Solar in Hawaii: The Highest Electricity Rates in America
Hawaiian homeowners pay roughly 42–47 cents/kWh — more than double the US average of 17–19 cents/kWh. That extraordinary rate, combined with a still-active 35% state tax credit and ~5.5–6 peak sun hours/day, makes Hawaii one of the most compelling solar markets in the country.
Why Hawaii Electricity Costs So Much
Hawaii is the only US state with no connection to the mainland power grid. Historically, most electricity has been generated by burning imported petroleum shipped to the islands — an expensive and volatile fuel source. The result: residential rates of roughly 42–47 cents/kWh statewide, compared to a national average of around 17–19 cents/kWh. This changes solar math dramatically. A kilowatt-hour you generate and use yourself is worth far more in Hawaii than anywhere else in the country, compressing payback timelines substantially.
Federal Residential Solar Tax Credit (Section 25D)
This credit expired December 31, 2025 and is not available for systems installed in 2026 or later.
The 30% Residential Clean Energy Credit (Section 25D) applied to solar and battery storage systems placed in service through December 31, 2025. Systems installed in 2026 or later do not qualify. Many online calculators and contractor quotes still include this credit — be sure any estimate you receive reflects current law. The commercial Investment Tax Credit (ITC, Section 48) has different rules and may still apply to certain business or commercial installations.
Hawaii's State Solar Tax Credit (RETITC) — Still Active in 2026
While the federal 30% residential solar credit has expired, Hawaii's own credit is still available — and it's one of the most generous remaining state solar incentives in the US.
Standard Credit
35% of system cost, capped at $5,000 per system. Claimed on Hawaii Form N-342. If your state tax liability is less than the full credit, carry it forward for up to 5 additional tax years.
Refundable Option
Homeowners with low tax liability can elect a refundable version instead — the state issues a direct payment, but at a reduced value (roughly 30% less than the standard credit, effectively ~24.5% of system cost rather than 35%). Useful if you don't expect sufficient state tax liability.
Confirm current credit rules and eligibility with the Hawaii Department of Taxation (tax.hawaii.gov, Form N-342) before filing.
Net Metering and Export Programs for New 2026 Customers
Original NEM is Closed to New Applicants
Hawaii's original 1:1 retail-rate Net Energy Metering (NEM) program and NEM Plus have been closed to new enrollees for several years. Customers already grandfathered into NEM or NEM Plus are NOT required to transition off and keep their existing terms. Anyone installing solar for the first time in 2026, however, is not eligible for these programs.
Smart Renewable Energy (SRE) Export — Current Program for New Customers
Hawaiian Electric (which serves Oahu, Maui, Hawaii Island/Big Island, Molokai, and Lanai) now enrolls new solar customers in the Smart Renewable Energy (SRE) Export program. Earlier programs — Customer Grid-Supply (CGS), CGS Plus, and Smart Export — are all closed to new applicants. Under SRE Export:
- You receive a bill credit for electricity you export to the grid
- No project size limit; all renewable technologies qualify
- An advanced (smart) meter is required
- Export credit rates are reviewed and updated roughly every 3 years and vary by island
Do not assume a specific export rate. Historically, SRE Export rates have ranged very roughly from about 10 cents/kWh to over 20 cents/kWh depending on the island and program vintage — but the current rate for your specific island is what matters for your savings estimate. Check Hawaiian Electric's current published SRE Export rate sheet at hawaiianelectric.com before modeling your system economics.
Already on CGS, CGS Plus, or Smart Export?
Customers currently on these older Hawaiian Electric programs must transition onto the Smart Renewable Energy (SRE) Export program no later than 7 years after their original program agreement date. At transition, they receive whatever the current SRE Export rate is for their island at that time. If this applies to you, factor this future rate change into your long-term savings projections.
Battery Storage Is Unusually Important in Hawaii
Because SRE Export credit rates are well below Hawaii's retail electricity rate of 42–47 cents/kWh, every kilowatt-hour you export to the grid earns substantially less than one you consume directly. Maximizing self-consumption — using solar power yourself rather than sending it to the utility — is unusually important for Hawaii homeowners' savings.
For this reason, pairing solar with a home battery (such as a Tesla Powerwall or similar) is widely recommended by local Hawaii installers. Stored excess solar can be drawn on in evenings and on cloudy days, keeping more of your energy value at the 42–47 cent rate rather than the export rate. Home battery systems also qualify for Hawaii's 35% RETITC state tax credit.
Property Tax Exemption
Hawaii counties generally exempt the added home value from a solar energy system from property taxes. Each of Hawaii's four counties (Hawaii County, Honolulu, Kauai County, and Maui County) administers its own exemption, so confirm the specific terms and application process with your county property tax office.
Hawaii Solar Incentives Summary (2026)
| Incentive | Status | Notes |
|---|---|---|
| State RETITC (35% / $5,000 max) | Active 2026 | Carryforward up to 5 years, or refundable at ~24.5% of cost |
| Federal 30% Tax Credit (Section 25D) | Expired Dec 31, 2025 | Not available for 2026+ installations |
| SRE Export (Hawaiian Electric) | Open to new customers | Rate varies by island; verify current rate at hawaiianelectric.com |
| Legacy NEM / NEM Plus | Closed to new applicants | Grandfathered customers keep their terms |
| Property Tax Exemption | County-level | Verify terms with your county assessor |
Frequently Asked Questions — Solar in Hawaii
Frequently Asked Questions
Everything you need to know about solar incentives, costs, and savings.
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