Here in Hawaii, we are blessed by the power of the sun. We have one of the most powerful sun exposures in the entire country.
However, most of our energy is imported barrels of oil. In order to harvest this energy, we must burn the oil in our energy plants. As a result, we have the most expensive energy in the country. Having our energy imported to the island not only makes our lives more expensive, but this also hurts our precious environment.
Hawaii legislators have recently provided us incentives to switch our household’s energy source to solar thermal (solar hot water) and solar photovoltaic (solar electric) energy.
Under new Hawaii legislation, most newly built homes or businesses must get a solar water heater in order to obtain a building permit.
Net Energy Metering – HECO
The entire state of Hawaii is net metered. This means that when your photovoltaic solar system produces excess energy (such as during the day while you’re at work), the utility keeps track of any excess. This excess energy is then credited to your account. In a sense, you are able to “sell” the energy you produce back to the utility company.
Hawaii Solar Rebates and Incentives
Solar Cash Rebates
- $750 for residential solar hot water systems installed in the HECO, MECO or HELCO.
- Commercial customers receive $125 per deferred kW, plus $.05/kWh for retrofits and $.06/kWh for new construction.
- For Kaua’i Island Utility Cooperative, residential rebate is $800; Commercial is 50% – 80% of equipment costs.
Hawaii Solar Hot Water (Thermal) State Tax Credits
- Multi-family residential property is eligible for a credit of 35% of the actual cost.
- Commercial property is eligible for a credit of 35% of the actual cost or $250,000, whichever is less.
Hawaii Solar Photovoltaic (“PV” or “solar electric”) State Tax Credits
For Solar PV systems, the maximum allowable state tax credits are as follows:
- Single family residential property is eligible for a credit of 35% of the actual cost or $5,000, whichever is less;
- Multi-family residential property is eligible for a credit of 35% of the actual cost or $3,50 per unit, whichever is less; and
- Commercial property is eligible for a credit of 35% of the actual cost or $500,000, whichever is less.
- Your tax credit for solar PV systems can be “refundable” (cash back from Hawaii!) if you meet certain conditions.
Cost example of an average 5kW PV Residential system with 120/month average bill.
Before State and Federal an average 5kW (5000 watt) PV system will run:
- $35,000, assuming a $7/watt installed price (5000 watts x $7/watt.)
- Subtract $5,000 for the State tax credit
- Subtract another $10,500 for your 30% Federal Tax credit. (Since the Hawaii solar tax credit is not a cash rebate, this can be calculated off the gross price.)
- Subtract Feed-in Tariff production incentive (To be Determined)
- Not including the Feed-in Tariff, your net cost is $19,500.
- Not including the Feed-in Tariff, your payback is 13.9 years, but this will be substantially lower with the Feed-in cash payments.
- Not including the Feed-in Tariff, your former $120/average monthly bill is now an average of $22.16/month with solar.
Obviously, as soon as the Feed-in Tariff is set, all of these estimates will go down. Also, keep in mind that a 5kW system is just an example. Your energy usage may be substantially higher or much lower. Commercial solar power is becoming more accessible.
Example of Hawaii Residential Solar Water Heater Install:
|Cost of solar water heating system||$5,750.00|
|Less Instant Hawaii Energy Rebate||-$750.00|
|Customer Payment to the Contractor||$5,000|
|Federal Tax Credit (30%)($5,000 X 30%)||-$1,500.00|
|Hawaii State Tax Rebate (35%)($5,000 x 35%)||-$1,750.00|
|NET SYSTEM COST TO CUSTOMER||$1,750.00|
Hawaii Feed-in Tariff
Hawaii is one of the few states now offering a cash Feed-in Tariff. This is when the utility has to pay you money for every kWh of solar energy your system produces. Become an Eco Friendly resident or Eco Friendly business in Honolulu. Ask us how!
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