/aes-rackmount 
  
  

Harnessing the power of the sun is a fantastic way for homeowners to save money, become more energy-independent, and help our planet. However, when it comes to storing solar energy, safety is paramount. Certifications have been established to ensure the safety of consumers, but two terms often cause confusion: UL 9540 and UL 9540a.

What is UL 9540?

While UL 9540 and UL 9540a sound similar, they play very different roles. UL 9540 is a safety standard and is considered the industry benchmark to ensure energy storage systems work safely. UL 9540 is approved by the American National Standards Institute (ANSI) and the Standards Council of Canada (SCC). To meet the standard, energy storage systems must comply with strict requirements for construction methods, system safety, and system performance and perform up to specified levels on a series of tests, including UL 9540a.

What is UL 9540a? 

UL 9540a, on the other hand, is a test procedure. It assesses an energy storage system’s response to thermal runaway, a potentially dangerous situation where a battery enters an uncontrolled, self-heating state. The test gathers data on how the battery responds but doesn’t offer a pass or fail verdict. Think of UL 9540a as a single hurdle within the bigger race of achieving 9540 certification. Manufacturers use the 9540a test results along with other compliance efforts to obtain certification from an authorized third-party agency for UL 9540.

What are the steps of the UL 9540a test procedure?

The UL 9540a test is a comprehensive, four-step procedure that starts with testing the individual components and ends with testing the product as a whole. The first step, the cell level test, evaluates an individual battery cell. It’s forced into thermal runaway in a pressure vessel, and the gasses produced are gathered and analyzed. If the cell test triggers thermal runaway, the process moves to the module test.

 

This test assesses how the module handles a runaway cell. The goal of the module test is to evaluate how the battery responds when cell-to-cell propagation occurs. This is done as an iterative process starting with forcing thermal runaway in a single cell, and monitoring whether it propagates to adjacent cells. If yes, the flammable gases are collected and analyzed. If cell-to-cell propagation does not occur, the test is repeated but starts with forcing two cells into thermal runaway and monitoring for propagation. Then if needed, three cells, etc.

 

The third step, the unit-level test, evaluates the complete energy storage unit as installed per the manufacturer's installation instructions. Using the same method determined in the Module level test, a runaway event is simulated in one of the modules, and the test observes the temperature rise in the cabinet, whether any fire escapes the enclosure to adjacent units, overall safety performance, and how a thermal runaway event in one ESS will affect adjacently installed ESS's.

 

Finally, if the unit-level test reveals any safety hazards, such as escaping flames, the installation-level test is conducted. It evaluates potential risk mitigation strategies, such as creating specific installation instructions and limitations of installation locations.

 

What certification should homeowners and installers look for when assessing home solar batteries?

Consumers can achieve peace of mind by choosing an energy storage system that is certified to the UL 9540 standard. This rigorous process, conducted by an independent third-party agency, ensures home batteries meet strict safety standards, lowering the risk of fires and other potential hazards. Certification to UL 9540 standards involves simulating real-life scenarios during testing, providing an extra layer of confidence in the safety of a chosen solar battery system.

 

Unfortunately, some manufacturers use confusing terminology regarding certifications. This can make it difficult to know if a product is truly safe. Consumers should be cautious of manufacturers claiming their products are “UL 9540a certified.” While the test is part of the UL 9540 certification process, simply undergoing the test doesn’t guarantee that the product is safe to use. Similarly, claims of “designed to UL 9540a or UL9540” or “tested to UL 9540 or UL 9540a'' offer little assurance. These could indicate testing was performed on a preliminary component but not the whole product, or even that the test results were unsatisfactory. Look for wording like “UL 9540 listed” or “certified” to indicate the ESS has undergone independent third-party evaluation and certification to ensure it meets all requirements of the standard.

 

It’s a good idea to visit manufacturers’ websites and look for their energy storage systems’ test results and certifications. However, it’s important to be wary of any incomplete reports that only show the first page or two. Below are examples of a UL 9540 certificate and the first and last page of a UL 9540a test report.

 

Figure 1. Discover Energy Systems’ AES Rackmount Slimline Enclosure’s UL 9540 certificate.

 

Figure 2 & 3. The first and last page (pg. 1 & 38)  of Discover Energy Systems’ AES Rackmount Slimline Enclosure’s UL 9540a test report

Why do you see confusing language around UL 9540 and UL 9540a in the solar battery market? 

New solar battery technology is growing incredibly fast, and the regulations are changing just as quickly. Manufacturers may find it challenging to keep up with the various regulations in this rapidly evolving landscape. Since its introduction in 2016, the UL 9540 standard has undergone three revisions. The technical and legal language used in the standards can also be difficult to understand. For overseas manufacturers relying on translation tools, a few misplaced words can lead to significant misunderstandings.

 

At the end of the day, the installation likely won't be approved in certain places, such as California, without ESS certification to UL 9540. Proper certification ensures a safe installation, saving consumers time and money and preventing potential delays.

 

Why UL 9540 is important

When choosing a solar installer, prioritize finding a qualified professional who understands the importance of selecting products that are certified to UL 9540 standards. This ensures a safe and inspector-approved installation, saving you time and money in the long run. Their expertise can ultimately mean the difference between a smooth installation and costly delays.

 

While solar power offers a path toward energy independence and a greener future, safety remains a top priority, especially when it comes to battery storage. Don't be misled by confusing terminology. UL 9540 certification is the gold standard, ensuring a battery system meets strict safety protocols through rigorous testing. This translates to peace of mind for consumers, knowing their home is equipped with a safe and reliable energy storage solution. It’s important to remember that certification to UL 9540 standards is also mandatory for installation approval in many areas. By prioritizing safety and choosing a UL 9540-certified system and a knowledgeable installer, consumers can confidently embrace the future of solar power.

For an example of a UL 9540-certified energy storage system, please see our AES Rackmount Slimline Enclosure here:
https://discoverlithium.com/products/lithium-batteries/aes-rackmount 

- By Nick Holden, Senior Regulatory Engineer, Discovery Energy Systems

In an energy storage system, “closed loop” refers to the digital communication and control between different components from different manufacturers.

In a battery energy storage system (BESS), the battery management system (BMS) shares with the inverter-charger the battery's present state of charge (SOC), voltage, current and cell temperature as well as the requested charge voltage and current. The inverter-charger uses the information shared by the BMS to adjust its charge settings, thereby closing the loop (see diagram below).

 

Figure 1. Closed-Loop Communication

Conversely, an “open loop” system refers to a charging system where the battery BMS does not share information with the inverter-charger during the charging process. In an open-loop system, you must manually program the inverter-charger with fixed charge parameters. And potentially use external tools, such as a battery shunt or temperature compensation sensor, to give the inverter-charger information about the current, battery temperature, and calculated battery SOC.

 

Benefits

A closed-loop charging system offers many benefits.

1) Safety

Closed-loop charging supports battery safety by enabling features embedded in the BMS to interact with the charging system’s controls. This typically results in alarms or warnings requesting to stop the charge or discharge.

 

2) Ease of configuration

Given the automatic communication of the parameter values, the configuration of a closed-loop charging system is much easier than the manual process of configuring settings for an open-loop system.

 

3) Faster Charging

A closed loop system enables the communication of dynamic charge voltage requests, which can speed up the charging process. Up to 25 to 40% faster than open loop charging.

 

4) Monitoring

A closed-loop system can allow the inverter-chargers monitoring system to display accurate battery SOC and other parameters provided by the BMS.

 

Battery Management Systems (BMS) and Safety

A BMS in a closed-loop charging system can communicate with other devices in the system enabling safety mechanisms. Typically, the BMS prevents charging when there is over-temperature, under-temperature, over-voltage, or over-charge current. The BMS also typically prevents discharge when there is over-temperature, under-temperature, under-voltage or over-discharge current. Except for an under voltage condition, the BMS In a closed-loop system can also communicate that the issue has been cleared and automatically enable discharging or charging to resume.

For example, if a lithium battery is charged when it is below 0 °C (32 °F), the battery loses capacity and its internal resistance is permanently increased before ultimately failing. To avoid under-temperature charging, the BMS in a closed-loop system can terminate the charging process when the battery cell temperature is below 0 °C (32 °F) and restart when cell temperatures rise above the threshold.

A good example of this is the BMS in Discover’s AES RACKMOUNT lithium battery, which is configured to operate only in a safe temperature range. It stops receiving a charge when the battery cell temperature is below 4 °C (39.2 °F) and only resumes charging after 120 seconds have elapsed and the battery cell temperature is 4 °C (39.2 °F) or higher. Discover also offers a AES RACKMOUNT battery model that comes with internal heating that allows it to maintain operating in colder climates.

 

Configuration

A closed-loop system minimizes the amount of setup required by enabling the BMS to automatically communicate the charging parameters to the inverter-charger.

To enable closed-loop communication, the BMS must use the correct inverter-charger protocol and be hardwired, usually by CAT5 cable, with the inverter-charger. Many batteries come pre-installed with the preferred protocol. However, the wiring of CAN High, CAN Low, and CAN Ground and serial cable signals differ between inverter chargers. This can often be confusing to installers and requires the ability to crimp and install custom CAT5 crossover cables correctly. Always, refer to the inverter-charger documentation for wiring information.

Batteries networked in closed-loop communication with the power conversion system must also take into account the state of charge across multiple batteries which is often coordinating the output of multiple inverter-chargers. How battery data is amalgamated and whether an inverter-charger acts as a client or server needs to be coordinated. To do this many Lithium batteries require the manual setup of the master-slave relationship between batteries and power conversion equipment using DIP switches on the battery modules.

An advantage offered by Discover’s lithium battery systems is the LYNK II Communication Gateway, which supports closed-loop communication between Discover Lithium batteries and various brands of inverter chargers. The LYNK II provides a protocol gateway between the inverter-charger network and the Discover Lithium battery network.

LYNK II is also used to select signal wiring requirements of the inverter-charger so that no crossover CAT5 cables are required. In most cases, no further setup is required, as Discover lithium batteries manage the battery network automatically.

 

Figure 2. LYNK II between a Discover Lithium Battery Network and the inverter Protocol Network.

 

Dynamic Charging

In addition to communicating basic battery information, such as the battery capacity, battery SOC, and maximum charge parameters (voltage, current), some inverter chargers support receiving dynamic charge requests from the battery.

Dynamic Charging in a closed-loop system enables faster charging than is normally possible with the conservative static charge voltage targets used by an open-loop system. Lithium batteries with Dynamic Charging firmware continually send to the inverter-charger the safe, but optimized voltage and current

settings. In a closed-loop system, the inverter-charger receives these parameters and dynamically adjusts the charge settings.

With dynamic charging, the system automatically adjusts to overcome voltage losses due to cable and terminal resistance and balances the cells at the end of the charge cycle. This results in a longer bulk phase (maximum current) and a shorter absorption phase.

The graph below compares both the static charging and dynamic charging of a Discover Lithium Battery.

 

Figure 3. Open-Loop vs. Closed-Loop charging times of a Discover Lithium Battery.

 

Dynamic Cell Balancing

The balancing of battery cells reduces the uneven aging of the cells.

At the end of the charge cycle, as the battery approaches 100% SOC, the BMS adjusts down the overall charge current but forces voltage to rise slightly causing any cell that has diverged from the lowest voltage cell to continue absorbing current safely.

Unfortunately, in an open-loop charging system, maintaining a high target balancing charge voltage often causes individual cells to trigger battery over-voltage protection, which prematurely stops the overall cell balancing process. This results in a shorter balancing period with cells remaining unbalanced. This shortens the useful battery life.

A BMS with Dynamic Balancing controls the target voltage to within a safe range avoiding the premature stoppage of the process. The result is a longer, more thorough cell-balancing process that delivers the longest useful battery life possible.

 

Conclusion

The BMS delivers safety, allowing the battery to operate only within acceptable limits. The BMS will provide charge parameters to the inverter-charger in a close-loop system enhancing safety and simplifying system configuration. Some BMS will also deliver fast dynamic charging, and dynamic cell balancing in a closed-loop system.

For information about the batteries offered by Discover Energy Systems, please visit: https://www.discoverlithium.com

“Eureka,” California’s state motto since 1963, meaning “I have found it,” resonates with state residents looking for financial savings and a reduced carbon footprint as they discover the Golden State’s robust solar programs and incentives. California is a leader in renewable energy, especially solar power. The state generates approximately 33% of the total solar supply in the United States, making it the highest solar producer in the nation. It has led the country in solar energy adoption over the past decade and provides a range of incentives to support homeowners in their transition to solar power. 

California's solar programs go beyond promoting the adoption of solar panels and add-on battery storage - they also contribute to lowering the overall cost for homeowners. The appeal of solar in California is heightened by the state's efforts to increase accessibility, through thoughtfully designed programs catering to low-income households. California residents can rest assured that their solar investments are protected as the state has a set of laws in place, ensuring that homeowners' rights to own solar panels are secure. This promotes widespread solar access while preventing unnecessary restrictions. These measures make the sun-soaked state of California an ideal place to invest in solar energy.

 

What Incentives Are Available for California Residents?

California Tax-Based Solar Incentives

Property-Assessed Clean Energy (PACE)

The PACE program – known as the Home Energy Renovation Opportunity (HERO) program in California – provides an avenue to go solar with zero money down. It offers accessible solar financing, providing owners with affordable payment options. This agreement involves collaboration between local or state governments and traditional financiers, who fund the initial project costs. Homeowners then repay their local authority through an increased property tax bill, usually spread over 20 years.
Making it even more attractive, the obligation to settle the debt upon sale or refinance is removed. The high security of loan payments tied to the property tax bill contributes to low-interest rates, making the program a win.

 

The Investment Tax Credit (ITC)

The ITC, is a significant benefit, reducing the income tax burden by 30% of the total system installation costs. It’s important to note that California does not offer a specific state-level tax incentive for solar installations.
The federal solar tax credit covers a substantial portion of installation costs for a solar PV system. Currently set at 30%, this rate will remain until 2032, decreasing to 26% in 2033 and 22% in 2034. The credit is set to end by 2035 unless renewed by the federal government.

 

California Net Metering (NEM 3.0)

This program is a perk for homeowners with solar panels, enabling them to earn credits for any excess electricity they produce and send back to the grid. The credits can offset the electricity consumed from the grid during times when solar production is lower, resulting in additional savings on electricity bills.
California changed its net metering policy to Net Energy Metering 3.0 (NEM 3.0) last year. Under this revised policy participants have the opportunity to sell excess solar energy to local electric companies in exchange for power bill credits. By leveraging the new NEM 3.0 billing tariff alongside a solar plus battery system, participants can offset their power bill by as much as 70-90%.

 

California Solar Property Tax Exclusion

In California, the property tax incentive for the installation of an active solar energy system takes the form of an exclusion, rather than an exemption. The Active Solar Energy Exclusion is categorized as a “new construction exclusion,” meaning that the installation of a qualifying solar energy system will not result in either an increase or a decrease in the assessment of the existing property. This exclusion applies to any active solar energy system constructed or completed before January 1, 2027. Even after the exclusion period ends, any solar energy system previously excluded as new construction will remain exempt from property tax until the property changes ownership.

 

California Solar Programs for Affordable Housing

Self-Generation Incentive Program (SGIP)

The SGIP is an initiative that provides rebates for solar installations combined with battery storage. Those eligible for the SGIP rebate include residential customers of Pacific Gas and Electric Company, Southern California Edison, Southern California Gas Company, and San Diego Gas and Electric. Beyond the general program, two additional categories provide higher rebates: Equity and Equity Resilience. Participating in this program can result in substantial savings, approximately around $200 per kilowatt-hour (kWh) for solar battery systems.
Under the Equity category, eligible participants can benefit from a rebate that covers approximately 85% of the cost of an average energy storage system. For those who qualify for the Equity Resiliency category, the rebate goes even further, covering close to 100% of the cost of an average energy storage system.

 

Disadvantaged Communities – Single-Family Solar Homes (DAC-SASH)

This program offers subsidies for the installation of solar energy systems ranging from 1 to 5 kilowatts. This initiative is specifically designed to assist homeowners who may face financial constraints that would otherwise make solar installation unaffordable. For eligible homeowners, DAC-SASH provides nearly cost-free installation, presenting an opportunity to save up to $3 per watt through upfront solar rebates.

 

Local Incentives

The federal and state solar tax incentives in California emerge as the best options for saving money and maximizing returns with a solar array. Additionally, there are some local incentives available, depending on location and the utility company that services the property, which can further enhance the benefits. Most of these local incentives are easy and quick to apply for and can save participants hundreds or even thousands of dollars, so they’re well worth the time and effort it takes to enroll. More details can be found at https://www.consumeraffairs.com/solar-energy/california-solar-incentives.html

 

Who Can Apply?

California residents are in luck as they have the opportunity to benefit from various tax incentives by opting to install solar systems. These incentives enable both home and business owners to deduct a portion of the installation expenses from their tax obligations. Once the solar system is installed, the owner assesses the overall eligible cost, multiplying it by the tax credit rate. This determines the exact credit amount available for deduction from the individual or business's total tax liability for the given year. It's a straightforward way for Californians to reap the benefits of solar energy while enjoying some tax relief.

Combining California Solar Incentives with the ITC/Residential Clean Energy Tax Credit

There is no state tax credit for solar equipment in California, but all California residents are eligible for the federal investment tax credit. This federal incentive grants an income tax credit equal to 30% of the entire installation cost. On average, this tax credit alone can save participants just under $5,000, provided they owe enough in taxes to utilize the entire credit. The state offers other solar incentives — like net metering and solar financing programs — which can be combined with the ITC to maximize returns on solar installation.

An October 2023 survey by the MarketWatch Guides team indicates that around 91% of 120 California residents surveyed have used at least one incentive to reduce the cost of solar panel installations. Despite the state's reduction in net-metering credits, there are still opportunities to save money, especially when opting for high-performing solar panels paired with solar storage.

 

What Steps Are Needed to Take Advantage of the California Solar Incentives?

It is recommended that applicants review each program’s requirements, prepare all necessary documentation in advance, and seek guidance from a tax professional or the solar power installer.

 

Property-Assessed Clean Energy (PACE)

1. Applicants must contact their PACE program administrator. The Department of Financial Protection & Innovations (DFPI) provides a list of program administrators.

2. Provide the required information, which may include contact information, an income verification letter from the applicant’s employer, tax returns from previous years, and other documents.

3. Connect with a PACE-approved solar panel installation company through the program administrator.

4. Move through the solar installation process with the installer and then provide the final details to the program administrator.

 

Investment Tax Credit (ITC)

1. Applicants must fill out IRS form 5695 from the IRS’s website.

2. Prepare documents: these may require information about the solar installer, the capacity of the solar system, and the address where the system is installed.

3. Applicants should file the completed form alongside their taxes.

 

California Net Metering

1. Applicants must request an interconnection application from their electric company.

2. Fill out the application. Applicants will need to supply information about the system capacity, the expected generation, and the installer’s contact information.

3. Pay the interconnection application fee. This might be included in the solar installer’s estimate, so check before paying it separately.

4. Submit the application and proceed with the rooftop solar installation.

5. Once the system is installed and connected, the utility provider will likely need to inspect the connection before approving the applicant for net metering.

 

California Solar Property Tax Exclusion

If a developer installs an active solar energy system while constructing a new building, the initial purchaser of that building may receive the exclusion if:

1. The building was completed on or after January 1, 2008.
2. The developer/builder did not receive the exclusion.
3. The purchaser files a form with the assessor.
4. Claim the form BOE-64-SES (Initial Purchaser Claim for Solar Energy System New Construction Exclusion) from your local county assessor’s office.
5. Fill out and submit the form.

 

Self-Generation Incentive Program (SGIP)

1. Applicants must go to their energy company’s SGIP page:

• • Pacific Gas & Electric (PGE)
  • San Diego Gas & Electric (SDG&E)
  • Southern California Edison
  • Southern California Gas Company (SoCalGas)

2. Check for eligibility and fill out the form provided.
3. Submit the form along with any other required documents.

 

Disadvantaged Communities – Single-Family Solar Homes (DAC-SASH)

1. Applicants begin by checking eligibility on the GRID Alternative website. They must own a home in California to qualify for this program.

2. A program administrator will reach out to obtain any documentation required, including an income verification.

3. A program administrator will walk applicants through the next steps, which include finding a certified installer and getting the system installed and running.

 

Sunny Savings 

California, famous for its breathtaking beaches, iconic surf, abundant sunshine, and majestic mountains, has a rich history of embracing its natural wonders. With a strong commitment to environmental consciousness, it’s no surprise that the Golden State is at the forefront of the renewable energy movement. The state’s solar incentives make going solar an easy and appealing choice for residents, saving them money while moving towards a greener future and brighter future, all while preserving the natural beauty that defines California. For more information on California’s solar incentives please seek guidance from a tax professional or your solar power installer.

References

https://todayshomeowner.com/solar/guides/california-solar-incentives/

https://www.consumeraffairs.com/solar-energy/california-solar-incentives.html

https://www.forbes.com/home-improvement/solar/california-solar-incentives/

 

Find Policies and Incentives by State:

https://www.dsireusa.org/

Living in Hawaii isn’t just about sun-kissed beaches; it’s also a paradise for those considering investments in renewable energy solutions. The state’s strong commitment to renewable energy, coupled with its traditionally high utility rates, present an opportunity for substantial savings. With an ambitious goal of achieving 100 percent renewable energy by 2045, Hawaii has introduced numerous incentives to turn this vision into reality. Residents who meet the criteria stand to benefit from Hawaii’s robust solar incentive programs, potentially saving over $10,000.

The popularity of solar panels in Hawaii continues to rise, thanks to the abundant sunshine that allows residents to harness solar power to meet their electricity needs while avoiding the environmental issues associated with fossil fuels. This, in turn, leads to a decrease in electricity bills, ensuring long-term cost savings. The state of Hawaii sweetens the deal by offering a variety of financial incentives, including tax credits, grants, and loans, making solar installation financially feasible for its residents.

What Incentives Are Available for Hawaiian Residents?

• Renewable Energy Technologies Income Tax Credit - A major incentive for Hawaii taxpayers who own solar panels. This substantial credit reduces state income taxes by 35% of the approved system cost and installation, with a maximum value of $5,000 per system. It is a one-time assessment during tax filing after installation, and any unused credits can be carried over to subsequent years. This credit can be stacked with the ITC for additional savings. 

• Federal Solar Investment Tax Credit (ITC) - Provides a credit to your income tax liability for 30% of your entire conversion cost. This includes panels, batteries, inverters, and labor. Assessed once during tax filing after installation, with unused credits carrying over for up to five years in total. On average, participants receive $4,406.

• Community Renewable Energy Program - Allows homeowners access to community solar with a credit for all consumed energy. Enrolled customers continuously receive bill credits for the energy they pull from their community solar farm. Recipients receive $19,116 in credits on average, based on consumption and location.

• GreenSun Hawaii - A solar financing option that minimizes interest rates and offers longer terms than loans offered outside of the program. The program’s goal is to provide financing options that will result in lower monthly payments compared to the customers' current utility bills. 

• Green Energy Money Saver (GEMS) Program - A financing program for low-income households, making solar energy systems more affordable and accessible. Participating customers can conveniently pay back the cost of installing solar equipment through their monthly utility bill with no upfront costs. The minimum financing amount for residential customers is $5000, with no specified maximum limits. 

• Battery Bonus Program - This program pays a cash incentive and bill credits to residential and commercial Hawaiian Electric customers who add battery storage to their solar systems. Participants must commit to using and exporting a set kilowatt amount for two consecutive hours daily. In return, they can receive three types of incentives: a one-time check for up to $4250, a monthly capacity bill credit of $25 for the 10-year duration of the program, and for non-Net Energy Metering customers, and a monthly export bill credit averaging $63. No new applications for the Battery Bonus program are being processed on Oahu as it has reached its maximum capacity of 40 megawatts. However, the program will remain available to Maui customers until June 30, 2024, or until a cap of 15 megawatts is reached. 

• Bring Your Own Device (BYOD) Program - Building on the success of the Battery Bonus program, a follow-up program, BYOD, will be open to Hawaiian Electric customers starting on March 1, 2024. This program provides incentives for customers to incorporate battery storage into new or existing solar systems. Participants are eligible for a one-time upfront payment of up to $500, or $1000 for those with low and moderate incomes. Additionally, there is a monthly capacity incentive of $5 to $10 per kilowatt depending on the level of commitment. Customers can also accumulate bill credits for controlled energy exports during specific periods designated by Hawaiian, referred to as BYOD events. 

• Net Energy Metering (NEM) - ONLY AVAILABLE TO CUSTOMERS WITH EXISTING NEM AGREEMENTS - The program provides credits towards future electric bills for any surplus energy generated by their systems and fed back into the grid. Participation in NEM can result in an average lifetime savings of just under $50,000. Hawaii also recently introduced the NEM Plus program, allowing NEM participants the flexibility to install new panels, battery storage, or a combination of both.

• Local Incentives - Rebate programs and other incentives are offered by utility providers, specific cities, and other local entities. The savings vary based on the incentive, system size, and location.

Who Can Apply?

Homeowners and some renters may qualify for federal and state tax credits for renewable energy-related expenses. These tax credits apply to various energy-efficient appliances, such as solar panels for generating electricity, backup power battery storage for home (with a capacity exceeding 3 kWh), solar water heating systems, and other approved energy efficiency enhancements.

Combining Incentives with the ITC

The Clean Energy Investment Tax Credit (ITC) is available nationwide, providing property owners and occupants who install solar panels in residential or commercial properties with a federal tax credit equivalent to 30% of the project costs. While the incentive extends to secondary homes, landlords or other property owners who do not reside in the home are ineligible to claim the credit.

For those looking to install a solar system, the potential for savings is significantly enhanced by combining the various solar incentives with the ITC. This approach ensures that the financial benefits are maximized while contributing to a more sustainable and eco-friendly future. For more detailed information, it is recommended to consult with your tax advisor or accountant.

 

Steps to Leverage the ITC:

Claiming the federal credit is straightforward, but consult your tax professional to ensure eligibility. When you're ready to benefit from this advantage, follow these steps:

• Step 1: Complete your home solar project.

All receipts for labor and equipment should be kept on hand for filing purposes when claiming these credits come tax time.

• Step 2: When you’re ready to file your taxes for the year you converted to solar, fill out IRS form 5695, which is for claiming residential energy credits.

Any individual or corporate taxpayer who is eligible to claim the renewable energy technologies income tax credit for 10 or more systems or distributive shares of systems installed and placed in service in a single tax year must fill out Form N-342 and attach it to their state tax return

• Step 3: Fill out the form(s). You’ll need system capacity information, the total conversion cost, information about your installer, and personal information.
• Step 4: File the completed form alongside your taxes, or have your accountant include the form(s) in your filing. If you use filing software, your tax software will ask whether you’ve completed a home solar project and guide you through the process of claiming the tax credit.

Sunny Savings 

Hawaii boasts more attractive solar programs than most other states. With solar incentives and rebate programs, Hawaiian taxpayers have the potential to save over $10,000 upfront. This means solar systems pay for themselves much faster leading to boosted energy savings over time. 

Currently, over 17% of Hawaii’s energy is powered by solar and this number is expected to grow. By installing solar systems and leveraging these incentive programs, residents of Hawaii can actively contribute to a sustainable future while enjoying the financial benefits of abundant sunshine for years to come.

References

https://www.eesi.org/obf/case-study/hawaii

https://www.ecowatch.com/solar/incentives/hi

https://www.forbes.com/home-improvement/solar/hawaii-solar-incentives/

https://www.forbes.com/home-improvement/solar/hawaii-solar-incentives/

https://www.forbes.com/home-improvement/solar/hawaii-solar-incentives/

https://www.hawaiianelectric.com/products-and-services/customer-renewable-programs/rooftop-solar/battery-bonus

https://www.revolusun.com/battery-bonus/

 

Find Policies and Incentives by State:

https://www.dsireusa.org/