The state has updated tax guidance that some solar installation companies believed might cause confusion and crimp their businesses.

A new tax information release published by the state last Friday seeks to clarify how state tax credits of up to $5,000 per system may be used.

"This gives us the clarity we need," said Mark Duda, president of the Hawai'i Solar Energy Association.

"It will allow continued growth."

Local companies that install solar photovoltaic systems had been worried about the impact of tax credit guidance published by the state Tax Department earlier this month. The department issued the ruling after detecting some confusion and perhaps abuse on how tax credits were being filed.