If you live in Hawaii, switching to solar energy can make a huge difference for both your budget and the environment. With some of the highest electricity rates in the country due to reliance on imported fossil fuels, solar power offers a way to take charge of your energy costs.
The Hawaii Clean Energy Initiative reflects the state’s bold commitment to achieving 100 percent renewable energy by 2045, making it the first in the nation to set such ambitious standards. By installing solar panels, you’re not just cutting down on energy bills, you’re actively contributing to this groundbreaking effort and helping create a more sustainable future for the Aloha State.
Hawaii solar incentives make going solar more affordable than ever. From federal tax credits to state-level rebates, there are plenty of ways to reduce the initial costs of solar installation. With Hawaii solar capacity leading the nation in adoption, you’ll be part of a growing group of homeowners making a positive impact.
Key Takeaways
- Hawaii residents can significantly reduce solar installation costs through the Federal Solar Investment Tax Credit, which offers a 30% tax credit, and the state's Renewable Energy Technologies Income Tax Credit, providing a 35% credit up to $5,000.
- Honolulu homeowners benefit from a 25-year property tax exemption on the added value from solar installations, enhancing the financial appeal of adopting solar energy.
- Programs like the Green Energy Money Saver (GEM$) offer on-bill financing with a 5.5% APR over 20 years, making solar installations more accessible to eligible renters and homeowners without upfront costs.
Overview of Hawaii Solar Incentives, Tax Credits and Rebates
The Aloha State offers some incredible incentives to make solar power more affordable for your home or business. With both federal and state programs available, you can lower your installation costs and start saving on energy bills.
Here's a quick overview of key Hawaii solar incentives:
Incentive | Average Annual Savings | Eligibility | Description |
|---|---|---|---|
Federal Solar Investment Tax Credit (ITC) | $4,590 | All U.S. taxpayers | 30% tax credit on total solar costs |
Hawaii Renewable Energy Technologies Income Tax Credit (RETITC) | $5,000 | Hawaii residents | 35% state tax credit, capped at $5,000 |
Honolulu Solar Property Tax Exemption | Varies | Honolulu residents | 25-year exemption on added property value |
Green Energy Money Saver (GEM$) Program | Varies | Eligible renters and homeowners | On-bill financing at 5.5% APR for 20 years |
These programs make solar energy much more accessible. Not only can you reduce your upfront costs, but you’ll also enjoy long-term savings on your energy bills.
Remember to check with a local solar installer for the most up-to-date information. They can help you maximize your savings and navigate the incentive process.
Related: How Much Money Do Solar Panels Save? | Average Monthly Electric Bill with Solar Panels
Federal Solar Investment Tax Credit (ITC)
The Federal Solar Investment Tax Credit (ITC) lets you claim 30% of your solar installation costs on your federal taxes, making it an excellent way to save when going solar in Hawaii.
This credit applies to both residential and commercial systems and covers equipment, labor, and permitting fees. For example, a $15,000 solar setup could save you $4,500. To qualify, you must own your solar system and file IRS Form 5695 with your taxes.
The 30% rate is available until 2032, dropping to 26% in 2033 and 22% in 2034, so now is the best time to take advantage. You can also combine this with Hawaii solar incentives for even more savings.
Talk to local solar installers to see how much the ITC can reduce your costs.
Hawaii Renewable Energy Technologies Income Tax Credit (RETITC)
The Renewable Energy Technologies Income Tax Credit (RETITC) is a great way to save on solar in Hawaii. This state-level tax credit gives you 35% of your solar costs back, up to $5,000 for both residential and commercial systems.
For example, if your solar installation costs $15,000, you can claim the full $5,000 credit. If you cannot use the entire credit this year, you can roll over unused credits indefinitely.
Need quicker access to funds? You can opt for the refundable option and receive 30% of the credit as direct cash back.
Combined with federal incentives, the RETITC makes solar more affordable and an excellent choice for saving money in Hawaii.
Honolulu Solar Property Tax Exemption
If you live in Honolulu, installing solar panels comes with a big perk. You get a 100% property tax exemption on the added value from your solar system for 25 years.
This means your home’s value increases with solar panels, but your property taxes won’t. It’s a great way to save money while boosting your solar investment.
The exemption is available to residents of the City and County of Honolulu and starts the day your system is installed. You can combine it with other Hawaii solar incentives, like the state income tax credit, for even more savings.
With lower property taxes and reduced energy costs, going solar in Honolulu is a smart move.
Related: Do Solar Panels Increase Property Taxes?
Green Energy Money Saver (GEM$) Program
The Green Energy Money Saver (GEM$) program makes solar more accessible for low- and middle-income households and renters in Hawaii. With a 5.5% APR loan over 20 years, you can switch to clean energy without upfront costs.
No credit checks are required, and you’ll repay the loan through your utility bill, keeping payments simple. To qualify, your income must be below 140% of the area median, and you need an active Hawaiian Electric account in good standing.
GEM$ helps lower your energy bills and makes solar affordable for more residents. Renters can also benefit, making it a smart choice for anyone looking to save on energy.
Hawaii Net Metering and Solar Buyback Programs
Hawaii’s solar options have changed. While net metering is no longer available, you can choose between Grid-Supply and Self-Supply programs.
With Grid-Supply, you can sell excess energy back to the power company and earn credits ranging from $0.15 to $0.28 per kWh. Self-Supply focuses on using solar power for your home without sending energy to the grid.
Adding a solar battery can help you store extra energy for later use, increasing your savings.
Hawaiian Electric offers these programs on all islands, but rates and rules may vary. Speak with your solar installer to choose the best option for your needs, and always check current rates to stay informed.
Solar Battery Incentives in Hawaii
Adding a solar battery to your system is a smart move. Batteries provide backup power during outages, keeping your home running even when the grid goes down.
They work well with self-supply programs, letting you store extra energy for later use and reducing your reliance on the grid, which helps you maximize your solar investment.
The federal tax credit covers 30% of the cost for battery systems over 3 kWh, making it easier to afford a battery. Hawaii also offers the Bring Your Own Device (BYOD) Program, which rewards you for using your battery to help stabilize the grid during peak times.
While Hawaii’s Battery Bonus Program has ended, it highlights the state’s dedication to expanding energy storage and making solar accessible.
Remember, incentives can change, so connect with a local solar provider to stay updated on the latest programs and see how you can take advantage of them.
Related: How Long Can a Solar Battery Power a House? | How Many Solar Batteries You Need For Solar?
Are Solar Panels Worth It in Hawaii?
Solar panels are a smart choice in Hawaii, where electricity costs are around $0.42 per kWh. With typical lifetime savings of $131,371 over 25 years, your solar system could pay for itself in just 4.5 to 6 years, depending on the size and financing.
Hawaii offers solar incentives to help lower upfront costs, making the switch more affordable. Solar also increases your home’s value and protects you from rising electricity rates, with savings growing as energy costs climb.
With year-round sunshine, your panels will produce energy consistently, maximizing savings and efficiency.
Ready to start saving? Contact Sunsoaked Solar today for a custom quote. Our experts will help you design the perfect system for your home.
FAQs About Hawaii Solar Incentives
Is there a solar rebate in Hawaii?
Hawaii doesn't offer a statewide solar rebate for PV systems. Instead, you can take advantage of strong tax incentives. The Hawaii Renewable Energy Technologies Income Tax Credit (RETITC) and federal Investment Tax Credit (ITC) can significantly reduce your costs.
Check with your local utility for possible rebates on solar water heaters or energy upgrades.
Are there any incentives specific to low-income households for solar installations in Hawaii?
The Green Energy Money Saver (GEM$) Program helps low and moderate-income households go solar. You can get a 20-year loan with a 5.5% interest rate and no credit check.
To qualify, your income must be below 140% of your area's median income. You need to be a Hawaiian Electric customer with an account in good standing.
Are there any incentives for installing solar water heaters in Hawaii?
You can get up to $750 through the Hawaii Energy Solar Water Heating Rebate. This statewide rebate works well with federal tax incentives to lower your costs.
Your system must meet specific performance criteria. Make sure to use an approved contractor for installation to qualify.
How much does it cost to install solar panels in Hawaii?
A 5kW solar system in Hawaii typically costs between $15,000 and $20,000 before incentives. Your final price depends on system size, installer, and whether you include a battery.
Incentives can greatly reduce your costs. The federal ITC offers a 30% credit, while the RETITC gives a 35% credit (up to $5,000).
Related: How Much Do Solar Panels Cost in Hawaii?
What financing options are available for solar installations in Hawaii?
You have several choices to finance your solar project. The GEM$ Program offers low-interest loans without a credit check. Traditional solar loans from private lenders are also available.
Leases and Power Purchase Agreements (PPAs) let you go solar with no upfront cost. You'll pay for the energy generated instead of owning the system.
How does Hawaii's net metering policy affect my utility bills?
Hawaii no longer offers traditional net metering. Instead, you can use solar buyback programs. The Grid-Supply Plan gives you partial credits for excess energy sent to the grid.
The Self-Supply Plan works best if you use most of your energy on-site. To maximize savings, try using energy during peak solar hours or install a battery.