Your Guide to Solar Panels in Hawaii: 7 Steps to Solar Panels in Hawaii

Step 1: What to Consider When Buying Solar Panels in Hawaii

Although going solar in Hawaii is more affordable than it is in most other states, the $14,685 average cost of solar panels in the area means you shouldn’t just jump into converting without assessing your home’s solar viability.

Research If Solar Panels Are a Good Fit For You in Hawaii

Your first step in determining if solar is a good investment for your home should be to figure out the size of the array you’ll need to offset your energy bills. You can get an estimate of how many panels you need by using our solar calculator.

This tool takes a few things into consideration, including the direction your home faces and tree coverage that casts shade on your roof throughout the day. If your system estimate is significantly larger than the average in the area — 5.5 kilowatts (kW) — then you can assume there’s some factor that’s detracting from your solar viability.

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Tree coverage is an important consideration, but you should also look into the weather in your area. Hawaii sees around 240 days of sunshine per year, which is well above average.³ However, local conditions vary drastically, with places like Hilo on the Big Island getting well below the average amount of sun annually.⁴

Photovoltaic (PV) panels produce less power under cloud coverage, so homeowners in areas with less sunlight will naturally see lower levels of production and, therefore, fewer savings in the long run.

Consider Net Metering

One of the most important things to consider when assessing how well-suited your home is for solar is your access to net metering, also called net energy metering or NEM. NEM is a policy offered by utility companies that credits you for the excess energy you generate and route to the grid. Future bills can be credited based on the credits you accrue.

The Hawaii Public Utilities Commission (PUC) used to mandate NEM for all utility companies, but it no longer does. Instead, some utility companies opt to offer distributed generation tariffs, which are similar to net energy metering but often end up being less beneficial due to less availability and lower credit amounts in some cases per kilowatt-hour (kWh) of excess power.

We’ll list the NEM policies for the largest utility companies in the state below:

• Hawaiian Electric Company (HECO)* — HECO offers the full retail rate, but there can be adjustments made based on the cost of delivering the energy.⁵ Solar systems over 100 kW are not eligible, but nearly every residential solar system will be much smaller than this.

• Maui Electric Company (MECO)* — MECO operates under the same parent company as HECO now, so the rate offered is the same. Eligible system sizes are capped at 100 kW.

• Hawaii Electric & Light Company (HELCO)* — HELCO also operates under the same parent company as HECO and MECO, so the rates and system size limitations are the same.

• Kauai Island Utility Cooperative (KIUC) — KIUC provides the full retail rate per kWh generated as well, although customers will still be responsible for paying base fees, including the delivery charge and demand charges.⁶ The credits carry over for an entire year before being reset to zero. KIUC limits eligibility to solar panel systems under 50 kW, but again, this is far bigger than most Hawaii homeowners will install.

*Now operating under Hawaiian Electric

Your access to net metering will have a drastic effect on your long-term savings. The better your program, the more likely you’ll be to eliminate your energy bills and push your lifetime savings up.

The table below includes some solar statistics for the State of Hawaii and the U.S. as a whole. These should drive home just how valuable solar conversion is in your area, especially given the panel payback period and the lifetime savings.

Research How to Finance Solar Panels

Provided you’ve determined that your home, in particular, is a good fit for solar system installation, you can now move on to figuring out how to pay for your equipment.

If you didn’t use our solar calculator to figure out what size system is right for your home, now is a good time to do so. You can then multiply the number of watts estimated for your property by the average price per watt for PV equipment in Hawaii — $2.67 — to get an estimate of what your total will be.

Remember, this isn’t necessarily the price you’ll pay for your system, as you can likely use tax incentives and rebates to bring your effective costs down. Additionally, one of the biggest upsides to going solar is that the equipment is expected to pay for itself and provide additional savings after that point, so the overall value will likely far outweigh the initial cost.

There are four primary financing options for PV equipment, which we’ll explain briefly below. Hawaii also has some state financing options that can help make going solar more affordable, and we’ll mention these further down.

• Cash payments: When you pay for your system in cash, you’re responsible for the entire system cost at once. This is often not a feasible option for residents, but if it is, this payment option will yield the greatest savings and the lowest all-in system price. You will be eligible for the federal investment tax credit (ITC) if you choose cash as well.

• Solar loans: Solar loans are more accessible than cash payments because you only pay a small down payment upfront rather than the full cost. You’ll pay the remainder of your system total over several years, which will include interest. The interest will make your system more expensive, and it will drive down your savings a little. Loans also give you access to the federal tax credit.

• Solar leases: With a solar lease, you pay a monthly rental fee to rent your panels, and you’ll see immediate savings because you get to use the energy they produce to offset your electric bills. Ideally, your lease payment will always be under your normal monthly electric bill. Leases don’t let you take the federal credit, which is a pretty significant downside, and savings are limited.

• Power purchase agreements (PPAs): With a PPA, your panels are installed at no cost, and you agree to buy the energy they generate at a below-retail cost. You never own your panels with this option, so you can’t take the ITC. This option is the most affordable initially, but it saves the least over time.

As mentioned above, Hawaii has a few additional options for going solar that are state-specific. We’ll include a quick list of these options below:

• Community Renewable Energy Program: This program establishes regulations that provide access to community solar for Hawaiians. This isn’t a traditional financing option, but it is another way you can buy into clean energy in the Aloha State.⁷

• GreenSun Hawaii: This is a widely available financing program that makes solar more accessible by keeping interest rates to a minimum and maintaining low down payment requirements for loans. This program is also available for other products that use renewable energy sources, like solar water heaters.⁸

• Green Energy Money Saver (GEMS) Program: The GEMS program is for low-income residents. It adds your monthly payment to your electric bills for ease of payment, making it similar to Property-Assessed Clean Energy (PACE) financing in other states.⁹

When you’re choosing a payment option, we implore you to consider the panel payback period first. Options with no payback period will be the least beneficial over time, and options with shorter payback periods will save you the most in the long run.

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Step 2: Getting a Quote from a Solar Provider

Once you choose a payment option that fits into your budget, you can start looking for a solar provider that accepts that option. We’ll explain what to look for in a solar installer and how to contact them in the following sections.

Picking a Solar Installer

Choosing an installer to handle your solar project is an intimidating process and is complicated by the fact that there are nearly 70 solar companies to choose from in Hawaii.¹⁰ We recommend doing some preliminary research on the providers in your area and looking for the following criteria:

• The installer should have at least five years of experience serving the Hawaii solar industry.
• The company should have affordable pricing and high-quality, tier-one equipment brands.
• The provider should offer good warranty coverage for the equipment, panel efficiency and labor.
• The installer should have at least one NABCEP-certified (North American Board of Certified Energy Practitioners) on each installation team.
• The company should have positive customer reviews, a good rating with the Better Business Bureau (BBB) and few complaints filed by past customers.
• The provider should accept your preferred payment method.

Below is a short list of some of our top recommended solar installers in your area, all of which meet the criteria above:

• Rising Sun Solar — Local installer
• RevoluSun Hawaii — Local installer
• SunPower by Eco Solar — Local installer
• Malama Solar — Local installer
• Independent Energy Hawaii — Local installer

You can get more information about these providers and why we chose them by reading our guide to hiring a reliable solar installer in HI.

What to Expect After Requesting a Quote

Once you provide your contact information to a solar company, a sales representative should reach out to you in a day or two to discuss your expectations and property needs. You’ll be asked to provide a recent energy bill to confirm your average monthly consumption, and the rep should set up a roof inspection to be completed by a technician with the company.

After the inspection is completed, the design team will start designing a system for your home and energy needs. Once that’s completed, your sales rep will connect with you again to give you a formal solar proposal and discuss the information contained within it.

Your proposal is the formal quote for service for your home, and it should provide the following:

• The price of your system before and after the federal tax credit and Hawaii’s state tax credit, the Solar and Wind Energy Credit, also called the Renewable Energy Technologies Income Tax Credit (RETITC).
• The number of panels needed to offset your energy bills and how they’ll be arranged on your roof.
• The proposed installation location and costs of any add-on products.
• Estimates for how much energy your panels will generate, how much your system will save you over time and how long it will take the system to pay for itself.
• Warranty information.
• Payment information.
• Cost information for permits and inspections.

We typically recommend all solar customers get a few quotes from different companies to compare. While this can be time-consuming, you can often save money doing this by finding a better value. Some companies will price match, too, which can leave you with a higher quality system for less.

Consider Purchasing Solar Accessories

All solar panel systems include panels and inverters to convert your solar energy to usable electricity. Some solar customers also opt for add-on products to expand their systems’ capabilities or make them more valuable. Below are some common add-on products seen in Hawaii that you might want to be included in your solar quotes.

• Solar batteries: Since NEM is no longer mandated in the state, many Hawaii homeowners choose to install solar batteries with their panels. Batteries provide access to effective net metering, which is helpful in your area, given the above-average energy costs. Local solar companies push energy storage systems because they provide power through the common power outages in the state.¹¹ Plus, customers of Hawaiian Electric have access to the Battery Bonus program, which is a solar rebate for battery storage solutions like the Tesla Powerwall.

• Energy efficiency upgrades: Hawaiians pay more for electricity than residents in any other state. As such, it’s hugely beneficial to upgrade home energy efficiency in the state. Many solar providers recognize this and offer upgrades like solar water heater installation, window and door replacements and more.

• Electric vehicle (EV) chargers: Hawaii is ranked second in the country for EV adoption.¹² It should come as no surprise that at-home EV chargers are a common add-on product in the area.

Step 3: Signing a Solar Contract in Hawaii

When you’ve chosen a solar installer you’re comfortable with and that has terms you agree with, you can proceed with signing the contract for the installation. We’ll explain what to look for in your contract and what to expect once you sign in the following sections.

How Do Solar Warranties Work in Hawaii?

One of the first things we recommend you look for in your contract is the information on your warranty coverage. Solar warranties are offered on three different things: panel efficiency, the equipment and the workmanship. We recommend looking for all three.

• Efficiency warranties: Efficiency warranties last for an average of 20 years and guarantee at least 80% of your original panel efficiency remains after that time period. The specifics will vary among companies.

• Equipment warranties: Equipment warranties last for an average of 25 years and cover manufacturer defects that can cause problems with production.

• Workmanship warranties: Workmanship warranties last for an average of ten years. These protect you from issues that stem from poor installation work. Some of the best labor warranties also cover roof leaks and resulting water damage.

When Can I Expect Solar Service to Go Live?

After you sign your solar contract, you should expect to wait between four and six months before your panels are installed and fully functional. There are a few things that affect this timeline, including the following:

• Delays from your installer due to high demand.
• Delays in getting building permits approved.
• Delays in getting the final inspection completed by a representative from your utility company.

It’s unlikely that weather will cause delays in installation since Hawaiians enjoy sunny weather for most of the year.

Solar Panel Permits in Hawaii

The permitting process is an important step in solar conversion. Filing for permits should be completed by your panel installer, but you will be responsible for any permitting fees incurred. The fees vary based on where you live and the permit requirements instituted by your local municipality.

For example, the City of Honolulu on Oahu bases the building permit cost on the total construction cost of your home solar system. The base cost is $12, plus $2.20 per $100 worth of work.¹³ Given the average installation cost in the area, that comes out to around $333.

Hilo and Waipahu in Hawaii County have a convenient online application program for expedited permit processing.¹⁴ Unfortunately, the county doesn’t publicize permit cost information, so you’ll need to have your installer file for the permit and relay the fee to you.

You can also check your solar proposal, as this should contain all of the permit fees expected for your installation.

Solar & Utility Interconnection

Your installer should also be filing for interconnection for you. Interconnection is what governs how your solar energy system interacts with the electric grid, and it’s what allows energy to flow back and forth based on how your energy production compares to your consumption. As you might have guessed, it’s required to take advantage of net energy metering as well.

Every utility provider in Hawaii will have a slightly different process for applying for interconnection. Most will have an online application and won’t charge for submitting it.

All companies operating under Hawaiian Electric — including HECO, MECO and HELCO — use an online portal for interconnection applications that your installer can access.¹⁵ There is no fee to apply.

KIUC has a printable application that your solar provider can fill out and submit.¹⁶ There is also no fee charged for applying for the service.

The application, approval and inspection process required to be interconnected to the power grid will take some time and will lead to longer installation and connection timelines. Even if it takes weeks for the process to conclude, it’s worth the wait. Interconnection lets you access net energy metering (if available), which is one of the most valuable solar incentives in HI.

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Step 4: What to Expect on Solar Panel Installation Day in Hawaii

Solar installations in Hawaii take between three and six hours, which is faster than average due to the relatively small array size needed to offset Hawaiian’s energy usage. It could take longer if you have add-on products that need to be installed as well. Your installer should show up early in the morning and will work through the afternoon to get your system installed and connected.

One of the most common questions we get from Hawaii residents is, “do I need to be home for solar panel installation?” You should plan on being home all day when your panels are being installed. Your technicians will need interior access to your home to complete the installation and connect the panels and inverters to your electrical panel.

Some installers will schedule the inspection with your power provider on the day of the installation, which can extend the timeline by a half hour or so. This inspection is required for interconnection in most cases, so it’s sometimes scheduled for the installation day to expedite connection to the grid.

Step 5: Final Inspection for Installed Solar Panels in Hawaii

The permits that your installer opened for solar power system installation will need to be closed out before they expire. Open permits can prevent a buyer from financing your home if you go to sell, and they can also lead to violations in some cases. Closing the permits is a necessary step for legalizing your system.

Your installer should schedule the final inspection with your building inspector. Some inspectors will just do an exterior inspection, while others will need interior access. If access is required, your installer will facilitate the scheduling of the inspection so that you can meet the inspector for access.

There is no fee for the initial inspection, but you might incur a re-inspection fee if you miss your original appointment.

After the inspections are done, you’ll be the only one to continue monitoring your system. Some panel manufacturers — like SunPower and Tesla — offer free mobile apps for solar monitoring that you can use to confirm your panels are producing power as they should. You can ask your installer about solar monitoring apps or software on the installation day.

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Step 6: Permission to Operate (PTO) in Hawaii

The last step before your panels can be connected to the grid and start generating electricity for your home is to get permission to operate (PTO) from your energy provider. This requires an inspection completed by a representative from the company to make sure your system is connected properly.

As mentioned before, some installers will schedule this inspection on the installation day to save time, but others will wait until the installation is wrapped up. The inspection is usually only an exterior one, so you won’t need to be home for it to provide access.

After the inspection is done, you’ll get PTO, and you can officially activate your system. You should ask your installer how to turn on your system and how to shut it off in case of an emergency. You can also ask about solar monitoring if your technician hasn’t discussed it with you already.

Lastly, you should have emergency contact information for your electric company on hand in case you run into any major issues in the future. In case of an electrical fire or life-threatening system malfunction, you should call 911 and then your energy provider’s emergency number. We’ll list the numbers for some of the more popular power providers below for reference.

• Hawaiian Electric (HECO/MECO/HELCO): 1-855-304-1212

• KIUC: 808-246-4300

Step 7: Sit Back and Enjoy Your Solar Energy in Hawaii

Finally, the hard work is done! At this point, your system should be generating power for your home, which means your carbon footprint will be reduced. You should also see energy savings start to accrue, which will go toward paying off your installation costs. Over time, these savings should add up to close to $50,000.

You’ll also see a return on investment if you sell your home after converting. Solar panels increase your property value because buyers see the benefit of not paying the unusually high energy prices in the area. On average, your home value should go up by around 4.1%.¹⁷

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