What you should know about Solar Energy in Hawaii
The electrical grid in Hawaii is operated by four investor-owned electric utilities: KIUK, HECO, MECO, and HELCO. KIUK, HECO, MECO, and HELCO are the largest of these utilities. While there are technically four utilities in the state, MECO and HELCO are subsidiaries of HECO, and the three of them are collectively referred to as the Hawaiian Electric Companies because they provide electricity to 95 percent of the state’s population. The Kauai Electric Utility Company (KIUK) is limited to the operation of the electrical grid on the Hawaiian island of Kauai.
Niihau and Kahoolawe islands do not have electricity distribution systems that provide them with electricity. Niihau, also known as the Forbidden Island, is powered entirely by solar energy, which accounts for 100 percent of its total electricity consumption. While the island of Kahoolawe has combustion plants for on-island generation, it is anticipated that the island will be powered entirely by solar and other renewable energies in the future.
Hawaii has the highest electricity rates in the entire country, with an average cost of $0.3206 (32.06 cents) per kilowatt-hour consumed. In fact, Hawaii’s electricity rates are 146.42 percent higher than the national average. In spite of high electricity prices in Hawaii, homeowners have low per-capita power consumption rates, which explains why they use an average of 525 kilowatt-hours per month on average.
The fact that Hawaiian homeowners have the lowest per capita consumption rate in the entire country and yet they pay the highest utility bills is no surprise, either. Hawaiian homeowners pay an average of $168 per month in electricity bills, which is 45.64 percent more than the national average monthly electricity bill.
Hawaii’s elevated electricity costs can be attributed to the state’s extraordinarily high costs for electrical grid infrastructure as well as the high price of oil used in the state’s combustion engine power plants. For this reason, Hawaiian homeowners and the state as a whole are looking into solar energy as one of their primary energy generation options.
Is it worth going solar in Hawaii?
Going solar in Hawaii may be more appealing and profitable than going solar in most other states in the United States. Because this is a state with the highest electricity rates and the most expensive electric bills in the country, investing in solar energy is a no-brainer. With the help of the HCEI, Hawaii hopes to become the first state to be powered entirely by solar energy and other renewable energies.
In Hawaii, the average electricity rate is 32.06 cents per kWh, which is 167 percent or more expensive than the rates in states such as California, Wyoming, Montana, Texas, and even the entire West South Central region of the United States. The fact that Hawaii homeowners pay an average of $168 in electricity monthly bills (up to $2,017 per year) is understandable given the high rates, even though they consume 40 percent less electricity than the national average is also understandable.
Considering that the average per-capita consumption rate in Hawaii is 6,300 kWh per year, a solar rooftop generation system with a capacity of 4.5 kW DC is the ideal solution for any Hawaiian home. This Photovoltaic (PV) system in Hawaii has the potential to generate an average of 6,408 kWh per year, which is more than enough to cover the entire cost of your electricity bill.
Solar energy is extremely inexpensive in Hawaii, with prices as low as $2.79 per watt installed. This is why the 4.5 kW DC PV system costs $12.555 before any solar incentives are taken into consideration. After applying the Federal Tax Solar Incentive, which reduces the overall cost of the solar system by 26 percent, the price of the 4.5 kW DC PV system drops to $9,290, a savings of $2,600. With current solar prices at such low levels, the 4.5 kW direct current PV system in Hawaii has a very short payback period of only 4.6 years.
Because PV systems have an average lifespan of 25 years, the 4.5 kW DC PV will have recouped its initial investment in less than 5 years and will provide you with an additional 20 years of free solar energy after that. In other words, over the course of its useful life, the PV system will save you on average $50,436. This is $41,155.78 more than you paid for the solar generation system in the first place, which is a significant financial incentive to go solar.
If you live in Hawaii and want to go solar, we recommend that you do so as soon as possible. With the Federal Tax Solar Incentive, you can save as much as 26 percent on the total cost of your PV system. However, the incentive will be reduced to 22 percent by 2023 and completely eliminated by 2024. In order to benefit from a better price for your solar system, we recommend going solar by 2021 or 2022.
How much energy will your solar system generate?
Hawaii is an excellent state for solar energy because of the abundance of sunshine throughout the year. According to the National Renewable Energy Laboratory’s database, Hawaii receives radiation levels ranging between 4.2 and 6 kWh per square meter per day. These consistent levels of radiation allow PV systems to produce similar outputs month after month, ensuring that the appropriate amount of electricity is delivered to Hawaiian homes.
As a result of the high levels of radiation in Hawaii, your PV system can generate 4 – 6 full hours of solar energy at maximum output and efficiency when operating at full power. Because of this level of radiation, you can generate between 6,200 and 6,600 kWh per year with an 8-kilowatt direct current PV system and offset nearly 100 percent of your electrical bills if you install arrays that are nearly south facing.
If you are concerned about months with lower electricity generation and the fact that Hawaii does not have a Net Metering (NEM) program, the state has a program called the Distributed Generation Tariffs. We’ll get into the specifics of this solar incentive later, but for now, know that it works in the same way as a NEM program, with a few additional conditions, and that it allows you to offset monthly bills with excess power generated in previous months.
Given the high levels of yearly solar power generation in Hawaii and the state’s high levels of radiation, as well as its low monthly bills of $168, installing a photovoltaic (PV) system here can result in significant annual savings. In the average year, a 4.5 kW direct current rooftop solar generation system that offsets 100 percent of your monthly electrical bills can save you more than $2,000 in electricity savings on average.
Payment options for your PV system in Hawaii
The state of Hawaii allows homeowners to select from a wide range of payment options when purchasing a solar-electricity system for their homes. We will go over each of the payment options available to you so that you can understand what you have to choose from when going solar. This will ensure that you can power your home with solar energy.
- Solar purchase/cash: Purchasing a PV system in Hawaii with cash is the most straightforward and straightforward method of acquiring a solar energy system in the state. You will be eligible for all solar incentives and will be the sole owner of your solar energy system in this manner.
- Solar loan: Solar loans are available if you want to finance your PV system. You can apply for one at any time. There are several options available, including the FHA PowerSaver Loan Program, which has interest rates ranging from 4.99 percent to 9.99 percent, the GreenSun Hawaii loan, which has terms that vary depending on the lender, and the City and County of Honolulu – Solar Loan Program, which offers a 20-year payment term with a 0 percent interest rate on the top.
- Solar leasing: Solar leasing is a simple way to benefit from solar energy without having to make large up-front payments. It is possible to lease a solar generation system from a solar lessor at a fixed rate for the panels under this payment option. The only drawback is that you will not be eligible for solar incentives because you will not be the owner of the PV system.
- Solar Power Purchase Agreement (Solar PPA): The Solar PPA is another option for utilizing solar energy without having to pay for the entire installation of solar panels. When you choose this option, a solar company will install a photovoltaic (PV) system on your roof, and you will only be responsible for the electricity you consume at a fixed rate that is lower than your Hawaiian electric utility rates, which is a significant savings.
What are the solar incentives in Hawaii?
In order to ensure that Hawaii meets its 100 percent renewable portfolio standards by 2045, a number of federal and local solar incentives are currently in effect, providing homeowners with a variety of interesting benefits when they go solar. We will go over each of the state’s incentives in detail so that you can fully grasp what they are all about.
Federal Tax Solar Incentive or Residential Renewable Energy Tax Credit
The Residential Renewable Energy Tax Credit (formerly known as the Federal Solar Investment Tax Credit (ITC)) is the most widely used and financially attractive incentive available for renewable energy. With this incentive, homeowners in Hawaii will receive a 26 percent dollar-for-dollar reduction in their federal income tax liability on the entire cost of their PV system (including installation) if they elect to use solar energy.
Alternatively, if the incentive amount exceeds your federal tax liability, you may elect to carry forward the remaining amount to the following tax year. By 2023, this incentive will be reduced to 22 percent of the total, and it will be eliminated entirely by 2024.
Renewable Energy Technologies Income Tax Credit (RETITC)
The Renewable Energy Technologies Income Tax Credit, also known as the Solar and Wind Energy Credit, is a solar incentive that allows homeowners to claim an income tax credit of 35 percent of the total cost of their solar PV system, or $2,250, whichever is greater (whichever is less).
Honolulu Solar Property Tax Exemption
Renovations and improvements to a home almost always result in an increase in the value of the property and, consequently, an increase in property taxes. Real property tax exemptions for alternative energy improvements are available to homeowners in Honolulu, who can benefit from a 100 percent exemption for the added value of solar energy improvements to their home over a 25-year period.
Distributed Generation Tariffs (former Hawaii Net Metering Program)
Now, as promised, it’s time to go over the program that took the place of the previous NEM program. Earlier this year, the Hawaii Public Utilities Commission (PUC) decided to discontinue the Net Metering Program, and in its place, the commission implemented the Distributed Generation Tariffs program. This program distributes funds between the Smart Export and the Customer Grid Supply Plus programs.
Customer Grid Supply (CGS) Plus
The CGS Plus Tariff enables homeowners to sell any excess solar-generated electricity to the state electrical grid in exchange for credit toward their electric bill. Every credit will be applied to the next monthly bill; if there are any remaining credits from previous months, they will be forfeited as a result of the cancellation. Each credit has a different rate depending on where you are on the island. Systems with an output of up to 100 kW are permitted by HECO, MECO, and HELCO, while systems with an output of 50 kW are permitted by KIUC.
It is expected that homeowners will use excess power generated by their PV systems during daylight hours to charge their home batteries, according to the Smart Export Program. The electricity stored in the batteries will be fed into the grid during the evening, night, and early morning hours, and homeowners will receive credits at varying rates depending on where they live on the island.
Best Solar Companies in Hawaii: Our Top Choices
Choosing the most appropriate solar company is a significant decision. They will provide your solar equipment, install it, perform roofing maintenance, and issue you with the appropriate warranty, among other things. We compiled a list of our top picks for solar companies that provide service in Hawaii in order to ensure that you make the best choice possible. The following criteria were used to determine which companies would be chosen.
- The reputation of each company and level of client satisfaction with the results – We looked into certified reviews to ensure that the companies have a good reputation and that their previous customers are satisfied with the results of their solar-energy system purchases.
- Quality and quantity of performed solar projects – We looked at how many projects the companies had completed as well as the overall results of the systems they had installed to make sure they had prior experience with solar installations.
- Product brands and their quality – We take into consideration the brands and quality of each of the products that the company is currently using when providing PV systems to their customers.
- Partnerships and certifications – A certification to install quality products as well as partnerships with the best solar manufacturers are essential for a successful business.
- Warranty time, coverage, and policies – Each company must be held accountable for the work that they have completed, which is why we thoroughly investigated the warranties that were offered by each of them.
Providing services in Hawaii, the Big Island, Kailua-Kona, and Hilo, ProSolar Hawaii is one of the best solar installers in the state. ProSolar Hawaii is one of the best solar installers in the state. This company provides custom-sized photovoltaic (PV) systems that are perfectly suited to each and every one of the homeowners’ energy requirements.
The company specializes in the installation, repair, and maintenance of photovoltaic (PV) systems, as well as the provision of excellent energy storage systems. ProSolar Hawaii collaborates with some of the most innovative solar technology companies in the world, including Enphase Energy, Q Cells, SolarEdge, Panasonic, JinKo Solar, Solaria, SimpliPhi Power, ABB, PowerOne, Hyundai, Schneider Electric, and LG, to provide our customers with the best solar products available.
Pacific Energy, LLC is one of the most reputable solar installers on the Hawaiian island of Maui, offering a wide range of services. The company collaborates with the Hawaiian electric utility, MECO, as well as the customer in order to achieve the best possible outcome and the desired result for the rooftop solar energy system.
This company specializes in PV system installations and offers every product you could possibly need. They place a strong emphasis on customer service and will provide you with any information you require. We install quality solar panels from Sunpower, microinverters and monitoring systems from SolarEdge, and the Tesla Powerwall as a backup battery system. Pacific Energy, LLC is a solar installation company that specializes in solar installations.
RevoluSun, which was founded in 2010, has established itself as one of the most dependable and long-lasting solar companies in the state. As a result of its outstanding work and high level of service, this locally owned and operated company has earned one of the most prestigious reputations in Hawaii, having received numerous awards from solar magazines and even the state of Hawaii itself.
With the RevoluSun concept, the focus is on Smart Homes for solar installations, utilizing the best and most recent technology available in the solar market, and working side-by-side with each client to ensure they receive precisely what they desire. RevoluSun installs products from well-known manufacturers such as SunPower, Silfab, LG, Solaria, SolarEdge, and Tesla in order to set up high-quality PV systems.
Haleakala Solar & Roofing is one of the state of Hawaii’s oldest and most dependable solar energy installation companies. The company was founded in 1977 and has completed more than 14,000 certified inspections throughout the state. They have local offices on the islands of Oahu and Maui, but they provide solar services throughout the entire state.
They offer the traditional PV system installation, repair, and maintenance services, as well as the Professionally Managed Systems program, which involves the regular monitoring and inspection of your solar system by Haleakala Solar and Roofing. Besides that, they also provide solar installations with high-quality brands, customizing each option to fit the specific needs of each individual client and his or her system.
ProVision Solar is a premier solar installer with a wealth of experience that was founded in Hawaii in 1998. As a result, this company focuses on educating its customers about solar energy and designing specific premier systems that are affordable and perfectly suited for the power needs of the client, with an emphasis on optimizing the energy consumption of the PV system.
ProVision Solar specializes in the installation of photovoltaic (PV) systems, the repair and maintenance of solar panels, and the installation of backup energy storage systems. When you go solar with this company, you may be able to choose from a variety of high-quality solar products from manufacturers such as Q Cells, SunPower, Enphase, SolarEdge, and Tesla.
Rising Sun Solar Electric LLC, which was established in 1986, is one of the largest solar energy installers in the state of Hawaii. The company has more than 34 years of experience, has served more than 5,000 clients, and has installed approximately 30 MW of solar power to this day. Currently, the company has offices on the Hawaiian islands of Maui, the Big Island, Oahu, and Kauai.
In addition to solar panel installations, Rising Sun Solar Electric LLC also provides solar panel repair and maintenance as well as the installation of solar battery systems for its customers. This company makes an effort to work with the highest-quality products, which is why they only installed SunPower solar panels for the generation portion of the system and a Tesla Powerwall for the energy backup portion of the system, respectively.
Vivint Solar, which was founded in 2011, is one of the largest solar installers in the United States, providing services in a number of states, including Hawaii. This company provides high-quality installations that produce excellent results for customers, and it has received numerous awards in the solar industry for its efforts. Vivint Solar has offices on the Hawaiian islands of Oahu, Honolulu, and Maui.
Vivint Solar takes care of everything for its customers; they provide solar products, perform solar system installation and maintenance, roof repairs, and any other services you might require for your PV system in Hawaii, including roofing. Choosing from a variety of high-quality products manufactured by companies such as Enphase Energy, Canadian Solar Inc., and SolarEdge Technologies is part of the solar installation process with Vivint Solar in Phoenix. Trina Solar, Jinko Solar, JA Solar, Q CELLS, and LG are among the companies that make solar panels.
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