What Solar Incentives and Rebates Are Available in Hawaii?
Hawaii has some of the highest electricity rates in the country — and some of the best solar resources in the world. That combination has made the Aloha State a top market for residential solar. The good news is that several financial incentives can significantly lower what you pay out of pocket. Here's a plain-English breakdown of what's available right now.
The Federal Solar Tax Credit (ITC)
The federal Investment Tax Credit (ITC) is available to homeowners in every state, including Hawaii. As of 2024, it lets you claim 30% of your total solar installation cost as a credit against your federal income taxes.
Key points to know:
- This is a tax credit, not a rebate. It reduces what you owe the IRS dollar for dollar.
- If the credit is larger than your tax liability for the year, you can carry the remainder forward to future tax years.
- It applies to panels, inverters, batteries (if paired with solar), and installation labor.
- The 30% rate is locked in through 2032, then steps down gradually.
Always confirm eligibility with a tax professional, since your personal tax situation affects how much you can actually use.
Hawaii State Income Tax Credit
Hawaii offers its own state income tax credit for residential solar. Under Hawaii Revised Statutes § 235-12.5, homeowners can claim a credit equal to 35% of the cost of a solar energy system, capped at $5,000 per 5 kW of system capacity for photovoltaic systems.
Because Hawaii's credit and the federal ITC can both be applied to the same installation, stacking them is one of the most powerful ways to reduce your total cost. However, the state credit has specific rules about what qualifies and how to claim it, so confirm the current limits with your tax advisor or a licensed solar contractor before signing any contract.
Net Energy Metering (NEM) — Know the Current Rules
Net energy metering lets you send excess solar power back to the grid and earn credits on your utility bill. However, Hawaii's metering landscape has changed significantly in recent years.
Hawaii's utilities — primarily Hawaiian Electric (HECO) and its subsidiaries — replaced traditional NEM with several alternative tariff programs, including:
- Customer Grid-Supply Plus (CGS+) — exports credited at a set rate
- Self-Supply — no grid export; system sized to match your own usage
- Smart Export — for battery-paired systems with time-varying export credits
The right program for your home depends on your usage patterns, roof size, and whether you add battery storage. Rates and program availability can change, so check directly with your utility or ask a Hawaii-licensed solar installer which option fits your situation.
Hawaii Green Infrastructure Loan Program
If upfront cost is a barrier, the Hawaii Green Infrastructure Loan (GIL) Program — administered through the Hawaii Green Infrastructure Authority (HGIA) — offers low-interest financing for solar and energy-efficiency upgrades. This program is designed for homeowners who may not qualify for traditional financing.
Loan terms, interest rates, and eligibility requirements vary and are updated periodically. Visit the HGIA's official site or talk to a solar advisor through our free intake tool to learn whether this program suits your situation.
Utility and Local Rebates
Utility-sponsored rebates in Hawaii have been limited compared to many mainland states, largely because the state's aggressive tax credit structure already offsets a large share of costs. That said, programs do change — and some counties or local organizations occasionally offer additional incentives.
Before signing a solar contract, ask your installer:
- Are there any current utility incentives I qualify for?
- Does the county offer any property tax exemptions for solar?
- Is the system eligible for the state sales tax exemption?
Hawaii does exempt solar energy systems from general excise tax under certain conditions, which can further reduce your effective cost.
Property Tax Exemption for Solar
Adding solar panels typically increases your home's value — but Hawaii provides a real property tax exemption for the added value attributable to a solar energy system. This means your property taxes generally won't go up just because you installed panels. Rules are administered at the county level (Honolulu, Maui, Hawaii County, Kauai), so confirm specifics with your local tax office.
Frequently Asked Questions
Can I claim both the federal and Hawaii state solar tax credits?
Yes. Most homeowners can stack the 30% federal ITC and Hawaii's 35% state tax credit on the same installation. The combined effect can cover a substantial portion of total system cost. Confirm with a tax professional how each credit applies to your specific liability.
Does Hawaii offer solar rebates through the utility?
Direct utility rebates are limited in Hawaii right now. The main financial benefits come from state and federal tax credits, net energy metering tariffs, and financing programs. Your installer should provide an up-to-date picture of what's active when you get quotes.
How long does it take to get the tax credits?
The federal ITC is claimed when you file your annual federal return for the year the system is installed. The Hawaii state credit works the same way on your state return. You'll need IRS Form 5695 for the federal credit and Hawaii Form N-342 for the state credit.
Is battery storage eligible for incentives in Hawaii?
Batteries paired with a solar system are generally eligible for the federal ITC. Hawaii's state credit eligibility for standalone or paired storage can vary — confirm current rules with your tax advisor.
What's the best way to compare solar quotes in Hawaii?
Get at least three quotes from Hawaii-licensed contractors. Ask each one to show you the net cost after all applicable credits and the projected utility savings under the tariff program that applies to your home. A lower sticker price isn't always the best deal once incentives and program differences are factored in.
Hawaii's combination of high utility rates, strong sunlight, and layered incentives makes solar one of the more financially compelling upgrades a homeowner can make here. Understanding which programs apply to your home — and in what order to apply them — is the first step.
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