There’s no way around it: Installing solar panels is expensive. In Hawaii, a typical 8-kilowatt residential system costs $26,161 before any financial incentives. After considering the federal solar tax credit, that price drops to $17,351.
Unlike some other states, Hawaii offers great incentives, like property tax exemptions and zero-interest loans for eligible residents. Some are area-specific, so make sure to check if they are available on your island.
NOTE: President Trump’s “One Big Beautiful Bill,” signed in July of 2025, phases out the federal solar tax credit. You now only have until Dec. 31, 2025, to install a system and get the 30% solar tax credit. Compare top solar companies now.
The federal solar investment tax credit (ITC) is the most significant solar incentive in Hawaii. Tax credits offset your tax liability, so it’s only useful if you owe federal income taxes in the first place.
Jump to insightHawaii has additional incentives to make it even more affordable to switch to solar energy. These include residential, commercial and agricultural tax credits, loan programs and rebates.
Jump to insightCounties in Hawaii must prioritize permit applications for new construction with solar and energy efficiency measures.
Jump to insightSolar panel incentives in Hawaii
You might already be aware that Hawaii has had ups and downs with solar incentives lately. In 2022, Hawaiian Electric had a great “Battery Bonus” program that paid homeowners cash rewards just for adding battery storage to their solar systems — a sweet deal while it lasted. That program ended this year and was replaced by the "Bring Your Own Device" setup.
Now, Hawaiian Electric pays you for sending excess solar power to the grid, but at rates lower than the retail electricity price. So, you're actually losing money compared to just using the solar for your own home. On the bright side, you can still get a $500 reward for enrolling. There are other solar incentives you might be eligible for.
Federal solar investment tax credit
The federal solar investment tax credit (ITC) reduces your federal tax liability by 30% of the cost of installing solar photovoltaic (PV) technologies, more commonly known as solar panels. This tax credit applies to both residential and commercial installations and includes the cost of the solar panels and other equipment, as well as labor and additional features for monitoring the system.
For example, if you spend $10,000 installing a solar panel system, the ITC is worth $3,000. If you owe $15,000 in taxes, the ITC reduces what you owe to $12,000. You don’t get these benefits automatically, though. You have to claim your solar equipment, labor and permits on your federal taxes for the same year you started using your system on Form 5695.
Don’t get confused: the ITC is a credit, meaning it directly decreases the amount of taxes you owe. This is different from a deduction, which reduces your taxable income. Nor is it a rebate or a refund. It only offsets your tax liability; you can't take advantage of the ITC if you don’t owe taxes in the first place. However, the credit rolls over to future tax years if you don’t use the full amount.
Federal solar tax credit expires at the end of 2025
The ITC is now set to expire at the end of the year, much earlier than previously scheduled. The credit was expected to drop gradually, then fully expire in 2035 — but those future step-downs have been eliminated under the “One Big Beautiful Bill,” signed in July of 2025. This means you have until Dec. 31, 2025, to install and pay for a system to qualify for the 30% credit.
Solar tax breaks in Hawaii
Residents may also take advantage of the following solar tax incentives.
- Solar and wind energy tax credit: Hawaii has a 35% income tax credit for homeowners installing solar panels, solar water heating and space heating equipment. This incentive also applies to commercial properties.
- Property tax exemption: In Honolulu, clean energy improvements like solar panels are exempt from property taxes for 25 years. This means that the value solar panels add to your home is excluded from tax calculations.
Solar loan programs in Hawaii
Additionally, the City and County of Honolulu has a home rehabilitation loan program, which could help pay to make your roof solar-ready.
- GEM$ On-Bill Program: The Green Energy Money $aver (GEM$) program offers financing for solar panel systems and other energy efficiency investments. It’s available to eligible homeowners, renters and small business owners, as well as nonprofit organizations, commercial tenants and state agencies. You can apply through the Hawaiʻi Green Infrastructure Authority.
- GreenSun Hawaii: This program helps lenders offer loans for solar water heating systems, heat pumps and solar photovoltaic systems to homeowners and nonresidential properties. Terms vary from lender to lender.
- Interest-free solar loans: The City and County of Honolulu has zero-interest loans for low- and moderate-income households to finance solar panels and solar water heating.
- 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 | Amount | Eligible solar equipment | Applicable sectors | Administrator | |
|---|---|---|---|---|---|
| KIUC Solar Water Heating Program | Rebate program | $1,500 | Solar water heating | Residential, commercial | Kauai Island Utility Coop |
| Maui Solar Roofs Initiative (MSRI) | Loan program | Varies | Solar water heating | Residential | Hawaii Energy |
| Hawaii Energy Water Heating Program | Rebate program | $200-$1,500 | Solar water heating | Residential, commercial, federal government | Hawaii Energy |
| Solar Wind Energy Credit | Corporate and personal tax credit | 35% of solar thermal and PV system and installation costs | Solar panels, solar water heating, solar space heater, solar thermal electric | Commercial, residential, multifamily residential | Hawaii Department of Taxation |
| Alternative Energy Loan Program | Loan program | Up to $1,500,000 or 85% of project costs | Solar panels | Agricultural | Hawaii Department of Agriculture |
| Energy Conservation Subsidy Exclusion | Corporate tax exemption | 100% of energy conservation subsidies provided by public utilities | Solar panels, solar water heater, solar space heater | Residential, multifamily residential | United States Internal Revenue Service |
| Residential Energy Conservation Subsidy Exclusion | Personal tax exemption | 100% of energy conservation subsidies provided by public utilities | Solar panels, solar water heater, solar space heater | Residential, multifamily residential | United States Internal Revenue Service |
| Energy Efficient Mortgages | Loan program | Up to 100% of improvement costs | Solar panels, passive solar, solar water heater, solar space heater | Residential | Federal Housing Administration |
| Energy Efficient Mortgages | Loan program | $3,000-$6,000 | Solar panels, passive solar, solar water heater, solar space heater | Residential | Veterans Administration |
What to know about net metering in Hawaii
Net metering is when a solar system produces more electricity than is consumed and sends the excess to the local power grid. 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 (HECO) and Kauai Island Utility Cooperative, each have specific rates and policies.
Hawaii has implemented a program called Customer Grid-Supply (CGS) that lets you sell excess solar energy back to the grid at a predetermined rate. The rate per kilowatt hour (kWh) is determined by what island you live on. Another option, the Customer Self-Supply (CSS) program, lets you store excess energy in batteries for personal use.
A few stipulations and rules apply to net metering in Hawaii. You still have to pay a $25 minimum monthly bill for as long as you’re connected to the power grid, even if you produce 100% of your electricity. Check with Hawaiian Electric (HECO) or Kauai Island Utility Cooperative for the most current rates and policies.
How much are solar panels in Hawaii?
Before considering the federal solar tax credit, solar panel costs in Hawaii typically range from $10,844 to $32,701. On the high end, one solar customer in Hanalei, Hawaii, told us they spent $100,000 on a system.
Leasing or entering a power purchase agreement (PPA) is often cheaper upfront, but you won’t be eligible for the federal solar tax credit and other financial incentives.
Average solar panel installation cost by system size in Hawaii
| 5 kW | 6 kW | 7 kW | 8 kW | 9 kW | 10 kW | |
|---|---|---|---|---|---|---|
| Before federal tax credit | $13,960 | $15,996 | $18,473 | $21,440 | $23,266 | $25,580 |
| After federal tax credit | $9,772 | $11,197 | $12,931 | $15,008 | $16,286 | $17,906 |
Solar resources in Hawaii
Below are some additional resources to help guide you through going solar in Hawaii.
- Hawaii State Energy Office
- Hawaii Energy Efficiency Programs, Rebates and Solar Initiatives
- Hawaii Energy’s Clean Energy Allies
- Hawaii Solar Energy Association
- KIUC Rooftop Solar
Find solar companies in Hawaii
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.
| Company | Customer rating | Professional installation | Payment options | Warranty | Year founded | |
|---|---|---|---|---|---|---|
 LA Solar Group | Learn More | 3.6 |  | Cash, loan, lease, PPA | 25 years | 2010 |
 Sunrun | Get Started | 4.3 | | Cash, loan, lease | 25 years | 2007 |
 ShopSolar | Learn More | 4.7 |  | Cash, loan | Varies | 2018 |
FAQ
How do I know if my house is a good candidate for solar?
It’s best to have plenty of unshaded roof space that faces south or west for optimal sun exposure. Solar photovoltaic (PV) technologies, more commonly known as solar panels, absorb sunlight and convert it into usable electricity. So, if you have a lot of shading around your house, they might not get enough sun to power your home.
The condition of your roof matters too — if it needs replacement soon, do that before installing solar panels. Installing solar panels on an old roof might mean you have to remove the panels, replace your roof and then reinstall the panels. This will cost around $5,000 for a 19-panel setup.
It’s also smart to upgrade any old, inefficient appliances first. Reducing your electrical loads now means you can get a smaller system, which will be cheaper.
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
How much can I save with solar panels in Hawaii?
Over 25 years, Hawaii homeowners with solar panels avoid $43,740 in utility costs on average. Your current electric bill is the starting point for assessing the financial benefits of transitioning to solar energy. Knowing your average energy consumption helps determine the size and capacity of the solar system you need. Once you know this, you can figure out potential savings and how long it should take for your solar installation to pay for itself.
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.
How can I pay for solar panels?
Paying upfront is the most obvious way to pay for solar panels, but many don’t have that kind of money saved up. If you’re one of those people, you can finance solar panels with a solar loan. 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).
» SOLAR PANELS: Lease vs. buy
What has Hawaii’s investment in solar been so far?
Total solar investments in the state are $4.5 billion so far, according to the Solar Energy Industries Association.
Bottom line
Federal, state and local incentives help make going solar more affordable. It’s still expensive, but the upfront investment is worth it for many Hawaii residents. The ConsumerAffairs Research Team conducted an in-depth analysis to determine the cost of going solar in Hawaii and the average cost in other states.
Solar costs and savings in Hawaii vs. Pacific Coast states
| 6 kW system cost (before incentives) | 10 kW system cost (before incentives) | Typical system size needed* | Average cost per watt | Total utility power cost savings** | |
|---|---|---|---|---|---|
| Alaska | $14,460 | $24,100 | 5.1 kW | $3.14 | $29,737 |
| California | $14,669 | $24,449 | 7.2 kW | $2.44 | $136,109 |
| Hawaii | $19,621 | $32,701 | 5.1 kW | $3.27 | $43,740 |
| Oregon | $16,480 | $27,466 | 5.9 kW | $2.75 | $50,441 |
| Washington | $16,044 | $26,740 | 7.1 kW | $2.67 | $33,367 |
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, "Hawaii Solar Programs." Accessed April 16, 2024.
- SolarReviews, “How much do solar panels cost in Hawaii, 2024?” Accessed April 16, 2024.
- Solar Energy Industries Association, "Hawaii Solar." Accessed April 16, 2024.
- State of Hawaii, “Important Updates On Hawaii’s Distributed Energy Resources (DER) Programs." Accessed April 16, 2024.
- Earth.Org, “Fighting Climate Change in Hawaii with Solar Energy.” Accessed April 17, 2024.
- City and County of Honolulu, “RLP Solar Application.” Accessed April 17, 2024.
