Renewable Portfolio Standards
Hawaii has huge and optimistic Renewable Portfolio Standards (RPS), though they are many years away from the deadline. The standards mandate that Hawaii generate 100% of its energy from renewable sources by 2045. Utilities will have to pay high fees if the standards are not met, so there is strong incentive in Hawaii for utilities to offer solar incentives.
As electric bills across the country go, Hawaii is in first place. No other state has such expensive electricity. An investment in solar energy is more financially rewarding in states with high electric bills, plus it helps that Hawaii enjoys abundant sunshine too.
Hawaii offers good net metering laws, a real asset to adopters of renewable energy. Net metering is a plan in which solar panels or other clean energy generators are connected to the grid, allowing customers to offset the cost of the power they draw from the utility with credits they earn on their own capture. If your solar system produces more power than you need, the excess energy is sold to the grid, which you see as a credit on your electric bill.
Interconnection standards are rules for connecting solar and other electrical generation systems to the grid. Hawaii’s standards cover all the islands. They make installation easier and usually less expensive, and net metering is more reliable too.
Performance-Based Incentives (PBI)
Hawaii offers PBIs, which are incentives based on the actual, metered power that your system generates. In Hawaii the program is called Solar Power Performance Payments. Payments are based on kilowatt-hours (kWh) or BTUs generated by your system, as clocked by the meter. The electricity produced is credited as Solar Renewable Energy Credits (SRECs), the value of which fluctuates by location and supply-and-demand. SRECs are a good way to help your system pay for itself.
Property Tax Exemption
In Hawaii you would keep paying your previous property tax after you install a home solar system because homeowners there enjoy a property tax exemption. The value of their home will not be reassessed.
Federal Tax Credit
On top of these programs and exemptions in Hawaii, you also qualify for the large tax credit from the Federal government. The Investment Tax Credit (ITC) is worth 26 percent of the system cost, and will be deducted from your Federal income tax. The credit only goes to those who buy their system (cash or loan), not to those who leased it. That’s a good reason to buy rather than lease. If you lease a system, incentives go to the third-party owner.