Are solar panels worth it in Hawaii?

It’s the best state for going solar, according to our research

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two-story home near the sea in hawaii with solar panels on the roof

Hawaii has the highest average solar potential of any state, relatively low rooftop solar installation costs and generally solar-friendly policies. These and other factors make it the best state for going solar.

The main drawback is the high upfront cost of purchasing and installing the panels and equipment. On the bright side, once that’s paid for, solar panels can significantly reduce or even eliminate your electricity bills. For many Hawaiian residents, the long-term savings outweigh the upfront costs within 6 years.


Key Insights

  • Depending on the size of your system and what financial incentives you qualify for, a typical residential solar panel installation costs $9,772 to $25,580 in Hawaii.
  • Residents may also take advantage of tax credits, loan programs and rebates to make going solar more affordable.
  • Over 25 years, Hawaii homeowners with solar panels avoid $64,565 in total utility costs on average.

7 factors to consider before getting solar panels in Hawaii

ConsumerAffairs has heard from thousands of solar customers who have already gone through the installation process. “Going solar is a no-brainer as an investment,” Jose in Haiku, Hawaii, told us. “You get a huge tax break and save big bucks over time.” For his property in the jungle of Maui, having a solar storage battery is a huge bonus. The transition was flawless, and it’s “a relief to never worrying about electricity again,” he told us.

It’s generally worth it if you like the idea of lowering your monthly utility bills, helping the environment and gaining more energy independence. But it doesn’t work out for everyone. Here’s what to consider before making the switch.

  1. Solar panel installation costs
  2. Your energy consumption
  3. Hawaii solar incentives
  4. Local net billing rates
  5. How long you live in your house
  6. How you pay
  7. The solar company you hire

1. Solar panel installation costs: $10,000 to $30,000

Average solar panel costs in Hawaii are relatively low compared to other states. Before the federal solar investment tax credit (ITC), a typical residential system ranges from $13,960 to $25,580. That price drops to $9,772 to $17,906 after considering the full 30% tax credit.

Most installers set the price according to the system's wattage, with a typical cost between $2.50 and $5 per watt. “Cost per watt” is a little like looking at the price per square foot when you buy a house. It helps you compare the value of solar energy systems in different sizes. In Hawaii, the average cost per watt is only $2.67.

Like most things, high-quality panels come with a more expensive price tag, but they often pay off in the long run with better performance and durability. The more efficient your panels are, the more electricity they produce and the less space they take up on your roof.

Average solar panel installation cost by system size in Hawaii

2. Your energy consumption

Look at your latest utility bills to see how much electricity your house needs each month. This tells you what size and capacity your solar system needs to be. A typical Hawaii household needs a system with a capacity of 7.96 kW to offset its electricity needs with solar energy. You might need a larger or smaller system, depending on your current energy consumption.

Once you know your current energy consumption, you can calculate your potential savings and the time it should take for your solar installation to pay for itself.

It’s a common misconception that solar panels always completely eliminate your monthly power bill — this is not always the case. Still, you’ll likely be paying much less than you would for traditional utility bills. For example, Michael in Kailua-Kona told us their bills are $30 or $40 each month — significantly less than the $350 he was paying before. Many only have to pay their utility’s minimum connection fee each month.

3. Hawaii solar incentives: tax credits and loan programs

The federal solar investment tax credit (ITC) is the most significant incentive that reduces the upfront cost of going solar in Hawaii. The ITC provides a 30% tax credit on your total system costs, including equipment, labor and permits. It will drop to 26% in 2033 and 22% in 2034.

Don’t get confused: The ITC is not a rebate or a refund. It is a credit that goes toward what you owe on federal income taxes. It can only offset the taxes you owe. No one is going to automatically mail you a check for 30% of what your system costs after you purchase it.

You can also combine the ITC with additional solar incentives in Hawaii, such as property tax exemptions and zero-interest loans.

  • GreenSun Hawaii: This program funds renewable upgrades like solar panels and water heating with good loan terms.
  • Honolulu Solar Loan Program: This loan is income-based and offers zero-interest loans to homeowners. You can also include money required for roof repairs in your loan.

4. Net metering rates in Hawaii

Hawaii has gone back and forth on net metering incentives over the years. The Public Utilities Commission ended its net metering program in 2015. In 2022, facing the shutdown of a major coal plant, Hawaiian Electric began paying homes to add batteries to existing solar systems. This was replaced with Bring Your Own Device in 2024, which reduced the reimbursement rate and upfront payments. Residents who sell their extra power to the grid now do so below the retail rate.

Hawaiian Electric's solar incentives went from being really generous with the Battery Bonus to basically discouraging homeowners from participating with Bring Your Own Device's below-retail rates and red tape. 

Installing solar still makes sense to offset your own electric bills. But they've drastically scaled back the financial incentives for sending surplus power to the utility's grid nowadays. Check with Hawaiian Electric (HECO) or Kauai Island Utility Cooperative for the most current rates and policies.

5. How long you plan to stay in your house

Buying solar equipment is expensive, and it takes five to 10 years to recover the initial investment through savings on electric bills. If you sell your house and move before then, you might not fully realize the financial benefits of your solar panels.

Solar panels typically last 25-30 years.

One study found that, on average, houses with solar panels sell for 4.1% more. Let’s say you spend $25,000 putting solar panels on a house that costs $400,000. It might sell for $16,400 more in a few years, according to Zillow. Over 25 years, Hawaii homeowners with solar panels avoid an average of $64,565 in utility costs.

In other words, don't get solar panels just because you want to sell your house soon. Instead, consider a home improvement project with a better return on investment, like remodeling your bathroom or kitchen.

6. How you pay

If you can, it’s often financially strategic to pay for the whole thing upfront. You own the system from day one and receive the benefits of available tax credits; plus, you don’t have to pay interest on a loan. Of course, paying cash is not always an option. That’s when loans, leases and other agreements come into play.

Given rising energy costs in Hawaii and elsewhere, financing solar panels makes sense as long as your monthly loan payment is less than what you would be paying the utility company anyway.

  • Solar loan: Solar loans work like any other type of loan. They have relatively low interest rates. Once you pay it off, you own your system outright.
  • Leasing options: Leasing panels is one way to get the benefits of solar energy without the high upfront cost. A solar lease works like a car lease — you get to use the panels but don’t own them. Leasing can be good if you have limited savings. Solar lease agreements typically last 20 to 25 years.
  • Power purchase agreement: Similar to leasing, a power purchase agreement (PPA) lets homeowners install solar panels without the upfront costs. You sign a long-term contract with a solar services provider to purchase the electricity generated by the panels at a predetermined rate. The provider owns and maintains the panels throughout the agreement, which usually lasts 10 to 25 years.
  • Home equity loans or lines of credit (HELOC): These let eligible homeowners borrow against equity in their house to finance a solar panel system. They often have variable interest rates, meaning monthly payments can increase over time.

Solar panels essentially generate free electricity once the initial installation costs are paid for. If you pay cash, solar panels usually pay for themselves within 6 years in Hawaii.

7. The solar company you hire

People have mixed experiences with solar companies. In the best-case scenario, it’s easy to make the switch and you’re happy with the system’s performance. In the worst-case scenario, you end up paying thousands for mid-tier solar equipment from a company with poor customer service and no follow-up or support.

One of the most common complaints is related to pushy sales reps who make promises that can’t be delivered. For instance, Kendra in Kaneohe told us she entered a solar lease, believing that it would be financially beneficial. Instead, her electric bill is still high, and she’s on the hook for the monthly lease payment.

That’s why it’s so important to thoroughly research and verify claims made by sales teams before making a decision. Use NREL’s PVWatts Calculator to estimate how much electricity a solar panel can produce over a year on your house — just type in your address. Project Sunroof is a free solar savings estimator powered by Google Earth imagery. 

Monthly costs: solar payments vs. savings

Think of going solar in terms of your monthly costs. For example, the difference between what Shannon in Waipahu pays toward the solar panel system and what they save on electric bills is about $50 each month. “It may not seem like a lot of money, but when you put over a span of a year, it's a decent amount of 600 bucks, so we're happy,” Shannon told us. “It's definitely worth it, especially if you aren’t happy with your current electric bill.”

Is my house a good candidate for solar panels?

In Hawaii and elsewhere, going solar ends up being worth it for many homeowners as long as their home is a good candidate to support a solar panel installation. Here’s what to think about before you commit:

  • How old are your appliances? The first step is to ensure that your electrical loads are as small as possible. For instance, if you have an older refrigerator or air conditioning unit, it’s smart to upgrade those before investing in solar panels.
  • How much sunlight do you get? Solar panels need regular exposure to sunlight to produce the most energy possible. Hawaii averages 5.5 to 6.5 peak sun hours each day. However, lots of shading — like trees or tall buildings above your roof — could make your solar system less efficient.
  • What is the size and angle of your roof? Hawaii (and the rest of the United States) is in the northern hemisphere, so solar panels perform best on south-facing roofs. The worst place to install would be on north-facing roofs, especially if those roofs have a high pitch. For example, if the only place you can install is a north-facing roof with a 30-degree pitch, your costs will likely go up by 30% to 40%.
  • What is the condition of your roof? If you have to replace your roof, do that before you install solar panels. Solar panels are designed to last up to 30 years, so you want your roof to last just as long. Otherwise, it could cost thousands to remove the panels, fix your roof and reinstall the panels again.

Pros and cons of solar panels in Hawaii

The main drawback is the high upfront cost of purchasing and installing the panels and equipment. On the bright side, once that’s paid for, solar panels can significantly reduce or even eliminate your electricity bills. For many, the long-term savings outweigh the upfront costs.

We’ve heard from more than 100,000 verified solar customers since 2018. A couple of things we know for sure: People like powering their homes with a reliable source of cheap, clean energy. People don’t like getting into solar contracts that don’t meet their expectations.

Hawaii’s sunny climate maximizes the amount of power produced by solar panels. But you can expect some seasonal fluctuation in how much energy your panels produce.

Pros

  • Long-term savings
  • Better for the environment
  • Low maintenance costs
  • May increase home resale value
  • Federal and local solar incentives

Cons

  • Upfront costs
  • Seasonal production variations
  • Performance can be affected by shading from trees or buildings
  • Potential changes to buyback rates

Benefits of solar panels in Hawaii

The benefits are somewhat obvious. “We have one of the highest electrical rates in the nation,” James in Haleiwa told us. “Besides saving $400 to $500 a month on our electricity bills, it feels so good to know my house is powered by the sun.”

  • Better for the environment: Traditional energy sources like coal and natural gas release carbon dioxide and other harmful pollutants into the air. Solar panels generate electricity from sunlight, a clean and renewable energy source. Installing solar panels on your roof helps the environment primarily by reducing greenhouse gas emissions and dependence on fossil fuels.
  • Higher home resale value: Installing solar panels can significantly increase a home's value. According to the study mentioned above, houses with solar panels sell for 4.1% more on average. The exact increase in value varies by location, with homes in active solar markets sometimes seeing even higher boosts.
  • Cheaper energy bills: Electricity rates in Hawaii are extraordinarily high, so the savings can add up to a lot over time. Going solar now also means that your monthly energy expenses will be more predictable (and very often significantly lower).

Drawbacks of solar panels in Hawaii

The main obstacle to going solar is the high upfront cost of purchasing and installing solar panels, inverters and other equipment. Then, since solar panels do not generate electricity at night, you need to pull power from the grid or get a storage battery to keep your lights on.

  • Solar equipment is expensive: Even with rebates and other financial incentives, the price typically starts between $10,000 and $30,000. It’s even more expensive if you want a solar battery for energy storage. Solar battery costs are generally between $7,000 and $18,000. Getting a solar battery might be strategic If net billing rates continue to decline in Hawaii. That way, you can store energy at home instead of tapping into the local grid when you need to.
  • Energy production varies: Solar panels are dependent on weather conditions and available sunlight, meaning their performance can fluctuate with cloud cover or shading from trees and buildings. Seasonality also affects how much energy they can produce.
  • Some solar companies are sketchy: Like in any booming industry, some salespeople want to make a quick buck and might say anything to close a sale. It’s important to read your contract carefully, especially if you finance or lease a system. Some solar companies put a lien on your house. Unfortunately, if you’re not dealing with a reputable company, you could lose your home.

» MORE: Solar energy pros and cons

Find solar companies in Hawaii

A good solar company helps you navigate local incentives, permitting and net metering policies. Compare our picks for the top solar companies in Hawaii to learn more.

Do you own or rent?

Hawaii solar FAQs

Does Hawaii really pay for solar panels?

We are not aware of any programs for free solar panels in Hawaii at this time. However, you can also lease equipment for little to no upfront costs. The downside there is that you won’t be eligible for the federal solar tax credit.

» FREE SOLAR PANELS: Are they really free?

How does the federal solar tax credit work?

The federal solar investment tax credit (ITC) lets you deduct 30% of what you spent installing solar panels from your federal income taxes. It is a deduction from what you owe on federal income taxes the year your system becomes operational. So, it’s only helpful if you owe federal taxes in the first place. You won’t get a check reimbursing you for 30% of what your system costs.

The solar tax credit is nonrefundable. This means you can only claim a credit up to the amount of tax you owe for the year. If the credit is larger than your tax bill, you won’t get the excess amount refunded to you. Any unused portion of the credit can be used to reduce the taxes you'll owe in future years.

» MUST KNOW: Tax deductions for homeowners

​​How long does it take to install solar panels in Hawaii?

Installation times depend on a range of factors, especially seasonality and supply chain issues. The actual installation might take only a day, but it takes time to design and plan, you also have to activate the system.

Is it cheaper if I install solar panels myself?

It’s potentially cheaper to install solar panels yourself. It’s also tricky and dangerous if you don’t know what you’re doing, especially for a large residential project.

» DIY solar panels: Pros and cons

How long do solar panels last in Hawaii?

Most solar panels installed in Hawaii are designed to last 25 to 30 years.

How do I choose a solar installation company?

The best solar energy companies have a few things in common: great reviews, transparent contracts, reliable equipment and comprehensive warranties. When hiring a solar installer in Hawaii, look for companies with years of experience in Hawaii and good local reputations. Get multiple quotes from different solar companies to compare prices and services. Be cautious of companies that provide significantly lower quotes than others — this may indicate lower quality.

Like in any booming industry, some salespeople want to make a quick buck and might say anything to close a sale. It’s important to read your contract carefully, especially if you finance or lease a system.

» TIPS: Get the best solar quotes

Will my solar panels work on cloudy days?

Solar panels still work on cloudy days, but the capacity is reduced by around 20%. Direct sunlight definitely boosts energy output.

Bottom line: Is going solar in Hawaii worth it for you?

For a lot of homeowners, solar panels are worth it as long as their cost savings over time outweigh the initial investment. Others are happy to go solar for the environmental benefits alone.

Audra in Honolulu, an early adopter of solar panels, emphasized the energy cost savings and environmental benefits. “As oil prices increase over time I assume that so will energy cost, therefore, I decided to invest in renewable energy,” she told us.

“Additionally, I want to help save the environment and reduce greenhouse gasses that's leading to global warming,” she continued. “I've lived in that house for over 35 years and I can see how the climate has changed since the summer months have become much hotter.”

Depending on the size of your system and what financial incentives you qualify for, a typical residential solar panel installation costs $9,772 to $25,580 in Hawaii. Over 25 years, Hawaii homeowners with solar panels can save about $64,565 in total utility power costs.

If you can afford it, buying your solar energy system outright typically provides the highest return on investment. You own the system from day one and receive the benefits of available tax credits. Plus, you don’t have to pay interest on a loan.

Solar costs and savings in Hawaii vs. Pacific Coast states

*To fully offset energy usage; **Over 25 years

» EXPLORE: Solar energy statistics


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:
  1. Database of State Incentives for Renewables & Efficiency, "Hawaii Solar Programs." Accessed April 16, 2024.
  2. SolarReviews, “How much do solar panels cost in Hawaii, 2024?” Accessed April 16, 2024.
  3. Solar Energy Industries Association, "Hawaii Solar." Accessed April 16, 2024.
  4. State of Hawaii, “Important Updates On Hawaii’s Distributed Energy Resources (DER) Programs." Accessed April 16, 2024.
  5. Hawaii Administrative Rules, “Title 18 Department of Taxation, Chapter 235.” Accessed March 7, 2024.
  6. Honolulu Civil Beat, “Will a New Order Shut the Door on Future Rooftop Solar Across Hawaii?” Accessed March 5, 2024.
  7. Hawaii State Energy Office, “Renewable Energy Permitting Wizard.” Accessed March 6, 2024.
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