Hawaii has entered new territory when it comes to reaching our renewable energy goals. If we’re going to rid ourselves of imported fossil fuels and truly achieve energy independence, we need to make our renewable energy sources work for us steadily around the clock — even when the sun isn’t shining and the wind isn’t blowing. Doing that requires energy storage, the key component that can allow us to make the most of the many indigenous energy sources available in Hawaii. Energy storage is key, but what is the best path forward?

That’s the question currently before the state Legislature with House Bill 2291 and Senate Bill 2738, which seeks to create an incentive for energy storage. Legislators must decide between two different pathways: one which amends the existing renewable energy investment tax credit (REITC) to pay for an energy storage tax credit, and one which creates a new incentive by carving a rebate out of the Green Infrastructure Financing program (GEMS). We believe that the REITC pathway provides the most value and sense — here’s why.

First, the REITC allows taxpayers to apply for a variety of energy storage types. Energy storage comes in many forms from battery storage, grid-interactive water heaters, and ice storage air conditioners — all of which are smart, innovative means to harvest excess energy for later use. In contrast, the rebate limits the credit to one kind of storage — battery storage — in addition to placing particular parameters on the battery size and income limits. As it currently reads, the rebate may only work for a handful of select companies. Meanwhile, the REITC pathway will work across a broad spectrum of technologies that any company can tap into.

Next, the REITC works with an existing incentive framework, and will take on new systems as the market develops in Hawaii. The REITC pathway allows time for consumers to make an informed decision about their energy storage needs. In contrast, the rebate creates an urgent “buy now” dynamic, where the customer must buy early to ensure they obtain the rebate before the fund runs out. The REITC allows the many solar developers in Hawaii time to adapt their business models, provide the best equipment, train their staff, and transition smoothly into hybrid solar-plus-storage offerings.

Finally, and perhaps most importantly, the REITC pathway saves the state money as it ramps down the existing solar energy tax credit over time, and moves those funds to energy storage that has the potential of allowing more renewable energy onto the grid while providing valuable grid flexibility and services for the benefit of all ratepayers.

In contrast, the rebate raids the existing GEMS fund by taking $50 million from the fund. The GEMS fund was designed as a financially self-sustaining loan mechanism that would leverage economies of scale, whereas the rebate program is a subsidy without certainty for replenishment from future legislatures.

Let’s be innovative to increase renewable energy in Hawaii through energy storage and do it in an efficient and budget friendly method for all ratepayers and taxpayers.