Tax credits, lower charging rates among perks for EV owners
by Alan Yonan Jr. | Dec. 20, 2021
If you’re thinking of purchasing an electric vehicle there are a host of federal and state incentives available to Hawaii residents, but the clock is ticking on some of the perks.
Among the inducements for Hawaii EV buyers are a federal tax credit up to $7,500 for purchasing an EV, a federal tax credit up to $1,000 for the installation of a home charging station, the ability to drive in HOV lanes regardless of the number of people in the car, and lower electric rates offered by Hawaiian Electric for EV charging during midday hours.
If you’ve been considering installing a Level 2 charging station at home and want to claim the federal tax credit you need to act fast because it’s set to expire at the end of 2021. The tax credit is good for 30% of the cost of the charging station with a maximum credit of $1,000. The 30% federal tax credit also is available for the installation of commercial charging stations with a maximum credit of $30,000.
In addition, Hawaii Energy offers rebates for the installation of commercial EV charging stations. A new Level 2 charging station with at least two ports qualifies for a $4,500 rebate per networked station, while a retrofit qualifies for a $3,000 rebate per networked station. DC fast chargers qualify for a $35,000 rebate per networked station, while retrofits qualify for a $28,000 rebate per networked station.
You can knock down the cost of the electric vehicle itself with a federal tax credit that tops out at $7,500 per vehicle. The exact amount of the tax credit depends on the size of the battery in the EV or plug-in hybrid you purchase. The IRS has conveniently published a list of EVs and the amount of the qualifying credit for each.
One caveat is that the tax credit begins to phase out for automakers after they sell 200,000 eligible vehicles. The only two carmakers that have reached the 200,000-vehilcle threshold are Tesla and General Motors so their EVs no longer qualify under the program. Auto industry analysts are predicting Toyota will be the next automaker to reach the 200,000-vehicle milestone sometime in late 2022, followed by Nissan in mid- to late 2023.
There’s a chance Congress could expand the EV tax credit program as part of President Biden’s Build Back Better bill, but there’s no guarantee the legislation will pass.
There’s also good news for solo EV drivers who want to speed up their morning commute using a high occupancy vehicle lane. The Hawaii Department of Transportation in November reinstituted a rule that allows EVs to be driven in an HOV lanes regardless of the number of people in the vehicle. HOV lane restrictions require two or more passengers for all other vehicles except motorcycles. The HOV lane perk for EVs had lapsed in June of 2020, but the DOT updated its administrative rules to bring it back.
High gasoline prices got you down? Folks who drive gas-powered cars can only dream about cutting their fuel bill by 50% or more by filing up their tank between 9 a.m. and 5 p.m. However, that’s a reality for EV drivers who can save significantly by taking advantage midday electric rates to charge their vehicles under Hawaiian Electric’s residential time-of-use program. For December, the midday TOU rate was anywhere from 52% to 75% lower than the on-peak (5 p.m. to 10 p.m.) rate, depending on the island where you live.
While the list of perks for EV drivers is still lengthy, you’ll need to act fast — some of them will disappear when we ring in the new year.
Alan Yonan Jr. is a senior communications specialist at Hawaiian Electric.