Hawaii is a beautiful state. With sandy beaches, blue water, and lots of sunshine, Hawaii is naturally suited to adopting solar power as a renewable energy source.
But importing energy to Hawaii is a costly measure. It costs Hawaiian homeowners approximately four times more for energy than what many mainlanders pay per month.
And so with great solar incentives from both the local and federal government, solar panel systems are now more affordable than ever, creating massive electricity savings unlike any other state in the United States.
Solar Power in Hawaii Simply Makes Sense
Hawaii’s RPS and the Future
Hawaii’s RPS (Renewable Portfolio Standard) calls for 40% of their energy to be produced by renewable sources by 2030.
Hawaii is meeting this aggressive goal through residential energy production and wide-scale production plants. Hawaii is in the forefront of 'Green States', understanding fully well the benefits and savings of clean energy usage and how this is critical for current and future living.
Hawaii RPS Carve Outs
According to Hawaii’s RPS, there is no specific solar carve out when it comes to producing renewable energy. Still, there’s a lot of room for improvement.
In fact, Kauai is calling for 50% of their energy to be produced by renewable means by 2023, a goal they’re hoping to meet through large scale solar farms and residential production.
You Can Save Money by Going Solar in Hawaii
The average Hawaiian can spend an astronomical amount of money on their monthly utility bill. Many Hawaiians report spending anywhere from $300 to $400 a month on their electricity bill, mainly due to the cost of importing energy from the mainland. So finding ways to save money on the electric bill is key.
By installing solar panels, you can save money on your electric bill and help reduce your reliance on the public energy grid. Hawaii experiences plenty of sunlight, making solar energy a reliable way of producing renewable energy in Hawaii.
Energy rates are so high in Hawaii; it simply makes sense to at least talk to a trusted local installer in your area. They can break down costs and savings in a nice, simple and informative way.
How much would a 5KW system will cost you in Hawaii ?
Investing in Solar Power in Hawaii will pay for itself in about 4 years
So what is the cost here? Let's take a 5KW PV system, which is the average residential system installation.
A total price for an average system in Hawaii will cost you about $10,500 dollars. But how exactly you get to that figure?
We take an average cost of a system and apply all the state tax breaks and rebates, the federal tax credit, and year one savings. The aggressive tax incentives are designed to make solar installation affordable and no case is more evident with solar in Hawaii where you can see the return on your investment in just 4 years (see more info about tax breaks and incentives below).
The figures above are general estimates. The figures may vary, and depends on several factors like the size of your home, shading, utility company and more.
Other case studies:
In August, 2014, the Kauai Island Utility Cooperative’s 70-acre, 12-megawatt solar farm was able to produce over 57% of the island’s daytime energy needs in one day.
Mauna Lani resort found that they were able to draw 30% of their energy needs through solar panels. By adopting roof-top solar panels, solar powered golf carts, solar powered spa systems and more, they were able to significantly reduce their reliance on burning diesel, which is Kohala’s main source of energy as of this time./p>
Don’t Wait to Purchase Your Solar System
Residents of Hawaii can expect to save big on their utility bills considering how expensive energy bills can be.
After all, Hawaiians spend well more than the national average on energy. The average Hawaiian spends about $.39/kwh. Considering the average is typically $.13/kwh, that means there’s a lot of incentive to reduce one’s dependence on the grid.
Hawaiian homeowners can also install a solar panel today for zero money down through a lease.
Hawaii Homeowner Solar Incentives, Rebates, and Tax Breaks
Lower Your Utility Costs
Utility costs in Hawaii are some of the highest in the nation. With homeowners paying up to $400 a month on electricity alone, there’s a lot of incentive to reduce your dependence on the grid.
Relying on solar power can help you reduce your dependence on imported diesel fuel and help save you significant amounts of cash on your energy bill each month. Hawaii regularly receives constant sunshine throughout the year and so solar energy is a natural choice when it comes to producing solar electricity through renewable means.
On average, people who install a solar system in Hawaii can expect their solar power systems to pay for themselves within about four years.
Solar Rebates in Hawaii
While Hawaii does not offer solar rebates at this time, homeowners can help offset the cost of paying for a solar panel system with tax credits.
Hawaii Solar Tax Credits
Hawaiian homeowners can benefit from both Hawaii’s state tax and federal tax credits. Both the state tax credit and federal tax credit can be redeemed at once. Hawaii’s state tax credit is valued at 35% the cost of the solar panel system or $5,000, whichever is less.
In fact, Hawaii’s state tax credit is the second highest in the nation, second to only Louisiana.
You can also enjoy the 30% Federal Solar Tax Credit, which is set to run out in 2022. You’ll be able to claim 30% of the cost of the solar energy system as a tax credit. Any system installed before the end of 2016 is eligible under the Federal Solar Tax Credit.
Hawaii Property Tax Exemptions
Residents in Honolulu will be able to benefit from property tax exemptions, allowing for residents to be able to benefit from both the higher property value that solar panel systems provide and being exempt from this higher property value. This property tax exemption is available to be redeemed for 25 years.
Hawaii Sales Tax Exemptions
Hawaii doesn’t offer a sales tax exemption at this time but users can still enjoy property tax exemptions and tax credits to help them save money on buying their solar system.
Hawaii Financing Options and Getting Solar for Zero Down
Is It Worth Investing in Residential Solar Energy in Hawaii?
Homeowners have the option of leasing or buying a solar system. Since buying a solar system can often involve a lot of cash upfront, even when factoring in tax credits and property tax exemptions, leasing a system allows you to enjoy the benefits of a solar power system immediately.
Either way, a solar system can enable you to reduce your independence on the power grid and save big on your utility bills. In Hawaii, you already know that utility bills can be ridiculous.
Depending on your solar PV system quotes, you may even begin to see returns immediately.
How it Works
Leasing a system allows you to obtain a solar system for zero money down. Most solar system leases last for about twenty years or so and you’ll have the option of purchasing the system later once your term expires.
Leasing a system allows you to immediately benefit from using solar energy. You may expect to see returns almost immediately depending on your solar PV system quotes.
When you lease a system, you’ll only need to make lease payments and additional payments on whatever electricity you’re drawing off the grid. However, leasing a system means that you won’t be able to benefit from tax credits, property tax exemptions, net metering, and so on.
Still, it’s a great way to enjoy solar energy without having to put thousands of dollars down on the device.
Owning the system over the long run will allow you to experience many of the panel’s long term financial benefits.
Many people can expect the system to pay for itself in four years, providing a huge incentive for purchasing the device.
Solar Incentives in Hawaii
Along with the many tax benefits of owning a solar system, including property tax exemptions, the Federal Tax Credit, and Hawaii’s own Tax Credit, you’ll be able to enjoy the benefits of net metering and the amount of energy you’re producing can help you shave down your electric bills.
Hawaii provides some of the biggest benefits around when it comes to tax benefits, making it easier and more affordable to purchase a solar panel system.
Can I Lease the System in Hawaii? Or Should I Buy it Instead?
Whether you lease or buy a solar system depends on your financial situation and your personal needs. Get in touch with a solar installer today to see what works for you.
Buying a system will allow you to benefit from the long term financial gains of owning one. And unlike many states, solar panels for homes in Hawaii can often pay for themselves within four years.
However, leasing a solar system is still a valid option, allowing you to obtain a solar system with zero money down. It’s an easy way to enjoy the benefits of renewable energy almost immediately without having to pony up upfront fees.
What About Net Metering in Hawaii?
Homeowners in Hawaii have two main options when it comes to benefiting from their solar energy production.
The first is the Feed-in-Tariff program, or the FIT. By opting into FIT, you’ll be able to earn 22 cents for every surplus kilowatt-hour you produce.
Net metering is the most popular option. Net metering requires that you tie your solar system to the grid, measuring the amount of energy your unit produces.
Every surplus kilo-watt hour you produce can be redeemed for credits on your utility bill. Unfortunately, energy credits are only able to be redeemed within twelve months of earning them.
Which option is the most economical? FIT is often more economical when you produce solar energy on a large scale.
Commercial applications, for example, benefit extensively from the FIT program. However, you may not see many returns if you’re an average homeowner.
If your solar system is greater than 20kW, the FIT program is worth considering. Otherwise, you’ll probably see more returns with net metering.
Net metering can help you cut back on your utility bills, allowing you to redeem credits during high volume months. And considering how high the average utility bill can be in Hawaii, saving money on your utility bills is key.
Eliminating Your Electric Bill in Hawaii
In many cases, you can significantly reduce your reliance on the energy grid. Some homeowners have been able to experience significant savings over the lifetime of the unit.
Some solar systems, depending on energy output, can pay for themselves in about four years.
Whether you lease or buy the system, you’ll be able to benefit almost immediately from renewable energy.
Hawaii features sandy beaches, clear waters, and plenty of sun, making it an ideal candidate for adopting solar power.
Between residential solar production and commercial solar farms, Hawaii is well on its way to meeting its RPS goal of 40% by 2030. And with over 12% of homeowners adopting solar panels, Hawaii is a leader in encouraging residents to consider solar panel systems.
Hawaii offers a number of tax incentives to help residents save on the cost of a solar panel system. Residents can redeem both the Federal Tax Credit and the state’s Tax Credit, the former of which can be redeemed into 2022 and the latter available at all times.
Renewable energy can help diminish your dependence on pricey, imported electricity. It’s also a key factor in keeping Hawaii beautiful.
Using a solar panel can help you save money and help cut back on carbon emissions. A solar panel system may even pay for itself in a relatively short time frame.