Solar tax breaks in Hawaii
The federal solar investment tax credit (ITC) expired in 2025, but residents can also take advantage of the following solar tax incentives.
- Personal tax credit: Hawaii offers an income tax credit worth up to 35% of eligible solar system costs, subject to cap amounts. This incentive also applies to commercial properties.
- Property tax exemption: In Honolulu, clean energy improvements like solar panels are exempt from property taxes for 25 years. This means that the value solar panels add to your home is excluded from tax calculations.
Solar 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 could help eligible homeowners finance solar panels with a 0% interest loan instead of a traditional solar loan. Because the program also covers home repairs like roofing and electrical work, it may make it easier and more affordable for homeowners to prepare older homes for solar installation.
- The Green Energy Money $aver (GEM$) program offers financing for solar panel systems and other energy-efficiency improvements. Eligible applicants include homeowners, renters, nonprofit organizations, small businesses, commercial tenants and state agencies. Applications are available through the Hawaiʻi Green Infrastructure Authority.
- Energy-efficient mortgages: The Federal Housing Administration (FHA) and the Department of Veterans Affairs (VA) allow financing for energy improvements like solar panels through an EEM.
More solar incentives in Hawaii
The Home Electrification and Appliance Rebate program (HEAR) helps low- and moderate-income households invest in energy-efficient appliances and retrofits. Check DSIRE for more information about solar incentives and policies in Hawaii.
| Incentive type | Eligible equipment | Amount | Applicable sectors | Administrator |
|---|---|---|---|---|
| Rebate program | Solar water heater | Up to $2,000 | Residential, commercial, federal government | Hawaii Energy |
| Rebate program | Solar water heater | Up to $1,500 | Residential, commercial | Kauai Island Utility Coop |
| Loan program | Solar water heater | Varies | Residential, multifamily residential | County of Kauai Housing Agency |
| Loan program | Solar panels | Up to $1,500,000 or 85% of project costs | Agricultural | Hawaii Department of Agriculture |
| Corporate tax credit | Solar thermal, solar panels | 35% | Commercial, residential, multifamily residential | Hawaii Department of Taxation |
Solar export programs in Hawaii
In Hawaii, net metering has unique attributes because of different local utility rates and interconnection standards. Utility companies operating in the state, including Hawaiian Electric and Kauai Island Utility Cooperative, each have specific rates and policies.
Check with HECO or KIUC for the latest solar policies and rates.
Today, most homeowners participate in one of Hawaiian Electric’s Smart Renewable Energy programs:
- Smart Renewable Energy Export: Allows homeowners to send excess electricity back to the grid in exchange for bill credits.
- Smart Renewable Energy Non-Export: Requires excess energy to be stored in a home battery instead of being exported to the grid.
What to know about net metering rates
How much you earn for exported electricity depends on the time of day. Hawaiian Electric pays higher rates during evening peak hours, usually from 5 p.m. to 9 p.m., when electricity demand is highest.
You also need a smart meter to participate in these programs. And even if your solar panels cover all your electricity use, Hawaiian Electric still charges a $25 minimum monthly bill for customers connected to the grid.
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. It works a lot like any other type of loan — there’s an application and approval process, and you pay it back over time (with interest).
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.
» SOLAR PANELS: Lease vs. buy
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.
Average solar panel installation cost by system size in Hawaii
| 5 kW | 6 kW | 7 kW | 8 kW | 9 kW | 10 kW | |
|---|---|---|---|---|---|---|
| Before any incentives | $16,350 | $19,621 | $22,891 | $26,161 | $29,431 | $32,701 |
FAQ
Can I still get the federal solar tax credit?
The federal solar investment tax credit (ITC) expired for homeowner-owned systems after Dec. 31, 2025. Homeowners with eligible systems placed in service by that date may still be able to claim it on the appropriate tax return.
Homeowners with eligible property placed in service by Dec. 31, 2025, may still claim it on the appropriate tax return.
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 $49,459 over 25 years. Even if your solar doesn’t cover all of your energy needs, you still stand to save a lot by adding a system to your home.
Are there any disadvantages to going solar in Hawaii?
Some residents who switch to solar have a few complaints, mostly related to customer service and issues with ongoing monitoring. It can also take a long time, according to Richard in Captain Cook: “Setting up my solar took too long. From start to finish, it was about a year. I think getting permits and moving through the government procedure could’ve been a lot faster.”
» MORE: Solar energy pros and cons
Is my HOA allowed to restrict solar panels?
Homeowners associations in Hawaii are not allowed to restrict solar panel usage, according to the Hawaii state legislature.
Article sources
ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
- DSIRE, “Programs.” Accessed May 22, 2026.
- Hawai’i Green Infrastructure Authority, “GEM$ On-Bill Program.” Accessed May 22, 2026.
- Hawaiian Electric, “Bring Your Own Device Plus.” Accessed May 22, 2026.
- State of Hawaii Department of Taxation, “Renewable Energy Technologies Income Tax Credit (RETITC) – HRS §235-12.5.” Accessed May 22, 2026.
- Hawaii Energy, “Water Heating Rebates.” Accessed May 22, 2026.
- Kauai Island Utility Cooperative, “Solar Water Heating Programs.” Accessed May 22, 2026.
- State of Hawaii Agricultural Division, “Alternative Energy Loan Program.” Accessed May 22, 2026.
