What Solar Incentives and Rebates Are Available to Hawaii Homeowners?
Hawaii gets more sunshine than almost any other U.S. state, which makes solar panels a natural fit. But the upfront cost of a residential solar system can still be a barrier. The good news: a stack of federal, state, and utility-level incentives can significantly reduce what you pay out of pocket. This guide breaks down every major program available to Hawaii homeowners right now.
The Federal Solar Investment Tax Credit (ITC)
The biggest incentive available to any U.S. homeowner — including those in Hawaii — is the federal Solar Investment Tax Credit, often called the ITC or the Residential Clean Energy Credit.
How it works: You can claim a credit equal to 30% of your total solar installation cost directly against your federal income tax bill. If the credit is larger than what you owe in a single year, you can carry the remainder forward to future tax years.
Key details:
- The 30% rate is locked in through 2032.
- It applies to panels, labor, inverters, battery storage (if charged by solar), and permit fees.
- You must own your system — not lease it — to claim the credit.
- There is no dollar cap on the residential credit.
For an average Hawaii system priced around $20,000–$30,000, a 30% credit represents $6,000–$9,000 in tax savings. Always confirm eligibility with a tax professional.
Hawaii State Solar Income Tax Credit
Hawaii layers its own state-level tax credit on top of the federal ITC, making it one of the most generous combinations in the country.
How it works: Hawaii offers a 35% state income tax credit on the cost of your solar photovoltaic system, capped at $5,000 per 5-kilowatt system (or $2,500 per kilowatt for systems under 5 kW). The credit is claimed on your Hawaii state income tax return.
Important rules:
- You must use a Hawaii-licensed contractor.
- The credit applies to the purchase price of equipment and installation.
- Unused credit can be carried forward for up to five years.
- Leased systems typically do not qualify for the state credit.
Between the federal 30% and Hawaii's 35%, many homeowners offset more than half of their system cost through credits alone.
Hawaii Utility Programs and Net Energy Metering
Hawaii's main utility, Hawaiian Electric (HECO), along with Maui Electric and Hawaii Electric Light, offer programs that affect how quickly your solar investment pays off.
Net Energy Metering (NEM) and Customer Grid Supply
Hawaii's original net metering program closed to new applicants years ago. Current options include:
- Customer Grid Supply Plus (CGS+): Excess energy you send to the grid is credited on your bill at a rate set by the utility. Rates vary by island and time of day — check with your utility before signing a contract.
- Smart Export: A tariff program where your exported power earns a fixed credit rate for a set term.
Because export credit rates can be lower than retail electricity rates, many solar installers in Hawaii now recommend pairing panels with a battery storage system (such as a Tesla Powerwall) so you use more of what you generate.
Property Tax and Sales Tax Benefits
Hawaii offers two additional financial protections for solar homeowners:
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Property Tax Exemption: In Hawaii, the added value a solar system brings to your home is exempt from property tax. Your property tax bill won't go up just because you installed solar — though rules can vary by county, so verify with your local assessor.
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No General Excise Tax Exemption (Caution): Unlike some states, Hawaii does not fully exempt solar equipment from its General Excise Tax (GET). Contractors typically pass the GET on to customers. Factor this into your cost comparison when getting quotes.
Green Energy Money Saver Loan Program (GEMS)
If upfront cost is your biggest obstacle, the Hawaii Green Infrastructure Authority (HGIA) has offered low-interest financing through its Green Energy Money Saver (GEMS) program. This on-bill financing option lets qualified homeowners pay for solar through their utility bill rather than a large upfront payment.
Program availability and terms change periodically — check current eligibility through our intake tool or visit the HGIA website directly.
How to Stack These Incentives
Here's a simplified example of how the incentives can layer together:
| System Cost | Federal ITC (30%) | Hawaii State Credit (35%, up to $5,000) | Estimated Net Cost | |---|---|---|---| | $25,000 | -$7,500 | -$5,000 | ~$12,500 |
Actual savings depend on your tax liability, system size, and contractor pricing. Talk to a licensed solar installer and a tax advisor to build an accurate picture for your situation.
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Frequently Asked Questions
H3: Do I need to own my home to get solar incentives in Hawaii?
You need to own the solar system, not necessarily the home in every case — but most credits and rebates apply to owner-occupied residential properties. Renters and condo owners face more restrictions. Confirm your specific situation with an installer or tax professional.
H3: Can I combine the federal ITC and the Hawaii state tax credit?
Yes. These are separate credits from separate governments. You apply the Hawaii credit on your state return and the federal ITC on your federal return. Both can apply to the same installation in the same tax year.
H3: How long does it take to get the credits after installation?
Tax credits are claimed when you file your returns for the year the system was placed in service. You won't receive a check — the credit reduces your tax liability. If your credit exceeds what you owe, you can carry it forward.
H3: Does adding a battery storage system qualify for incentives?
A battery system charged exclusively by solar qualifies for the federal ITC. It may also qualify for the Hawaii state credit. Standalone battery systems not connected to solar panels have different rules — verify with your installer and tax advisor.
H3: What happens if I sell my home after going solar?
Solar panels generally increase home resale value in Hawaii. Because of the property tax exemption, that added value won't increase your tax bill. If you've claimed the federal ITC, there are no clawback rules if you sell the home after installation — but confirm the details with a tax professional.
Take the Next Step
Hawaii's combination of abundant sunshine, high electricity rates, and stacked incentives makes solar one of the strongest investments a homeowner can make on the islands. But navigating credits, utility programs, and installer options takes time.
Talk to our 24/7 AI to see if you have a strong case for going solar — free, no obligation. → Start free intake