HI SB665

Restructures Hawaii's renewable energy tax credit by replacing the general "renewable energy technology systems" credit with separate credits for solar energy property, wind energy property, and energy storage property, effective for taxable years beginning after December 31, 2017.

Establishes tiered tax credit percentages declining over time: 25% of basis (2018-2020), 20% (2021-2023), and 15% (2024 onward) for solar and wind energy properties, with varying cap amounts by property type ($2,250-$5,000 for residential solar water heating; $5,000-$10,000 for residential solar electricity; $1,500 for residential wind).

Adds new tax credit provisions for energy storage property (batteries, grid-interactive water heaters, and similar equipment) at the same tiered percentages and caps as other renewable energy systems, and allows combined credits for integrated solar-plus-storage systems.

Defines "basis" to align with federal Internal Revenue Code sections 25D and 48, excluding structural repairs like reroofing from the credit basis while including mounting equipment and roof sealing costs.

Establishes a state building energy efficiency demonstration project within the Department of Transportation to construct or renovate a net-zero emissions facility and report to the legislature by 2020 on cost-benefit analysis and payback periods.