Law Aims to Help Landlords While Lowering Renters’ Utility Bills

A bill signed into law today allows landlords to essentially serve as independent power companies while expanding the use of renewable energy.

Senate Bill 19, enacted by Gov. Neil Abercrombie as Act 261, removes landlords from state law’s definition of what constitutes a public utility.

The act allows them to install renewable energy systems on their property and then sell that electricity to their tenants or lessees.

It requires that the rate charged for the electricity must be lower than that charged by the utility, and must also be included as part of the lease.

Puna Sen. Russell Ruderman, one of three sponsors of the bill, said the process will provide benefits for both landlords and tenants.

While the most obvious is tenants’ access to lower-cost electricity, he said the landlord will be able to take advantage of tax credits as well as receive revenue from the sales.

It’s essentially the same incentives that homeowners have to install photovoltaic solar systems, Ruderman said.

“I think they will be able to make money off the system and eventually own it,” he said.

Ruderman noted that the process will also make rentals more attractive to tenants.

Sen. Mike Gabbard, another of the bill’s sponsors, said since renters make up 40% of the state’s population, the new law has the potential to lower utility bills for many Hawaii residents.

Gabbard, who represents parts of central and leeward Oahu, also sees opportunities for large-scale commercial ventures.

“It will also open up a great investment opportunity for places like Ala Moana Center that could put up a big PV system and then sell the electricity to the different stores in the mall,” he said.

The bill had the support of renewable energy advocates and several state agencies, including the Department of Business, Economic Development and Tourism.

“We believe this bill will allow renters and lessees the ability to take advantage of lower-priced fixed-rate renewable energy, accelerating the adoption of renewable energy in Hawaii and helping the State meet its clean energy objectives,” DBEDT Director Richard C. Lim said in written testimony submitted to the Legislature.

However, the state’s consumer advocate, Jeffrey Ono, and Hermina Morita, head of the Public Utilities Commission, both testified that they believe the part of the bill exempting landlords from the definition of public utilities was unnecessary because state law already provides an exemption for such projects.