Free tools are a clear advantage for any processor projects for hobbyists. The renesas H8 (and other) processors are rather well blessed.
Renesas provide a free version of their comprehensove High-performance Embedded Workshop. This IDE can be integrated with a number of languagage toolchains providing a single environment for editing, compiling and debugging programs.
The Renesas Flash Development Toolkit (FDT) is also free and will allow you to read and write any of the flash memory processors.
The compiler of choice for this site is the GNU/H8 toolchain. This provides compiler, assembler, linker and debugger.
These represent largish downloads but are relatively easy to obtain, configure and use. Start by visiting the excellent KPIT GNU tools site. You will need to register with them to download the tools but they offer plenty of documentation and a very good web-based technical support forum. Explore their site. You can probably get everything set up without returning here. The other pages in this section highlight some of the steps in getting the tools ready to use on your system.
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