Hawaii has the highest electricity costs in the country, largely due to its reliance on imported energy because of its island location. The average electricity bill in Hawaii is around $215.89 with a monthly consumption of 501 kWh. The Hawaii Clean Energy Initiative, a group formed through the US Department of Energy, set the ambitious goal to transition to 100% renewable energy by 2045.
Although Hawaii has poor state-level solar incentives, all US residents are able to apply for a 30% tax credit on the cost of any clean energy additions to their homes, thanks to the Inflation Reduction Act. You don’t have to wait for the whole state to overhaul its energy industry — the IRA’s benefits have made it easier than ever to switch to clean energy. Putting solar panels on your own home can help you contribute to the state’s transition away from fossil fuels while also saving you money by avoiding those high electric bills.
Here’s what you need to know about getting solar panels in Hawaii, including the best installers operating in the state.
Best national solar panel companies in Hawaii
There are dozens of solar installers in Hawaii to choose from. If you’re interested in contracting with a national solar panel company, these are the solar installers operating within the state. You should make sure to compare quotes from multiple companies to help you find the right fit for your budget.
Tesla Solar
Most affordable
Tesla’s solar branch seems to be the least loved of Elon Musk’s ventures. Even Tesla’s Solar Roof seems to get more love.
If price is the thing you won’t budge on, consider Tesla. By all accounts, Tesla installs quality panels and makes the closest thing there is to a household name in solar storage: the Powerwall.
Where you might miss out is customer service. Discussion online seems to suggest Tesla’s service is a bit of a gamble.
Local solar panel companies in Hawaii
You don’t have to go with a big national company. Here are some local companies we identified in Hawaii. Shop around and check with friends and neighbors to see who they worked with.
Local installer Independent Energy handles the entire solar process, from consultation to powering on your system. The company installs a variety of solar panel brands, including Panasonic, REC, Qcells and Hyundai. Solar battery options include Generac, Enphase and Fortress. All products come with a 10- to 25-year manufacturer warranty.
Pacific Energy is a solar consulting and installation company in Maui. As a local company, Pacific Energy has experience with the solar policies and regulations on the island. Pacific Energy installs quality solar panels, including SunPower’s Maxeon solar panels, which have an industry-leading efficiency rating (22.8%). The panels include a 25-year warranty for service and quality of work. The company also installs the Tesla Powerwall solar battery for solar energy storage.
Since 1988, Provision Solar has served Oahu with solar products and services. Provision Solar is an authorized dealer for SunPower and installs highly efficient Maxeon solar panels, SolarEdge inverters and the Tesla Powerwall solar battery.
How to determine which solar company in Hawaii is best for me
Getting solar panels or any kind of home energy equipment is not a one-size-fits-all proposition. You’ll want to find a company that offers the equipment you’re interested in. Each installer offers different solar panels, solar batteries and warranties for their products.
You need to do enough research to trust the company doing the installation. Search for customer reviews online for each company you consider, and get recommendations from any of your neighbors that have had solar panel installations done on their own homes. It’s also important to research how each company installs solar panel systems: some companies send in-house employees to do installations, while others hire out subcontractors for the job.
Most importantly, get quotes from multiple companies. The pricing of solar systems can vary widely, and much of the cost is driven by factors other than equipment.
How much do solar panels cost?
The total cost of installing a solar panel system depends on several factors, including roof maintenance, installation costs, the number of panels you need and other components like solar batteries. You may be able to offset the cost with solar incentives and rebates.
Data specific to Hawaii is hard to come by. Below is a chart displaying what the average cost of a typical solar panel system is for a US homeowner, according to data sourced from FindEnergy.com.
Average cost of solar panels across the United States
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| Typical system size (kW) | Price per watt | Total installed cost | Cost after 30% federal tax credit | |
|---|---|---|---|---|
| Hawaii | 5 | $4.22 | $21,100 | $14,770 |
| National Average | 8.6 | $3.67 | $31,558 | $22,091 |
The infographic below displays average total prices, costs per watt and system sizes for solar panel systems throughout different states, according to data from FindEnergy.com. Prices shown do not represent fluctuations from tax credits or state solar incentives. If FindEnergy doesn’t have solar data for a particular state, it appears grayed out on the map.
Hawaii solar panel incentives or rebates
Federal and local incentives and rebates offset the cost of solar systems to help Hawaii residents choose renewable energy. The residential clean energy credit is a federal solar incentive crediting 30% of the total price of a solar panel system to you when you file your federal tax return. The credit was increased and extended in the Inflation Reduction Act of 2022.
In addition, Hawaii offers a property tax exemption and other incentives. The following are solar incentive programs available in Hawaii.
Hawaii solar incentives
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| Program | Description |
|---|---|
| Hawaiian Electric Smart Export | Similar to net metering, customers receive credits for exporting excess energy generated by their solar panel system back to the energy grid from 4 p.m. to 9 a.m. |
| Honolulu Solar Loan Program | Zero-interest loan programs are offered by the city and county of Honolulu to homeowners for the installation of a solar system. The program aims to assist those of low to moderate income status. |
| Renewable Energy Technologies Income Tax Credit | Eligible homeowners may receive up to a 35% credit or $5,000, whichever is less, toward the total cost of a residential photovoltaic solar system. |
| Residential Clean Energy Credit | Apply through the IRS for a 30% federal tax credit for solar systems installed from the beginning of 2022 through 2032. The credit will decrease to 26% in 2033, 22% in 2034 and expire in 2035. |
How solar-friendly is your state?
CNET recently ranked states based on their residential solar policies: the laws and regulations affecting consumer-level solar panel installation and adoption. These policies play a major role in determining how accessible and affordable a solar panel system is to the average resident.
Each state was evaluated through a methodology and scored based on eight categories. The final score was converted to a letter grade.
Here’s how your state scored on CNET’s solar policy test.
Hawaii
Grade: D
Incentives available:
- State tax credit of up to 35% of the solar panel system cost, up to $5,000. System must be at least 5 kW.
- Utility-governed net billing — solar buyback at the wholesale rate
- Local property tax exemptions on solar panel systems
- Statewide community solar programs
Strongest scoring categories:
Hawaii’s state tax credit isn’t the best of the bunch, but it’s a solid value add for anyone looking to go solar. Residential systems are more often than not going to hit that 5 kW mark necessary for the credit, and it’s a good deal to be able to stack an additional $5,000 on the 30% federal tax credit.
Categories to improve:
Utility-governed net billing means the utility companies are going to have the final say in the exchange rate for your excess electricity, and that wholesale rate is going to set back your solar payback period. Hawaii also has no state sales tax exemption on solar equipment, and property tax exemptions are only offered in certain local areas.
How to pay for solar panels in Hawaii
As with any major purchase, you will want to think about how to finance the cost of solar panels. Keep in mind, the money from the tax credit won’t be yours until after you’ve filed your taxes for the year the panels are installed. It’s also important to factor in the solar payback period, which is the time it takes to recoup your upfront investment and when savings begins.
Here are some ways to pay for solar panels:
Solar loan: Your solar installer likely has a relationship with a bank or other financial institution to offer a loan designed for solar panels. This can be a great deal, but you’ll want to get multiple offers to ensure the rates and terms are the best.
Lease or power purchase agreement: Some solar companies allow you to lease your system or enter a power purchase agreement. If you choose to lease, you won’t own the solar system, you’ll just pay for use of the equipment. Entering a power purchase agreement means you’ll buy solar energy generated from the solar company to power your home. The price you’ll pay is usually lower than the retail rate from your local utility company. Note that not all incentives are available with a lease or power purchase agreement.
Cash: This approach only works if you happen to have thousands of dollars sitting around in a bank account. If you don’t have that yet, but you want solar panels in the future, consider saving money in a high-yield savings account. Interest rates are high right now, and this can help you save faster.
Home equity: You don’t have to use a loan from your solar company. Financial institutions offer home equity loans and lines of credit (or HELOCs) that are commonly used for home improvement projects. These loans can be used for basically any purpose, and they may be a good fit for your solar project. Shop around and make sure you’re getting the best deal.
Personal loan: You can also borrow the money through a personal loan. The main difference between a personal loan and a home equity loan is that a personal loan is typically unsecured. That means your house isn’t at risk. The downside is they tend to have shorter terms and higher interest rates than home equity products.
Installation factors to keep in mind
Before installing solar panels, consider the following five factors to avoid any potential surprises throughout the process and to determine if solar is right for you.
Are you a renter? Renters have less decision-making ability when it comes to changing the property. Community solar programs allow renters to subscribe and power their homes with solar from nearby panels. Check with your landlord to explore available options.
Do you have an HOA? Neighborhood and home owners associations in Hawaii can’t prohibit solar panels but may have guidelines for solar placement. Check with your association for details.
Does your insurance cover solar panels? Confirm with your homeowner’s insurance agency to ensure your policy has solar panel coverage.
What is your roof’s condition? Solar installers may require roof maintenance after completing an inspection. According to the Department of Energy, solar panels perform best on roofs with a 15- to 40-degree slope that faces south.
Is your home shaded? Solar panels still work when shaded by trees and buildings but perform best in direct sunlight for at least 4 hours a day. Consider the location of your home and how much direct sunlight your roof receives.
How we evaluate solar companies
The companies we listed above as “the best” are curated from CNET’s best solar companies list. Companies making the best list are scored on the equipment, warranties and customer service they offer. Then, we make sure these recommendations are available in your state. You can read a full breakdown of how we review solar companies here.
Companies listed under the local installers were chosen in a less rigorous way. We chose them because they offered something unique or notable to customers in the state, they seemed well-regarded by internet reviewers or because they were one of the few installers we could find information on in the state.
Whether we’ve completed a full review on a company or not, it’s always a good idea to get multiple quotes from different installers before choosing a company.
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Hawaii solar panel FAQs
Are solar panels worth it in Hawaii?
Yes. Solar panels are a worthwhile investment due to the high electricity rates in Hawaii. Investing in a solar panel system that covers your home’s energy needs can significantly reduce energy costs, especially once the system is paid off.
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Why is electricity in Hawaii expensive?
Electricity in Hawaii is expensive because the state has few coal and oil resources, which are often used to generate electricity. Therefore, Hawaii must import resources which adds to the total cost. Powering your home with solar energy could save you money over time.
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Are solar panels good for the environment?
Yes. Renewable energy sources, like solar power, are more sustainable and emit fewer carbon emissions than fossil fuels like coal or gas. While the manufacturing process of solar panels has an impact on the environment, the process of converting solar energy into electricity doesn’t produce greenhouse gases.
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Read the full article here