Hawaii Solar Incentives, Tax Credits & Rebates Guide (2026)

Hawaii State Solar Incentives

Hawaii offers multiple incentive programs that further reduce the cost of going solar. The primary state-level benefit is Property tax exemption + energy rebates.

Local Utility Rebates

Hawaii utilities offer various rebate programs that can reduce your upfront costs by an additional $0.10-$0.50 per watt. These programs vary by utility and may have limited funding that runs out during the year.

Common Hawaii utility companies with solar rebate programs include major providers in your area. Your installer can help you identify and apply for any utility rebates you qualify for.

Net Metering in Hawaii

Net metering is one of the most valuable ongoing benefits for solar owners in Hawaii. It allows you to send excess electricity your panels produce back to the grid in exchange for credits on your utility bill.

How net metering works:

• During sunny days, your panels often produce more electricity than your home uses—this excess flows back to the grid
• Your meter literally runs backward, crediting your account
• At night or on cloudy days when your panels produce less, you draw from the grid using your banked credits
• This effectively uses the grid as a free battery, maximizing your solar investment

Net metering in Hawaii:

Hawaii has favorable net metering policies. Most utilities in the state credit you at or near the full retail rate for excess electricity—meaning every kilowatt-hour you send to the grid offsets a kilowatt-hour you would otherwise buy at full price.

For a typical 8 kW system in Hawaii, net metering increases your annual savings by approximately $992-$1,654 compared to a scenario without net metering.

Maximizing Incentives with Smart Financing

How you finance your solar system determines which incentives you can claim. The 30% federal tax credit no longer applies to any system you own—whether paid for in cash or with a solar loan. It remains available only through a lease or PPA, where the provider claims it, not you.

Cash Purchase

Paying cash means you own the system outright from day one and qualify for any state or local programs Hawaii offers—but not the 30% federal credit, which no longer applies to purchased systems.

• Pros: Highest lifetime savings, no interest charges, immediate ownership
• Cons: Requires significant upfront capital ($24k-$31k for most systems); no federal tax credit

Solar Loans

Solar loans let you own the system while spreading payments over 5-25 years. Because you own the system just as with a cash purchase, the federal tax credit does not apply, though you may still qualify for state or local programs. Many Hawaii home buyers find their loan payment is equal to or less than their previous electric bill, meaning they save money from month one.

• Pros: No upfront cost, builds home equity, may qualify for state incentives
• Cons: Interest charges reduce overall savings; no federal tax credit since you own the system

Solar Leases and PPAs

With a lease or Power Purchase Agreement, you don't own the system—a solar company does. That company claims the 30% federal tax credit under Section 48E and typically passes some of that value to you through a lower monthly payment or discounted electricity rate. This is currently the only way a residential customer benefits from the 30% federal credit, since it no longer applies to systems you own.

• Pros: $0 down, no maintenance responsibility, predictable costs, indirect access to the federal credit via the provider
• Cons: You don't own the system, lower lifetime savings, may complicate home sales

Ownership (cash or loan) still tends to deliver better long-term value than leasing in most cases—not because of the federal credit, which no longer applies either way, but because you keep 100% of the electricity savings and any home value increase instead of sharing them with a third-party owner. Run the numbers for your specific situation, since local electricity rates and lease terms vary.

Future Changes to Solar Incentives

Solar incentives have evolved significantly over the past decade, and they'll continue to change:

State Policy Changes

Hawaii solar policies can change over time. Net metering rates, state tax credits, and utility rebate programs are all subject to legislative and regulatory changes.

The good news: most policy changes include grandfather clauses that protect existing solar owners. Installing now typically locks you into current favorable rates and policies, even if they become less generous for future installations.

The Bottom Line on Timing

The 30% federal tax credit for purchased systems expired after 2025, and it's unclear whether it will return. What remains in Hawaii is a state incentive program and favorable net metering, which still make solar a reasonable investment for many homeowners—just without the federal boost that used to apply to purchases.

Solar Loan vs Lease vs PPA: Quick Comparison