Hawaii Solar Incentives

Hawaii Solar Incentives Save big Money on Solar Installation Costs

A question most people ask when looking at solar in HI is: how much does it cost, and are there any incentives that will pay for it?

The good news is that yes, Hawaii does have several solar incentives (see below) that make going solar in the state a bargain. But the better news is that solar has such a good return on investment (ROI, in other words, money you get back for every dollar you put in) that it’s almost a financial no-brainer.

The bottom-line is that even without incentives, you’ll save thousands of dollars a year by installing solar panels on your home in Hawaii!

Brief Background on Solar Initiatives and Mandates in Hawaii

Hawaii’s intention to become one of the most energy independent states in the US is well established. Since 2008, a partnership between the Hawaii Clean Energy Initiative (HCEI) and the US Department of Energy (DOE) has brought together businesses, policy-makers, and members of the public who have an interest in promoting renewable energy in the sate.

The goal? Simple: transition away from fossil-fuel dependent energy sources by increasing efficiency and producing more renewable energy. HCEI’s targets of 70% clean energy production exceed the Renewable Portfolio Standard’s mandated 40% clean energy target, but both are moving in the right direction.

Through these initiatives and other Hawaii solar incentives such as a feed-in tariff, tax credits, low interest loan programs and existing net-metering program, Hawaii is assisting property owners to make the transition to using solar energy. It also offers solar water heater system rebates.

Below we’ve listed summaries of the solar incentives available in the state. This information is up to date for 2013, but please note changes may occur. The two most reliable and detailed sources of information will be the DSIRE Solar incentives database for Hawaii and your local Hawaii solar installer (they should be able to answer questions and do this paperwork for you).

Details about Solar Incentives Available in Hawaii

1. Federal Solar Tax Credit

This incentive isn’t specific to Hawaii, but it’s available to everyone in the US. The incentive is a credit of 30% of the cost of your solar system. That’s correct, you can basically write off 30% of the cost of the system, right off the top.

However, be aware that like all tax-related credits you won’t see this money until you file your taxes in the following year.

More info: Federal Solar Tax Credit

2. Hawaii Feed-in Tariff (FIT, Performance-based incentive)

Both a Feed-in Tariff and Net-Metering program pay you for excess electricity you send back to the grid. The feed-in tariff that Hawaii offers is cash based. If you choose to get into this program, your utility company will pay you 22 cents on average for every surplus kilowatt hour that you feed back into the power grid.

Feed-in-tariff payments are sensible for those who are interested in generating huge amounts if solar energy (ie they make sense for solar farms, but not necessarily homeowners). If you’re installing a solar system for personal use, you can opt for the net metering program, which is another Hawaii solar incentive.

In-depth details: Hawaii solar feed-in-tariff (FIT)

3. Hawaii Net-Metering Program

The net metering program in Hawaii will not make you extra cash, but it will generate credit to pay future electricity bills with. The way it works is that for every extra kWh of electricity you produce you’ll get a credit for 1 kWh of electricity from your utility. Not bad, since 1kWh can cost as much as $0.36 in Hawaii, or nearly 3 times the national average.

Unfortunately, any credits you earn have a 12-month expiration on them, which means that if you don’t use them they go back to your utility company. In our opinion, this is extremely undesirable way to implement a net-metering program. In our opinion, if you generate excess solar energy, you should get paid for it.

More detail: Hawaii net-metering program

4. Hawaii Solar Power Tax Credits

These tax credits allow you to save on the costs of installing a solar system. You just have to wait for the end of the year when you file your taxes and get a credit of 35% of the total cost of installing a solar system, or $5000, depending on which amount is less.

That’s correct, you now have some large tax credits when taking into consideration the Federal tax credit and HI’s local tax credit here.

Update: The Hawaii solar tax credit has recently been affected be the apparently fraudulent claiming of this credit multiple times at the same location. The tax credit may have been cut in half depending on the new interpretation of who can qualify.

More: Hawaii Personal Solar Tax Credit

5. Hawaii Solar Hot Water / Solar Attic Fan Rebate

Hawaii has a few one-off solar rebates, including $1000 up-front on a solar hot water system installation and $50 for residential solar attic fans.

More: Solar hot water / solar attic fan rebate

6. Hawaii Property Tax Exemption for Solar

Another incentive offered is tax exemptions for installing solar power. After you install a solar system the value of your home increases and this means that property taxes will also increase.

However, if you live in Honolulu you do not have to pay increased property taxes for a period of twenty five years after installing a solar power system in your property. Unfortunately, if you live outside Honolulu this is something you’ll have to deal with, but it’s more than offset by the savings you’ll reap on a solar array in Hawaii.

More: Honolulu Solar Property Tax Exemption

Looking for more information on solar incentives??

Hawaii solar incentives are a great step towards helping you save on solar power system installation.

But in reality, solar in Hawaii is such a good deal that with or without incentives it’s worth taking a look at. For more information on the cost of going solar, fill out one of the signup widgets on the page to get a custom solar quote and take the first step to going solar in Hawaii!