Hawaii Incentives and Workforce Development Guide

For a list of Hawaii economic development agencies that can help with the site selection process, visit our Online Site Seekers’ Guide.

FINANCING & GRANTS

CBED Micro-Loan Program: Part of the State Department of Business, Economic Development and Tourism. This program is designed to financially assist community-based enterprise in providing a diversification of opportunities that create jobs, strengthen community identity, retain or create community cultural anchors and reinforces community social, cultural, economic and spiritual values. Each loan shall bear a simple interest rate of not less than 3% and not more than 10% a year. 3% interest will be granted for all new loans for up to the first two years. The loans shall be for an amount not to exceed $25,000 and for a term not to exceed 10 years. Conventional financial institutions traditionally do not provide loans to establish or expand community-based enterprises. Consideration for loans under this chapter shall be extended only to applications from organization, small business or enterprise engaged in community-based development industries, including traditional industries that meet the following requirements:

  • Not able to obtain a loan from private and/or other public financial institutions;
  • Furnishes information to show that the applicant has the ability to repay the loan out of income from the business;
  • Shall apply for all applicable licenses and permits;
  • Shall satisfactorily demonstrate to the department that it can operate on a sound financial basis.

GreenSun Hawaii: To help Hawaii property owners (single- and multi-family, nonprofit and businesses) make energy efficiency and renewable energy retrofits to their homes, apartment complexes and facilities, the State of Hawaii created GreenSun Hawaii, a credit enhancement program funded by a $2.72 million U.S. Department of Energy grant under the American Recovery and Reinvestment Act of 2009. Administered by the Hawaii Community Reinvestment Corporation (HCRC), the program provided local financial institutions with access to a loan loss reserve (LLR) which covered up to 100% of actual losses, which enabled participating lenders to extend loan availability to a larger pool of customers and offer more aggressive rates and terms. GreenSun Hawaii helped to finance ENERGY STAR refrigerators and air conditioning systems, solar thermal hot water systems, solar electric photovoltaic (PV) systems, heat pumps, and insulation installed with an ENERGY STAR air conditioner for residential purposes. For non-residential purposes, the loan used to finance lighting and air conditioning retrofits and upgrades; solar thermal and solar electric (PV) systems; energy efficiency windows, cool roofs and other installations eligible for Hawaii Energy/KIUC rebates; and loan related fees. GreenSun Hawaii is in a 6-year close out period so no loan applications are being accepted.

Hawaii Small Business Innovation Research Program (SBIR): A $2.2 billion three-phased federal program that provides small businesses the opportunity to win federal R&D awards. Hawaii-based companies that receive federal Phase I feasibility study SBIR awards can apply for funds from HTDC¹s Hawaii SBIR Matching Grant program. The matching grants provide up to 50% of the Phase I award to assist companies with enhancing their Phase I project development, compete for the more lucrative Phase II awards to typically conduct prototype development, and ultimately reach successful commercialization. Hawaii-based companies new to SBIR can apply for funds from HTDC¹s Hawaii SBIR Phase 0 Grant program. The grant provides up to $3,000 to companies submitting a competitive Phase I SBIR application. The purpose of the Phase 0 Grant is to assist applicants strengthen their proposal, e.g. through professional grant writing assistance. This grant is open to Hawaii companies that have:

  1. a) Submitted fewer than three SBIR applications and
  2. b) demonstrate financial need.

Hawaii Strategic Development Corporation (HSDC): An agency of the State of Hawaii established in 1990 to promote technology based economic development and economic diversification in the state through return driven investment programs in partnership with private capital. HSDC is precluded by law from investing in retail businesses, housing construction and the tourism sector. HSDC co-invests via a “fund of funds” approach and does not invest directly into companies. Investment programs target three key areas which comprise the major gaps in technology based economic development:

  • Supporting the establishment of an entrepreneurial ecosystem that will provide mentoring, collaboration and funding opportunities for Hawaii entrepreneurs to establish and scale their business ventures;
  • Partnering research commercialization activities with state and private-industry programs to establish high-growth businesses; and
  • Networking Hawaii¹s high-growth businesses into the broader universe of mainland and international investment funds active in the sectors important to Hawaii.

Innovate Hawaii (IH): A federal program administered in Hawaii by the State’s High Technology Development Corporation and designed to bring best practices to small and medium-sized manufacturing and pre-manufacturing businesses at an affordable cost. IH helps manufacturers in all industries find, save and make money. It is a general practitioner, providing a wealth of knowledge and meeting various industry-specific needs (e.g., construction materials, management consulting, electronics, metals, secondary wood, textile).

 

TAX INCENTIVES

Corporate Tax Credit for Solar and Wind Energy: Allow individuals or corporations to claim an income tax credit of 20% of the cost of equipment and installation of a wind system and 35% of the cost of equipment and installation of a solar thermal or photovoltaic (PV) system. A new provision was added to the tax credits in June 2009 allowing the tax credit to be refundable under certain conditions. For solar energy systems, a taxpayer can reduce the eligible credit amount by 30%. If this reduced amount exceeds the amount of income taxes to be paid by the taxpayer, the excess credit will be refunded to the taxpayer. Consult with your tax advisor as to how this credit may pertain to your specific project.

Hawaii Enterprise Zones Partnership: A joint state-county effort intended to stimulate—via tax and other incentives—certain types of business activity, job preservation and job creation in areas where they are most appropriate or most needed. Up to six zones can be designated per county. If a business (or a branch of business) is eligible and is located in an Enterprise Zone (EZ), it can reduce its state taxes and receive other county benefits for up to seven years by satisfying the EZ hiring and gross receipts requirements.

Motion Picture, Digital Media & Film Production Income Tax Credit: A refundable tax credit based on a production company¹s qualified Hawaii expenditures while producing a qualified film, television, commercial or digital media project. The credit was increased July 1, 2013 and now equals 20% of qualified production costs incurred on Oahu, and 25% on the neighbor islands (Big Island, Kauai, Lanai, Maui, Molokai). The credit cap was also increased from $8 million to $15 million per production.

Research Activity Tax Credit: A refundable tax credit equal to 20% of increases in qualified research expenses incurred in Hawaii.Eligible research expenses are the same as those in sections 41 of the Internal Revenue Code (IRC), as that section was enacted on December 31, 2011, and in section 280C(c), IRC, provided that the expenses must be incurred in Hawaii. To qualify for the tax credit, the taxpayer must also claim a federal tax credit for the same expenditures. The tax credit is available for tax years beginning after December 31, 2012 and will sunset after December 31, 2019.

Royalties Tax Exemption: Royalties derived from performing arts products are excluded from a Hawaii taxpayer¹s income and not subject to state income tax.

 

ADDITIONAL INCENTIVES

Developer & Investor Center: National and international developers and investors are discovering Hawaii is the ideal laboratory for the development of clean energy technologies. With an eye toward economic growth and diversification, Hawaii has taken important steps to encourage high-impact, clean energy solutions that encourage innovative economic development. The Developer & Investor Center is designed to provide prospective developers and investors the resources for starting a clean energy venture in Hawaii, including the following areas: Project Permitting Assistance and Resources; Financing and Incentives for Renewable Energy Projects; Land Resources for Renewable Energy Projects; Utilities Resources; and, Business Registration Resources. The Center’s resources discuss and help users better understand Hawaii’s protected natural resources, environmental sensitivities, social values, and regulatory landscape, with the intent to facilitate more responsible project siting, development and outreach. The State Energy Office (SEO) makes efforts to maintain these resources as current as possible.

The Developer & Investor Center also hosts the Self-Help Energy Suite:

Self-Help Energy Suite: Provides developers and investors important technical assistance, permitting tools, and local insights to accelerate a project’s journey to the marketplace, where the rewards will be felt statewide. Available online, the Self-Help Energy Suite of tools can be used to help advance high impact, clean energy alternatives. These tools also serve to inform stakeholders of renewable energy projects in their area of interest, local regulatory processes and agencies, and project siting considerations. 

Hawaii Renewable Energy Projects Directory: An interactive directory to find and learn about operational and proposed renewable energy projects in Hawaii. The Directory lists projects statewide, showcasing the variety of renewable energy resources that are being harnessed to move us closer to reaching our overall clean energy goal. The Directory is also useful for those interested in learning more about one or more renewable energy projects in their area of interest.

Renewable EnerGIS Map: Provides renewable energy resource and site information for specific Hawaii locations. EnerGIS is intended to help landowners, developers, citizens, and decision-makers understand the renewable energy potential and development feasibility of sites statewide. EnerGIS also offers value by helping to identify sites less feasible or preferable for development due to the presence of natural and protected resources, sensitive environments, and/or unfavorable geophysical attributes. 

Renewable Energy Permitting Wizard: Developed to help those proposing new renewable energy projects understand the county, state, and federal permits that may be required for their individual project. Based on input provided by the user, the Wizard creates a permit plan or roadmap identifying the permits required for a given project, suggested sequencing and processing steps, and tips to support an overall smoother permitting process. The Wizard also provides links to information on many county, state and federal permits and approvals. “