There is trouble in paradise. A balmy climate and stunning natural beauty make Hawaii a veritable Garden of Eden, but not all is perfect in the Aloha State. In particular, retail electricity prices on the islands are tremendously expensive. Fortunately, when it comes to solar energy Hawaii ranks among the best in the nation. This combination of exorbitant electricity costs and abundant solar potential makes the Hawaiian Islands a prime spot for solar energy.
Here’s everything you need to know about Hawaii solar panels.
Hawaii residents pay an average of 32.90 cents per kilowatt-hour for their electricity. That’s well over double the national average of 12.81 cents. The biggest problem is that Hawaii sources most of its energy from petroleum and other fossil fuels. Less than one percent of all U.S. electricity production comes from oil. In Hawaii, however, that figure soars to more than 67 percent. Needless to say, this is a big deal.
The good news is that residents aren’t strictly limited to traditional petroleum-derived energy. Abundant sunshine and a warm, pleasant climate mean Hawaii solar panels offer tons of insolation potential just waiting to be tapped. The state already has well over 200,000 homes powered by solar energy. There are also 65 distinct solar panel installers in Hawaii. Best of all, solar prices have fallen by nearly 50 percent in the last year alone.
So, are solar panels worth in Hawaii? Yes! Let’s take a look at a few ways investing in solar Hawaii is becoming even more affordable.
There are several programs for which owners of Hawaii solar panels may be eligible. These programs are designed to offset the cost of solar panel installation Hawaii, make solar energy generation more cost-effective and help the state reach its renewable energy goals.
Here are the key programs that solar owners need to know:
Smart Export and Customer Grid Supply Plus are available for Hawaiian Electric Co (HECO), Hawaiian Electric Light Co (HELCO) and Maui Electric Co (MECO).
When it was introduced, Hawaii’s net metering program was available to permanent customers who owned solar energy systems producing 100 kilowatt-hours of energy or less. Unfortunately, the net metering program is no longer available to new customers.
Instead, Hawaiian Electric Utility offers the alternative programs listed below for customers who own solar energy systems.
An interim program started by the Hawaii Public Utilities Commission, the Customer Grid-Supply program (CGS) was intended to fulfill a role similar to net metering in other states. Customers could send solar energy back to the grid and receive credits at the standard retail rate. Unlike many net metering programs, however, the credits could not be carried over from month to month.
The original CGS program’s capacity limit was met in November 2017 and is no longer active.
After the CGS program shut down, Hawaii’s utilities commission replaced it with the Customer Grid-Supply Plus program. Like its predecessor, this program allows customers to export energy to the grid from their Hawaii solar panels systems throughout the day. The CGS Plus program requires the installation of equipment used to manage energy output, allowing utility companies to disconnect or control solar systems in the event of a problem with the grid. For energy delivered to the grid customers receive a monthly bill credit. The export credit is fixed through Oct. 20, 2022.
CGS Plus has individual capacity limits set for each utility company and will continue to accept new customers until those limits are reached.
Customers are credited for their electricity at the following rates:
|Island||CGS Plus Credit Rate*|
|Hawaii Island||10.55 cents/kWh|
*Export credits will be trued-up on an annual basis and any remaining credits left over at the end of the year expire with the utility cost reductions benefitting all customers.
Smart Export program is a new option for users with solar and a battery energy storage system. Battery charges from the solar system during the daylight hours between 9 am – 4 pm , and the customers can use the energy in the evening to power their home.
Customers have the option to export energy to the grid from 4 p.m. – 9 a.m. and receive monthly bill credits for it.
Any energy exported to the grid during the peak hours is not compensated. Energy export credits are settled on an annual basis. Excess credits expire at the end of the year. The export credit is fixed through October 22, 2022.
Exports to the grid between 4 p.m and 9 a.m are credited at the rates below:
The Customer Self-Supply system is intended for private rooftop Hawaii solar panels owners who do not intend to export energy to the grid. The CSS program is best for residents who intend to only generate electricity for their own needs and store the rest via an energy storage system. The advantage of the CSS program is that it offers an expedited review and approval process for new installations.
However, the program does require a minimum monthly charge of $25. This is similar to the Standard Interconnection Agreement, which is a program meant for customers who require a larger on-site generation capacity to offset their monthly energy costs.
The bad news when it comes to solar panel installation Hawaii is that the state’s utility companies do not offer any rebates. However, that doesn’t mean there aren’t any ways to save on Hawaii solar panels. In fact, residents who buy solar panels Hawaii may be eligible for a number of the following tax credits, programs and other incentives.
Hawaii offers several options when it comes to solar energy tax credits. In order to qualify for an income tax credit, a solar thermal or photovoltaic system must be new and must meet all relevant performance standards.
Solar thermal water heater systems are eligible for a tax credit of the lesser of $2,250 or 35 percent of the total cost of the system for single-family homes.
Multi-family properties are eligible to claim the lesser of 35 percent or $350 per unit. Commercial properties, meanwhile, may receive a credit of the lesser of $250,000 or 35 percent of the system’s cost.
For photovoltaic or space heating systems, single-family dwellings may claim the lesser of 35 percent of the cost of the system or $5,000.
Commercial solar panel installers in Hawaii may claim the lesser of 35 percent or $500,000.
Though it doesn’t necessarily reduce the cost of purchasing a solar energy system, the Honolulu Solar Loan Program is a great way for low- and moderate-income residents of the City and County of Honolulu to finance a new installation.
Eligible homeowners may receive a zero-interest loan to finance a solar water heater or photovoltaic system through Honolulu’s Rehabilitation Loan Program. The loan program is open to qualifying single-family homeowners and individual condominium residents who have secured approval of their homeowners’ association. As an added bonus, the loan may also be used to complete roof repairs and other work in some cases. Note, however, that loans of more than $10,000 require a mortgage lien.
One of the potential hidden costs of a solar energy installation is property taxes. Residents in Honolulu County can offset these costs thanks to the Honolulu Real Property Tax Exemption for Alternative Energy Improvements.
This program provides homeowners with a 100 percent property tax exemption on qualifying renewable energy installations for 25 years.
This includes solar panels Hawaii, wind power systems and many other renewable energy sources. The bill was originally passed by the Honolulu City Council in September 2009 and went into effect on October 1, 2009.
Hawaii’s Feed-In Tariff Program was a program designed to foster greater adoption of renewable energy sources. The program was open to solar energy systems smaller than five megawatts and offered the ability to feed power to the utility companies at a set rate over 20 years.
However, the FIT program has met its goals and is now closed to new entrants.
Solar power is undoubtedly one of the energy sources of the future. Thanks to its sunny climate and high insolation levels, Hawaii is well-positioned to become a leader in the solar energy field. The Aloha State’s sky-high energy rates only make solar power Hawaii an even more appealing choice for many residents. Best of all, a variety of incentives and tax credits have made solar panels Hawaii more affordable than you might think.