Hawaii relies on imported electricity due to its island location, resulting in the highest electricity costs in the country. The Hawaii Clean Energy Initiative, a group formed through the US Department of Energy, set the ambitious goal to transition to 100% renewable energy by 2045. Investing in solar energy is an excellent way for you to reduce the financial impact of rising electricity rates if you live in Hawaii.
Hawaii doesn’t have much of its own oil and coal, so the resources must be imported, which results in high electricity costs. Data from the Energy Information Administration shows electricity rates in Hawaii (44.85 cents per kilowatt hour) have increased by 30% since October 2021 and are more than double the average rate in the US (16.09 cents per kilowatt hour). October 2022 data shows Hawaiians spend an average of $238.15 monthly on electricity bills.
The total cost of installing a solar panel system depends on several factors, including roof maintenance, installation costs, the number of panels you need and other components like solar batteries. You may be able to offset the cost with solar incentives and rebates. According to data from the Lawrence Berkeley National Lab, the average solar panel system has a capacity of 8.6 kilowatts and costs $31,558, or $3.67 per watt.
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Hawaii solar panel incentives or rebates
You can buy solar panels in cash or finance them through a loan or other means. You can also enter a solar lease or power purchase agreement, which costs less up front but typically results in lower savings over time.
Federal and local incentives and rebates offset the cost of solar systems to help Hawaii residents choose renewable energy. The residential clean energy credit is a federal solar incentive crediting 30% of the total price of a solar panel system to you when you file your federal tax return. The credit was increased and extended in the Inflation Reduction Act of 2022.
In addition, Hawaii offers a residential tax credit and other incentives. The following are solar incentive programs available in Hawaii.
Hawaii solar incentives
|Hawaiian Electric Smart Export||Similar to net metering, customers receive credits for exporting excess energy generated by their solar panel system back to the energy grid from 4 p.m. to 9 a.m.|
|Honolulu Solar Loan Program||Zero-interest loan programs are offered by the city and county of Honolulu to homeowners for the installation of a solar system. The program aims to assist those of low to moderate income status.|
|Renewable Energy Technologies Income Tax Credit||Eligible homeowners may receive up to a 35% credit or $5,000, whichever is less, toward the total cost of a residential photovoltaic solar system.|
|Residential Clean Energy Credit||Apply through the IRS for a 30% federal tax credit for solar systems installed from the beginning of 2022 through 2032. The credit will decrease to 26% in 2033, 22% in 2034 and expire in 2035.|
Hawaii solar panel companies
There are dozens of solar installers in Hawaii to choose from. Whether you’re interested in a nationwide or local company, I researched the following five companies to help you choose a solar installer. I recommend comparing quotes from multiple companies to help you find the right fit for your budget.
Local installer Independent Energy handles the entire solar process, from consultation to powering on your system. The company installs a variety of solar panel brands, including Panasonic, REC, Qcells and Hyundai. Solar battery options include Generac, Enphase and Fortress. All products come with a 10- to 25-year manufacturer warranty.
Pacific Energy is a solar consulting and installation company in Maui. As a local company, Pacific Energy has experience with the solar policies and regulations on the island. Pacific Energy installs quality solar panels, including SunPower’s Maxeon solar panels, which have an industry-leading efficiency rating (22.8%). The panels include a 25-year warranty for service and quality of work. The company also installs the Tesla Powerwall solar battery for solar energy storage.
Since 1988, Provision Solar has served Oahu with solar products and services. Provision Solar is an authorized dealer for SunPower and installs highly efficient Maxeon solar panels, SolarEdge inverters and the Tesla Powerwall solar battery.
As a national residential solar company, Sunnova has provided solar panel systems to over 245,000 homes and operates in 40 US states. Its solar systems are warranted through Sunnova Protect, a full coverage warranty for repairs, replacements, roof penetration and energy guarantee. Sunnova installs Generac, Enphase and Tesla products, including coverage by Sunnova Protect and the manufacturer warranty.
Sunrun is a nationwide solar company with services in 21 states, including Hawaii. The company is known for its solar lease financing options, which can lead to lower lifetime savings but make panels accessible for those who don’t want large upfront solar costs. If you lease your equipment you’ll receive “bumper-to-bumper” coverage for maintenance and monitoring services. If you purchase with cash or loans, you’ll have to rely on the manufacturer’s warranty and Sunrun’s 10-year warranty covering installation issues and roof damage.
Installation factors to consider
Before installing solar panels, consider the following five factors to avoid any potential surprises throughout the process and to determine if solar is right for you.
Are you a renter? Renters have less decision-making ability when it comes to changing the property. Community solar programs allow renters to subscribe and power their homes with solar from nearby panels. Check with your landlord to explore available options.
Do you have an HOA? Neighborhood and home owners associations in Hawaii can’t prohibit solar panels but may have guidelines for solar placement. Check with your association for details.
Does your insurance cover solar panels? Confirm with your homeowner’s insurance agency to ensure your policy has solar panel coverage.
What is your roof’s condition? Solar installers may require roof maintenance after completing an inspection. According to the Department of Energy, solar panels perform best on roofs with a 15- to 40-degree slope that faces south.
Is your home shaded? Solar panels still work when shaded by trees and buildings but perform best in direct sunlight for at least four hours per day. Consider the location of your home and how much direct sunlight your roof receives.
Hawaii solar power FAQs
Are solar panels worth it in Hawaii?
Yes. Solar panels are a worthwhile investment due to the high electricity rates in Hawaii. Investing in a solar panel system that covers your home’s energy needs can significantly reduce energy costs, especially once the system is paid off.
Why is electricity in Hawaii expensive?
Electricity in Hawaii is expensive because the state has few coal and oil resources, which are often used to generate electricity. Therefore, Hawaii must import resources which adds to the total cost. Powering your home with solar energy could save you money over time.
Are solar panels good for the environment?
Yes. Renewable energy sources, like solar power, are more sustainable and emit fewer carbon emissions than fossil fuels like coal or gas. While the manufacturing process of solar panels has an impact on the environment, the process of converting solar energy into electricity doesn’t produce greenhouse gases.