Hawaii Solar Incentives, Tax Credits & Policies (2026)
Written by Aditya Patil · Last updated 2026-09-24
Hawaii consistently pays some of the highest electricity rates in the nation, making solar incredibly attractive. While traditional net metering has ended on most islands, strong state tax credits and battery programs continue to make the investment worthwhile.
$254
Avg. monthly bill
52.72¢/kWh
Avg. rate
35%
State Tax Credit
Capped at $5,000
482.3 kWh
Avg. monthly usage
Cost of solar in Hawaii
While we don't have robust enough median price data from LBNL's latest Tracking the Sun report to provide a definitive average cost per watt specifically for Hawaii, island installations frequently price higher than the mainland due to shipping costs, supply chain constraints, and labor market differences.
Despite higher installation costs, the financial case remains exceptionally strong. An average Hawaii household uses about 482.3 kWh per month (5,788 kWh/year). At the staggeringly high state average electricity rate of 52.72¢/kWh, that amounts to an average electric bill of $254. Over 25 years, a typical Hawaii homeowner will spend upwards of $75,000 on electricity if they do nothing — and that's assuming utility rates never rise.
To get an accurate estimate of what an installation will cost for your specific roof, we highly recommend getting several local quotes to compare.
Hawaii Solar Incentives & Tax Credits
| Program | Amount | Status |
|---|---|---|
| Renewable Energy Technologies Income Tax Credit (RETITC) | 35% of the actual system cost, capped at $5,000 per system for solar photovoltaic systems on single-family residential property (secondary sources citing the official Form N-342 instructions put the cap at $2,250 per system for other/multi-family and commercial solar PV installations; not independently confirmed against a readable primary PDF in this research). Unused credit can be carried forward, and is refundable in some cases, under HRS 235-12.5. Note: Act 24 (signed May 21, 2026) will add a statewide annual aggregate cap of $40 million on total RETITC claims starting with systems placed in service in 2027; Executive Order 26-02 (Governor Green, June 2026) confirmed that systems placed in service during calendar year 2026 are NOT subject to this new cap, provided the taxpayer can show it reasonably relied on the credit before Act 24 was signed. | open |
In addition to the state-level Renewable Energy Technologies Income Tax Credit (RETITC), Hawaii residents who purchase their systems with cash or a loan are also eligible for the federal residential clean energy credit, which covers 30% of the gross cost (before applying the state credit) for systems installed before the end of 2032. (Remember that if you sign a solar lease or PPA, the leasing company claims the tax credits, not you).
Net metering and export rules
Because Hawaii's grid absorbed so much early rooftop solar, the state transitioned away from traditional 1:1 net metering much earlier than the rest of the country. Hawaiian Electric (HECO) closed its original Net Energy Metering program in 2015.
Today, new HECO solar customers interconnect under the Smart Renewable Energy (SRE) Export Tariff. Instead of a simple one-to-one credit, SRE compensates exported energy at time-varying rates that change depending on the time of day. For example, on Oahu, daytime exports (9 a.m. to 5 p.m.) are credited at around 13.5¢/kWh, while energy sent to the grid during the evening peak (5 p.m. to 9 p.m.) earns a premium at roughly 32.9¢/kWh. Export rates are locked for 7 years from the date of interconnection.
Note: The Kauai Island Utility Cooperative (KIUC) operates entirely separately from HECO and maintains its own Net Energy Metering program (Schedule Q), crediting exported energy at a flat $0.20/kWh.
| Policy | Varies by utility (no single statewide rule) |
| HECO (Oahu, Maui, Hawaii Island) | Smart Renewable Energy (SRE) Export Tariff |
| KIUC (Kauai) | Schedule Q (flat $0.20/kWh export rate) |
| Export rate (HECO Oahu) | Time-varying: ~18.9¢ overnight, 13.5¢ daytime, 32.9¢ evening peak |
| HECO export rate lock-in | 7 years from interconnection date |
On HECO's current Smart Renewable Energy Export (SRE) tariff, Oahu export credits are time-varying: about 18.9 cents/kWh overnight (9 p.m.-9 a.m.), 13.5 cents/kWh daytime (9 a.m.-5 p.m.), and 32.9 cents/kWh evening peak (5 p.m.-9 p.m.). Rates differ by island and are locked for 7 years from the interconnection date; customers transitioning from legacy programs get their rate updated every 3 years. KIUC's separate Net Energy Metering program on Kauai instead credits exported energy at a flat $0.20/kWh under its Schedule Q tariff.
Batteries & Virtual Power Plants (VPPs)
Under the HECO Smart Renewable Energy tariff, standalone solar panels without a battery will waste much of their financial potential. Sending energy to the grid during the day yields a low credit, while buying energy back at night costs the full retail rate (52.72¢/kWh). Adding a battery allows you to store daytime production for evening use, or even export it during the 5 p.m. to 9 p.m. peak window for a higher credit.
Bring Your Own Device Plus (BYOD Plus)
Hawaiian Electric's current battery incentive for customers on Oahu, Maui County, and Hawaii Island who pair a new battery with new or existing rooftop solar. Pays a one-time upfront incentive of $400 per kW of capacity committed with no maximum cap, plus an additional $400/kW low-to-moderate-income adder for qualifying households, plus an ongoing monthly export bill credit (at the customer's retail billing rate) for energy the battery sends to the grid during a customer-selected 2-hour daily dispatch window. Requires new (not previously incentivized) batteries and a 5-year program commitment; ending early requires a prorated repayment of the upfront incentive. It replaced the earlier Battery Bonus program, which is closed to new participants after hitting its capacity cap on Oahu.
Power Partnership Programs
Hawaiian Electric's virtual-power-plant program on Oahu, Maui County, and Hawaii Island. Independent 'Power Partner' companies enroll customer-owned batteries, solar-plus-battery systems, and grid-interactive (smart-controlled) electric water heaters, then dispatch those devices to help balance the grid; customers get monthly bill credits in return. It runs alongside, and is compatible with, the separate Bring Your Own Device Plus battery incentive.
Top utilities
| Utility | Residential rate | Customers |
|---|---|---|
| Hawaiian Electric Co Inc | 42.87¢/kWh | 276,206 |
| Hawaii Electric Light Co Inc | 48.31¢/kWh | 78,386 |
| Maui Electric Co Ltd | 43.96¢/kWh | 61,811 |
Residential rate and customer counts are from EIA-861 (see Data sources below).
Estimate your own numbers
Use our solar calculator to get a customized estimate based on your specific electricity usage and local utility rates.
FAQ
Does Hawaii still have 1:1 net metering?
For new customers on Hawaiian Electric (HECO), no. Traditional 1:1 Net Energy Metering was closed in 2015. Instead, new customers use the Smart Renewable Energy (SRE) Export Tariff, which pays a time-varying rate that encourages sending power to the grid during the evening peak rather than the middle of the day. Kauai (KIUC) still offers a flat export credit program.
How much is the Hawaii state solar tax credit?
The Renewable Energy Technologies Income Tax Credit (RETITC) covers 35% of your actual system cost, capped at $5,000 for single-family residential properties. It can be carried forward if you can't use it all in one year, and in some cases, it may be refundable. An annual aggregate cap on the program will take effect in 2027.
Should I get a battery if I install solar in Hawaii?
Yes, in almost all cases. Because daytime export rates on HECO's network are lower than evening peak rates (and much lower than your retail electricity rate of 52.72¢/kWh), storing your own midday solar power to use at night provides the best financial return. Plus, HECO's "Bring Your Own Device Plus" program pays a substantial upfront incentive to add a battery.
Data sources
Last updated 2026-09-24
- U.S. Energy Information Administration — Electricity Data Browser — accessed 2026-09-24
- NREL PVWatts — accessed 2026-09-24
- NREL Solar Resource Data — accessed 2026-09-24
- LBNL Tracking the Sun (public data file, host-owned residential systems) — accessed 2026-09-24
Written by Aditya Patil