Hawaii has a great interest in solar power generation to supply its energy needs. By 2021 Hawaii is listed as the 16th state in the Solar Industry National Ranking. This state has over 91,000 certified solar installations and a total installed capacity of 1,413.23 MW. With this capacity, Hawaii can supply 15.80% of its power needs with solar energy, powering up to 353,165 homes.
The Hawaiian solar industry exponentially grew in the last 5 years due to a 45% decline in costs of solar generation equipment. In the next 5 years, Hawaii plans to increase its solar capacity by 210% to an installed capacity of 2,989.53 MW, supplying 33.42% of its power with solar energy. With the Hawaii Clean Energy Initiative (HCEI), Hawaii plans to become by 2045 the first state supplying 100% of its power needs with solar and other renewable energies.
What you should know about Solar Energy in Hawaii
The electrical grid of Hawaii is operated by four investor-owned electric utilities: KIUK, HECO, MECO, and HELCO. While there are technically four utilities, MECO and HELCO are subsidiaries of HECO and the three of them are commonly known as the Hawaiian Electric Companies, supplying power to 95% of the population in the state. KIUK only operates the electrical grid in Kauai, a Hawaiian Island.
Neither Niihau nor Kahoolawe islands have electric utilities supplying them with electricity. Niihau, better known as the forbidden island, generates 100% of its consumed power with solar energy. While Kahoolawe has in-island generation combustion plants, it is planned that the island will become 100% powered with solar and other renewable energies.
With an average power cost of $0.3206 (32.06 Cents) per kilowatt-hour consumed, Hawaii has the highest electricity rates in the whole country and they are even 146.42% more expensive than the national average. Considering elevated prices for electricity in Hawaii, homeowners have low per-capita power consumption rates, which is why they consume on average 525 kilowatt-hours per month.
It is no surprise that even though Hawaiian homeowners have the lowest consumption rate in the whole country, they pay the most expensive bills. On average, Hawaiian homeowners pay electricity bills of $168 per month, which is 45.64% more than the average national monthly electricity bill.
Elevated costs for electricity in Hawaii can be attributed to the incredibly high costs for the electrical grid infrastructure and the price for oil in combustion engine power plants. This is why Hawaiian homeowners and the state itself are looking into solar energy as one of their prime alternatives for energy generation.
Is it worth going solar in Hawaii?
Going solar in Hawaii might be more attractive and profitable than in most states of the country. Since this is a state with the highest electricity rates and the most expensive electrical bills, going solar is entirely worth it. With the HCEI, Hawaii plans to become a state 100% powered with solar power and other forms of renewable energies.
Hawaii has average electricity rates of 32.06 ¢/kWh, these rates are 167% or higher than those in states like California, Wyoming, Montana, Texas, and even the whole West South Central region. With such high rates, it is understandable that Hawaii homeowners pay on average $168 in electricity monthly bills (up to $2,017 a year), even when they consume 40% less power than the national average.
Considering the average per-capita consumption rate of 6,300 kWh a year, a solar rooftop generation system of 4.5 kW DC is the perfect fit for any Hawaiian homeowner. This Photovoltaic (PV) system can generate an average of 6,408 kWh per year in Hawaii, more than enough to offset 100% of your electrical bill
Hawaii has very low prices for solar energy, just $2.79 per watt installed. This is why the 4.5 kW DC PV system costs $12.555 before solar incentives. After the Federal Tax Solar Incentive that reduces 26% of the overall cost of the solar system, the price for the 4.5 kW DC PV system falls to $9,290. With solar prices, this low, the 4.5 kW DC PV system in Hawaii has a really small payback period of just 4.6 years.
Since PV systems have an average lifespan of 25 years, the 4.5 kW DC PV will have returned its investment after nearly 5 years and grant you 20 more years of free solar energy. This means that the PV system will save you an average of $50,436 during its lifespan, which is $41,155.78 more than you paid for the solar generation system in the first place, quite the financial incentive for going solar.
If you want to go solar in Hawaii, we recommend you do it as soon as possible. The Federal Tax Solar Incentive reducing 26% of the overall cost of your PV system, will be reduced to 22% by 2023 and dropped out by 2024. This is why going solar by 2021 or 2022 will ensure a better price for your solar system.
How much energy will your solar system generate?
Hawaii is an excellent state to go solar considering how sunny it is throughout the year. According to the NREL database, Hawaii receives radiation levels that go between 4.2 – 6 kWh by a square meter per day. These stable levels of radiation allow for PV systems to have similar outputs every month and ensure the right amount of power supplied for Hawaiian homes.
Radiation levels in Hawaii can be translated as 4 – 6 full hours of solar power generation by your PV system at full power and high efficiency. With these radiation levels, you can generate between 6,200 – 6,600 kWh per year with a 4.5 kW DC PV system and offset almost 100% of your electrical bills assuming nearly south facing arrays.
If you are worried about months with lower power generation and Hawaii not having a Net Metering (NEM) program, the state has the Distributed Generation Tariffs program. We will dive later into this solar incentive, but just so you know, it works as a NEM program with extra conditions and allows you to offset monthly bills with the excess power generation from previous months.
With great levels of yearly solar power generation and considering radiation levels in Hawaii and monthly bills of $168, having a PV system in this state can grant you excellent yearly savings. A 4.5 kW DC rooftop solar generation system offsetting 100% of your monthly electrical bills, can save you more than $2,000 in average yearly savings on electricity.
Payment options for your PV system in Hawaii
Hawaii allows homeowners to choose from a diverse portfolio of payment options when acquiring a PV system for their homes. So you can know which options you can pick when going solar, we will break down each of the payment options that ensure you can power your home with solar energy.
- Solar purchase/cash: Buying a PV system in Hawaii with cash is the most simple and straightforward method to acquire a solar system. This way you are eligible for all solar incentives and fully own your solar generation system.
- Solar loan: If you want to finance your PV system, you can always ask for a solar loan. There are several options like the FHA PowerSaver Loan Program that sets interest rates of 4.99 – 9.99%, the GreenSun Hawaii loan that varies its terms by the lender, and the City and County of Honolulu – Solar Loan Program that grants you a 20-year payment tops with a 0% interest rate.
- Solar leasing: A solar leasing is a simple way to enjoy solar energy without up-front payments. This payment option allows you to lease a solar generation system from a solar lessor at a fixed rate for the panels. The only thing is that you are not eligible for solar incentives since you do not own the PV system.
- Solar Power Purchase Agreement (Solar PPA): The Solar PPA is another option to use solar energy without fully paying for solar panels. When choosing this option, a solar company installs a PV system at your rooftop and you only pay them for the power you consume at a fixed rate lower than your Hawaiian electric utility rates, which is quite the discount.
What are the solar incentives in Hawaii?
To ensure that Hawaii achieves its 100% renewable portfolio standards by 2045, there are several active federal and local solar incentives providing homeowners with interesting benefits when going solar. So you can fully understand them, we will break down each of the incentives in the state.
Federal Tax Solar Incentive or Residential Renewable Energy Tax Credit
The Residential Renewable Energy Tax Credit formerly known as the Federal Solar Investment Tax Credit (ITC) is the most popular and financially attractive incentive. With this incentive, homeowners in Hawaii receive a 26% dollar-for-dollar reduction over the whole cost of their PV system (including installation) against their federal income tax liability.
If the incentive amount surpasses your federal tax liability, you can rollover forward the resting amount for the next tax year. This incentive will be reduced to 22% by 2023 and dropped out entirely by 2024.
Renewable Energy Technologies Income Tax Credit (RETITC)
The Renewable Energy Technologies Income Tax Credit is also known as the Solar and Wind Energy Credit, is a solar incentive allowing homeowners to claim an income tax of 35% over the whole cost of their PV system or $2,250 (whichever is less).
Honolulu Solar Property Tax Exemption
Renovations and improvements in homes usually result in an increase in property value and therefore an increase in property taxes. With the Honolulu Real Property Tax Exemption for Alternative Energy Improvements, homeowners in Honolulu can enjoy a 100% property tax exemption for the added value of solar energy improvements for the home in 25 years.
Distributed Generation Tariffs (former Hawaii Net Metering Program)
As promised, it is time to explain the program that replaced the former NEM program. In 2015, the Hawaii Public Utilities Commission (PUC) pulled out of the Net Metering Program, in its place they established the Distributed Generation Tariffs program. This program divides among the Smart Export and the Customer Grid Supply Plus.
Customer Grid Supply (CGS) Plus
The CGS Plus Tariff allows homeowners to sell their excess solar-generated power to the state electrical grid and get credits in return. Every credit will be used in the next monthly bill, if there are remaining credits from previous months, they will be forfeited. The rate of each credit varies from island to island. HECO, MECO, and HELCO allow for systems up to 100 kW in output while KIUC allows for 50 kW systems.
The Smart Export Program expects homeowners to charge their home batteries with excess power generated by their PV systems during daylight hours. At the evening, night, and early morning hours, the power in the batteries will be supplied to the grid and homeowners will receive credits with rates varying depending on the island.
Best Solar Companies in Hawaii: Our top choices
Choosing the right solar company is an important decision. They provide your solar equipment, install it, perform roofing maintenance, and provide you with the respective warranty. To ensure you pick among the best solar companies, we made a list of our top choices providing service within Hawaii. To select each company we used the following criteria.
- The reputation of each company and level of client satisfaction with the results – We looked into certified reviews to ensure the companies have a good reputation and the former clients feel satisfied with the results in their PV systems.
- Quality and quantity of performed solar projects – To ensure the companies have experience with solar installations, we looked into how many projects they performed and the overall results in the installed systems.
- Product brands and their quality – We consider the brands and quality of each of the products used by the company at the moment of offering PV systems for their clients.
- Partnerships and certifications – The best companies have certifications to install quality products and partnerships with the best solar manufacturers.
- Warranty time, coverage, and policies – Each company must be liable for their performed work, which is why we deeply looked into the warranty offered for each of them.
ProSolar Hawaii is one of the best solar installers in the state, offering services in the area of Hawaii, Big Island, Kailua-Kona, and Hilo. This company offers custom-sized PV systems that perfectly adapt to each one of the power needs of the homeowners.
The company provides installations, repairs, and maintenance of PV systems coupled with excellent energy storage systems. ProSolar Hawaii works side by side with some of the best solar products on the market from brands like Enphase Energy, Q Cells, SolarEdge, Panasonic, JinKo Solar, Solaria, SimpliPhi Power, ABB, PowerOne, Hyundai, Schneider Electric, and LG.
Pacific Energy, LLC is one of the best solar installers providing services on the island of Maui. The company works side by side with the Hawaiian electric utility of MECO and the customer to achieve the best outcome and achieve the desired result for the rooftop solar generation system.
This company provides PV system installations with every product you might need and they have a customer-service focus, providing you with every information might need. Pacific Energy, LLC performs solar installations with quality solar panels from Sunpower, microinverters, and monitoring systems by SolarEdge and the Tesla Powerwall for the backup battery system.
Established in 2010, RevoluSun has been one of the most reliable and long-lasting solar companies in the state. This locally owned and operated company has one of the best reputations in Hawaii, being awarded several times by solar magazines and even the Hawaiian state itself, due to its outstanding work and quality of service.
The RevoluSun idea focuses on the Smart Homes for solar installations using the best and latest technology in the solar market and working side-by-side with each client to ensure they acquire exactly what they want. To set up quality PV systems, RevoluSun installs products from brands like SunPower, Silfab, LG, Solaria, SolarEdge, and Tesla.
Haleakala Solar & Roofing is one of the oldest and most reliable solar installers in the state of Hawaii. The company was established in 1977 and has performed over certified 14,000 in the state. They have local offices in Oahu and Maui, but they offer solar services in the whole state.
Haleakala Solar & Roofing provides the classical PV system installations, repair & maintenance service, and they also have the Professionally Managed Systems program, where they regularly monitor and check up your solar system. They also provide solar installations with quality brands, adapting each option depending on the custom-size system that the client requires.
ProVision Solar is a well-experienced premier solar installer established in Hawaii in 1998. This company focuses on teaching its customers about solar energy and designing specific premier systems that are affordable and perfectly suited for the power needs of the client, looking to optimize the energy usage of the PV system.
ProVision Solar offers PV systems installations, repair & maintenance of panels, and installations of backup energy storage systems. When going solar with this company, you might choose quality solar products from brands like Q Cells, SunPower, Enphase, SolarEdge, and Tesla.
Established in 1986, Rising Sun Solar Electric LLC is one of the largest solar installers in the state of Hawaii. The company has over 34 years of experience, has served more than 5,000 clients, and installed around 30 MW up to date. The company currently has offices in Maui, Big Island, Oahu, and Kauai.
Rising Sun Solar Electric LLC offers a variety of services to its clients, including PV systems installations, repair & maintenance of solar panels, and installation of solar battery systems. This company attempts to work with the best quality products, which is why they only installed SunPower solar panels for the generation part of the system and the Tesla Powerwall for the energy backup system.
Established in 2011, Vivint Solar is one of the largest solar installers in the US that offers services in many states including Hawaii. This company provides quality installations with excellent outcomes for customers and has received many awards granted in the solar industry. Vivint Solar has offices in Oahu, Honolulu, and Maui.
Vivint Solar covers everything for its customers, they provide solar products, perform the installation, maintenance, roofing, and everything you might need for your PV system in Hawaii. When going solar with Vivint Solar, you might choose from a series of quality products manufactured by brands like Enphase Energy, Canadian Solar Inc., SolarEdge Technologies. Trina Solar, Jinko Solar, JA Solar, Q CELLS, and LG.
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