What solar incentives are still available in Hawaii in 2026

Hawaii has the highest electricity rates in the country, so going solar has always been an easy financial case to make. For more than a decade, the federal 30% investment tax credit sweetened that case even further, often cutting $5,000 or more off the cost of a typical home system.

That credit ended on December 31, 2025. New residential installations in 2026 no longer qualify for it. What is left is a set of state and county programs that are smaller but still meaningful, led by Hawaii’s 35% Renewable Energy Technologies Income Tax Credit.

Here is an honest look at what is still on the table in 2026, what each incentive is actually worth, and who benefits most under the new rules.

Why solar still pencils out in Hawaii

Even with the federal credit gone, the fundamentals here are unusually strong. Hawaii averages around 40 cents per kilowatt hour, roughly three times the national average, and most of the islands see 240 to 300 sunny days a year.

A typical 5 to 6 kilowatt system runs about $15,000 to $18,000 installed. After state incentives and the electricity you offset, most homeowners cut their monthly bill by 50 to 100 percent and reach payback in roughly six to ten years.

One caveat: the rules vary by island. HECO, MECO and KIUC each handle interconnection and export credits differently, so how much your excess production is worth depends on where you live. Confirm your utility’s current export program before you sign anything.

The federal ITC ended after 2025

The 30% federal credit typically covered $4,500 to $5,500 on a 5 to 6 kilowatt system. Homeowners who started installation before 2026 could still claim it on their return.

For everyone installing new in 2026, that discount is gone. The practical effect is a higher net system cost and a payback period that stretches by roughly two years. It does not break the case for solar in Hawaii, but it does mean the biggest discounts are behind us and that sizing your system correctly matters more than ever.

Hawaii solar incentives still available in 2026

Renewable Energy Technologies Income Tax Credit (RETITC)

The state credit covers 35% of your installed system cost, capped at $5,000 per system for residential solar PV. It is available to Hawaii taxpayers who own their system, claimed on your state return, and unused portions can be carried forward for up to five years. For most homeowners this is the single largest remaining incentive.

Honolulu property tax exemption

If your home is on Oahu, you may qualify for a 25-year exemption on the added assessed value your solar system creates. In other words, your panels raise your home’s value without raising your property tax bill. It requires filing the appropriate form with the City and County of Honolulu.

GEMS on-bill financing

Hawaii’s Green Energy Money Saver program offers financing at roughly 5.5% interest for terms up to 20 years, often without a traditional credit check. It is aimed at low and moderate income households and repayment happens through your utility bill, which makes it one of the few paths to solar with no meaningful upfront cost.

Utility and county programs

Some programs have closed. HECO’s Battery Bonus, which paid $850 per kilowatt of committed capacity, is no longer accepting new applicants and has been replaced by Bring Your Own Device Plus. Kauai still offers solar water heater rebates and loans through KIUC, and community solar subscriptions are available in limited service areas.

Export compensation now runs through Smart Export and similar programs rather than full retail net metering, which is exactly why battery storage has become the centerpiece of most new system designs.

What the numbers look like in 2026

Take a 5.5 kilowatt system at $16,500 installed. Apply the RETITC at 35%, capped at $5,000, and your net cost lands near $11,500.

At Hawaii’s average 40 cents per kilowatt hour, that system offsets roughly $2,100 of electricity a year for a typical household. That puts simple payback around eight years, after which the production is effectively free for the remaining 17-plus years of panel warranty coverage.

Who should install in 2026

Solar still makes strong sense if you plan to stay in your home 10 years or more, you have above-average electricity usage, and you have enough Hawaii state tax liability to actually use the RETITC. Adding a battery makes even more sense now that export credits are reduced, since storage lets you consume your own midday production at night.

It may not be the right move if you expect to move within a few years, have little or no state tax liability, or rent your home. In those cases a lease or PPA, or straightforward efficiency upgrades, may serve you better.

Before you sign

Get at least three written quotes. Confirm your RETITC eligibility with your tax preparer. Check your roof’s remaining life, because replacing a roof under existing panels is expensive. Ask your installer to model a 25-year cash flow using your actual utility rate, not a national average. And ask what happens after installation, because a system that is never cleaned or monitored quietly loses production every year.

Independent Energy Hawaii has installed over 20,000 panels across 500-plus Hawaii homes and holds a 300-plus review Google rating. If you want a straight answer on what solar costs and returns for your specific home in 2026, we are happy to walk you through it.