Solar panel tax breaks in Hawaii
The federal solar tax credit is gone, but a few standing programs can still help Hawaii homeowners offset the cost of going solar:
- Personal tax credit: Hawaii’s Renewable Energy Technologies Income Tax Credit (RETITC) covers 35% of eligible solar costs, generally capped at $5,000 per system for a single-family home. However, a 2026 law, Act 24, imposed a $40 million annual statewide cap on the credit. Systems placed in service in 2026 may be exempt from that cap if they were completed before May 21, 2026, or if the taxpayer made qualifying investments in the project before that date. Starting in tax year 2027, new income limits and other restrictions also apply.
- Property tax treatment: In Honolulu, devices that convert solar energy into electricity or heat generally aren’t included in a home’s taxable assessed value. That means the value of rooftop solar equipment generally shouldn’t increase the homeowner’s Honolulu property tax assessment.
Solar panel loan programs in Hawaii
Additionally, some Hawaii credit unions and local lenders offer financing for solar water heaters, heat pumps and solar photovoltaic systems. Loan terms vary by lender.
- Honolulu’s Rehabilitation Loan Program lets eligible, income-qualified Oahu homeowners finance solar panels with a 0% interest loan. The program can also cover repairs such as roofing, electrical work and plumbing, which could help homeowners prepare an older property for a solar installation.
- Hawaii’s Green Energy Money $aver (GEM$) On-Bill Program provides financing for qualifying low- to moderate-income homeowners and renters served by Hawaiian Electric to install solar and other eligible energy improvements. Payments are made through the customer’s monthly electric bill, and financing can extend up to 25 years at a fixed 5.5% rate. Separate commercial GEM$ financing is available to eligible nonprofits, small businesses, multifamily rental projects and commercial tenants.
Did you know?
On average, Hawaii homeowners with solar panels can save $43,740 in total avoided utility costs over 25 years.
Solar export programs in Hawaii
Solar export rules in Hawaii depend on where you live and which utility serves your home. Hawaiian Electric serves Oahu, Maui, Hawaii Island, Molokai and Lanai, while Kauai Island Utility Cooperative (KIUC) has its own solar rates and interconnection policies.
Check with Hawaiian Electric or KIUC for the latest solar export rates, program rules and availability before installing a system.
For new rooftop solar customers served by Hawaiian Electric, the main options are:
- Smart Renewable Energy Export: Lets you send excess solar electricity to the grid in exchange for bill credits. The value of those credits depends on what time of day the electricity is exported.
- Smart Renewable Energy Non-Export: Lets you install solar without sending excess electricity to the grid. Any extra production must be used at your home, curtailed or stored in a battery for later use.
Some homeowners with older solar systems may remain enrolled in legacy programs, including net metering.
What to know about solar export rates in Hawaii
Under Hawaiian Electric’s Smart Renewable Energy Export program, compensation varies by time of day. Export rates are generally highest during the evening peak period from 5 p.m. to 9 p.m., when electricity demand is higher, and lower during daytime hours when solar generation is more plentiful.
Rates also vary by island, so the value of exported solar power can differ depending on where you live.
An advanced meter is required for Hawaiian Electric’s Smart Renewable Energy Export and Non-Export programs. Even if your solar system produces enough electricity to offset most or all of your usage, you will still be responsible for minimum charges and other applicable fees under your utility rate plan.
Battery storage incentives
If you install a new battery, you may qualify for Hawaiian Electric’s Bring Your Own Device Plus (BYOD Plus) program. The program offers an upfront incentive based on the amount of battery capacity you commit, along with credits for electricity exported to the grid.
Participating batteries discharge during a customer-selected two-hour period each day. Your home’s electricity needs are served first, and any remaining available energy can be sent to the grid. Participants generally agree to remain in the program for multiple years.
» RELATED: How much do solar batteries cost?
Shared solar options
If rooftop solar isn’t practical because you rent, have too much shade or your home’s structure isn't suitable for panels, Hawaiian Electric’s Community-Based Renewable Energy program — also known as shared solar — may be another option.
Shared solar lets eligible customers subscribe to an off-site renewable energy project and receive monthly bill credits based on their participation. Availability depends on whether participating projects on your island are accepting subscribers.
Solar panel costs in Hawaii
Before any incentives, solar panel costs in Hawaii typically range from $16,350 to $32,701. On the high end, one solar customer in Hanalei told us they spent $100,000 on a system.
The table below shows average solar panel costs by system size in Hawaii. It does not include the cost of a solar storage battery, which can add $7,000 to $18,000 to your total system costs.
| 5 kW | 6 kW | 7 kW | 8 kW | 9 kW | 10 kW | |
|---|---|---|---|---|---|---|
| Statewide average | $16,350 | $19,621 | $22,891 | $26,161 | $29,431 | $32,701 |
| Honolulu | $15,964 | $19,157 | $22,349 | $25,542 | $28,735 | $31,928 |
How can I pay for solar panels?
Many homeowners don’t have enough money saved to pay upfront. That’s where solar loans come in. You could also go with a lease or power purchase agreement (PPA). These options generally require little or no upfront payment, but the solar company owns the system.
Federal mortgage options for solar panels
Some federal mortgage programs let eligible borrowers include solar panels or other energy upgrades in a home purchase or refinance loan. Rules vary by lender.
- FHA Energy Efficient Mortgage: Finance cost-effective energy upgrades through an FHA-insured mortgage. A home energy assessment is required, and expected savings must cover the upgrade cost. Separate FHA rules apply to solar and wind systems.
- VA Energy Efficient Mortgage: Eligible VA borrowers can add up to $6,000 for approved energy upgrades. For costs over $3,000, projected monthly savings must exceed the added mortgage payment.
» SOLAR PANELS: Lease vs. buy
FAQ
How much does a 6-kW solar panel system cost in Hawaii?
A typical 6-kW system costs $19,621 in Hawaii.
What are the best solar companies in Hawaii?
It depends on what you’re looking for. A good solar company helps you navigate local incentives, permitting and net metering policies. Compare our picks for Hawaii's top solar companies to learn more.
How much can I save with solar panels in Hawaii?
In Hawaii, the average savings is $43,740 over 25 years. Even if your solar doesn’t cover all of your energy needs, you still stand to save a lot by adding a system to your home.
Are there any disadvantages to going solar in Hawaii?
There are several solar energy pros and cons. Some residents who switch to solar have a few complaints, mostly related to customer service and issues with ongoing monitoring. It can also take a long time, according to Richard in Captain Cook: “Setting up my solar took too long. From start to finish, it was about a year. I think getting permits and moving through the government procedure could’ve been a lot faster.”
» MORE: Is solar worth it in Hawaii?
Is my HOA allowed to restrict solar panels?
Hawaii law generally prevents homeowners associations and other private entities from prohibiting solar energy devices on single-family homes and townhouses. Associations can set reasonable placement and installation rules, but those rules can’t make the system more than 25% less efficient or increase installation, maintenance and removal costs by more than 15%. Additional requirements can apply if panels are installed on common or limited common property.
What has Hawaii’s investment in solar been so far?
Total solar investments in the state amount to $5.5 billion, according to the Solar Energy Industries Association.
Article sources
ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
- DSIRE, “Programs.” Accessed July 28, 2026.
- Hawaiian Electric, “Bring Your Own Device Plus.” Accessed July 28, 2026.
- State of Hawaii Department of Taxation, “Renewable Energy Technologies Income Tax Credit (RETITC) – HRS §235-12.5.” Accessed July 28, 2026.
- Hawaii Energy, “Water Heating Rebates.” Accessed July 28, 2026.
- Kauai Island Utility Cooperative, “Solar Water Heating Programs.” Accessed July 28, 2026.
- State of Hawaii Agricultural Division, “Alternative Energy Loan Program.” Accessed July 28, 2026.
- Hawaii State Legislature, “§196-7 Placement of Solar Energy Devices.” Accessed July 28, 2026.
- Solar Energy Industries Association, “Hawai'i.” Accessed July 28, 2026.
