Hawaii state solar tax credit
Hawaii Solar Tax Credit: 2026 vs 2027
Hawaii's solar tax credit is changing. Here is the honest math on what it means for your household, and why the smartest move is this year.
Signing a contract in 2026 does not qualify you.
Your system has to be installed, inspected and operational (placed in service) by December 31, 2026. Permitting and utility approval take time in Hawaii, so the clock below is really a design-and-build clock.
Hawaii state solar tax credit
Going solar in 2026 locks in your full state tax credit. Waiting until 2027 does not.
Under Act 24 as currently written, the Hawaii state solar tax credit (RETITC) faces new limits starting in 2027, including a potential statewide funding cap and income limits, and phases out entirely after 2029. Governor Green's executive order is intended to protect systems placed in service (installed, inspected and operational) by December 31, 2026 from those changes. Even so, the state has signaled that funding for the credit is finite, so the earlier your system is switched on, the better your chance of receiving the full amount. A signed contract alone does not qualify.
Signing in 2026 is not enough. Signing a contract in 2026 does not qualify. Your system has to be installed, inspected and switched on (placed in service) by December 31, 2026.
Why acting now matters: the executive order is intended to shield 2026 installs, but a statewide funding pool for the credit may still be in play this year, and it is claimed on a first come basis as systems are placed in service. Hawaii permitting, utility approval and inspection can take months, so the earliest starts have the strongest shot at the full $5,000.
Placed in service in 2026
Full credit protectedUp to $5,000
35% of system cost, capped at $5,000 per 5kW system
- System must be installed, inspected and operational by December 31, 2026, a signed contract is not enough
- Intended to be protected from the 2027 rule changes under the Governor's executive order
- State funding for the credit is finite, so earlier installs have the best shot at the full amount
- You know your credit up front, at signing
- No certification lottery to wait on
- Income limits may still apply, so higher earners should confirm
Install in 2027
Capped and uncertain~$2,000 to $3,000
Estimated. The actual amount depends on statewide demand and final rules.
- A potential statewide funding cap could split credits across all claims
- Households over $175K income no longer qualify
- You will not know your credit until the following spring
- Residential competes with commercial for the same pool
A typical residential customer could see a swing of $2,000 to $3,000 between installing in 2026 versus 2027.
Why the 2027 number is an estimate, not a promise
Starting in 2027, Act 24 as currently written could impose a statewide funding limit. If total claims exceed that limit, every credit could be reduced proportionally. Recent years have run near $100 million in claims, so here is how the math could land.
| If statewide claims total | A funding limit could cover | Your $5,000 credit becomes |
|---|---|---|
| If demand matches the proposed cap | 100% | $5,000 |
| $65M | ~62% | ~$3,100 |
| $100M (recent average) | ~40% | ~$2,000 |
| $130M (pre-sunset rush) | ~31% | ~$1,550 |
Income note: the Governor's executive order shielded 2026 installs from the 2027 rule changes, but stated it did not cover the income limits. Households over $175K (single) or $350K (joint) should confirm 2026 eligibility with a tax advisor before counting on the credit.
What is actually changing under Act 24
The cap
A potential statewide funding limit from 2027 to 2030, roughly half of recent spending, if implemented as written.
Income limits
Filers over $175K ($350K joint) are disqualified, and this may reach 2026 installs too.
The wait
A new certification process means your credit is not confirmed until spring of the following year.
The sunset
The credit ends after 2029, so 2030 calendar-year installs get nothing.
Lock in your full credit before December 31, 2026
A system has to be installed and commissioned, not just signed, to count for the 2026 credit. Design, permitting, utility approval and inspection all take time in Hawaii, so the earlier you start, the safer your credit. Let's design your system and get it commissioned while the full credit is still protected.
Frequently Asked Questions
What is the Hawaii solar tax credit in 2026?
What changes for the Hawaii solar tax credit in 2027?
How much could I lose by waiting until 2027 to install solar?
Are there income limits on the Hawaii solar tax credit?
When does the Hawaii solar tax credit end?
What does placed in service mean for the 2026 deadline?
Do I still get a federal solar tax credit in 2026?
This information is for general educational purposes and reflects Act 24 and Executive Order 26-02 as understood in 2026. Rules, caps and eligibility are subject to change and final agency guidance. Independent Energy Hawaii is not a tax advisor. Credit amounts and eligibility depend on your specific situation and on total statewide claims, which cannot be predicted in advance. 2027 figures are estimates based on the current draft of Act 24, not guarantees. Please consult a qualified tax professional before making decisions based on expected credits.
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