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However, the offer does not apply to commercial systems. Chong estimated that the tax ruling resulted in the cancellation of projects totaling 500 kilowatts, which translates into "a couple of million" dollars in lost revenue to the company.

One of the unintended consequences of the tax ruling is that many PV installers are switching to low-cost PV panels and other equipment from Asia to keep projects affordable for customers, Chong said.

"The Tax Department and the governor basically made a decision that is wasting everyone's money. The new rules promote lower-quality Chinese equipment rather than high-quality American-made equipment. The governor has actually done the opposite of what he intended in trying to save the state money," he said.

Veterans of the local PV industry also have concerns that some customers who rushed to get systems installed after the Nov. 9 announcement will end up with work of questionable workmanship.

"Because a lot of the reputable installers are booked right now, there is probably a lot more work being driven by guys who don't typically do these kind of jobs. It's kind of in a frenzy mode," said Mark Duda, a principal at RevoluSun.

He said the one impact of the tax ruling might not be seen until next year when the Honolulu Department of Planning and Permitting works through its backlog of PV system inspections and begins looking at systems completed hastily in November and December.

"This whole issue should have been handled in a more orderly manner. It's just going to be messy," Duda said.

The city announced last week that residents who have a PV system installed by year's end can have their request for an electrical inspection time-stamped "2012" so they will be eligible for a 2012 tax credit.

Their contractor should bring two copies of the inspection request to the building permit office in the Fasi Municipal Building by the close of business Monday.

One point that has been discussed but not resolved in the latest public debate over renewable energy tax credits is what the legislators intended when they drafted the legislative language in 2003.

The Hawaii Solar Energy Association maintains that if lawmakers had intended to limit the credit to one per household, then they would have written the law to reflect that.

However, Lowell Kalapa, head of the Tax Foundation of Hawaii, said the Legislature left that up to the Department of Taxation to clarify through rulemaking.

"Now, the department has come forward with revised rules that define a system based on the amount of power that can be produced," Kalapa wrote in a recent commentary on the organization's website. "Given that 'system' was never defined in the state law and that the interpretation of the term 'system' was guidance given by the department in its original analysis of the term, rewriting the interpretation seems entirely within the department's jurisdiction.

"While advocates of the credit wish to remain at the status quo arguing that it is up to the Legislature to change the definition of the system, they must remember that it was the Legislature that left vague the term of 'system' as part of the law and provided no further guidance. Thus, while advocates may believe that it is up to the Legislature to make a change, until that time it is in the department's hands to determine what a 'system' is."

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