Are Solar Panels Worth It in Hawaii?

7 factors to consider before getting solar panels in Hawaii

ConsumerAffairs has heard from thousands of solar customers who have already gone through the installation process.

It’s generally worth it if you like the idea of lowering your monthly utility bills, helping the environment and gaining more energy independence. But it doesn’t work out for everyone. Here’s what to consider before making the switch.

1. Solar panel installation costs

2. Your energy consumption

3. Hawaii solar incentives

4. Local solar export rules

5. How long you stay in your house

6. How you pay

7. The solar company you hire

1. Solar panel installation costs

Average solar panel costs in Hawaii are relatively low compared to other states. Before considering any incentives, solar panel costs start between $17,150 and $34,300. That doesn’t include a solar battery, which can add $7,000 to $18,000 to your total system costs.

Most installers set the price according to the system’s wattage, with a typical cost between $2.50 and $5 per watt. “Cost per watt” is a little like looking at the price per square foot when you buy a house. It helps you compare the value of solar energy systems in different sizes. In Hawaii, the average cost per watt is only $3.43.

Like most things, high-quality panels come with a more expensive price tag, but they often pay off in the long run with better performance and durability. The more efficient your panels are, the more electricity they produce and the less space they take up on your roof.

Average solar panel installation cost by system size in Hawaii

2. Your energy consumption

A typical Hawaii household needs a system with a capacity of 9.22 kW to offset its electricity needs with solar energy. You might need a larger or smaller system, depending on your current energy consumption.

Look at your latest utility bills to see how much electricity your house needs each month. This tells you what size and capacity your solar system needs to be.

Once you know your current energy consumption, you can calculate your potential savings and the time it should take for your solar installation to pay for itself.

It’s a common misconception that solar panels always completely eliminate your monthly power bill. This is not always the case. Still, you’ll likely be paying less than you would for traditional utility bills.

What Hawaiian homeowners say about going solar

Michael in Kailua-Kona told us their bills are $30 or $40 each month — significantly less than the $350 he was paying before. Many only have to pay their utility’s minimum connection fee each month.

Audra in Honolulu, an early adopter of solar panels, emphasized the energy cost savings and environmental benefits. “As oil prices increase over time I assume that so will energy cost, therefore, I decided to invest in renewable energy,” she told us.

“Additionally, I want to help save the environment and reduce greenhouse gasses that's leading to global warming,” she continued. “I've lived in that house for over 35 years and I can see how the climate has changed since the summer months have become much hotter.”

“Going solar is a no-brainer as an investment,” Jose in Haiku told us. For his property in the jungle of Maui, having a solar storage battery is a huge bonus.

3. Hawaii solar incentives

The 30% federal solar tax credit is gone, but Hawaii still has a few good solar programs:

• State solar tax credit: Worth 35% of eligible costs, generally up to $5,000 for a single-family home. New income limits and other changes take effect in 2027.

• Honolulu property tax break: Qualifying solar equipment generally won’t increase your property tax assessment.

• Hawaiian Electric BYOD Plus: Offers upfront incentives for eligible home batteries. Some customers can also earn monthly export credits. In return, the battery must discharge during a selected two-hour period each day.

» MORE: Solar incentives in Hawaii

4. Solar export rules  in Hawaii

If your solar panels produce more electricity than you can use, you may be able to send the extra power to the grid and earn bill credits. But traditional net metering is no longer widely available to new solar customers in Hawaii.

Instead, solar export rules depend on your utility and where you live. Hawaiian Electric customers can choose from programs that offer credits for extra solar power sent to the grid, while some homeowners may opt for a non-export system and use or store their excess power at home.

Export credits are generally worth less than the retail electricity rate, so homeowners often get the most value by using as much of their solar power as possible themselves. Adding a battery can help by storing extra energy for later use.

Rates and program rules vary by island and utility. Check with Hawaiian Electric (HECO) or Kauai Island Utility Cooperative before estimating your potential savings.

5. How long you plan to stay in your house

Buying solar equipment is expensive, and it takes five to 10 years to recover the initial investment through savings on electric bills. If you sell your house and move before then, you might not fully realize the financial benefits of your solar panels.

It’s true that solar panels can increase the value of your home. But they can also complicate a sale. This is especially true if you lease your system, since the buyer may need to take over the contract.

If you think you’ll move in the next couple of years, you may want to consider a home improvement project with a better return on investment, like a kitchen or bathroom remodel.

6. How you pay

Hawaii homeowners may have a few ways to finance solar. Some low- to moderate-income Hawaiian Electric customers may qualify for the state’s GEM$ program, which offers below-market financing with payments added to the monthly electric bill.

Compare your expected loan payment with your projected utility savings, interest charges and total financing costs before deciding whether a solar loan makes sense.

• Solar loans work like any other type of home improvement loan. There’s an application and approval process. You pay it back over time (with interest) each month.

• Leasing solar panels lets you set up a system without the high upfront costs. Monthly payments usually range $150 to $250. Agreements last 20 to 25 years.

• Power purchase agreements are similar to solar leases. Instead of buying the panels, you agree to buy the electricity they produce at a set rate. The solar company owns and maintains the system, and contracts typically last 10 to 25 years.

Monthly costs: solar payments vs. savings

One way to decide if solar is worth it is to compare your monthly solar payment with how much you save on electricity.

For example, Shannon in Waipahu saves about $50 a month after accounting for the cost of the solar system. “It may not seem like a lot of money, but when you put [it] over a span of a year, it’s a decent amount of 600 bucks, so we’re happy,” Shannon told us. “It’s definitely worth it, especially if you aren’t happy with your current electric bill.”

» SOLAR PANELS: Lease vs. buy 

7. The solar company you hire

People have mixed experiences with solar companies. In the best-case scenario, it’s easy to make the switch and you’re happy with the system’s performance. In the worst-case scenario, you end up paying thousands for mid-tier solar equipment from a company with poor customer service and no follow-up or support.

One of the most common complaints is related to pushy sales reps who make promises that can’t be delivered.

For instance, Kendra in Kaneohe told us she entered a solar lease, believing that it would be financially beneficial. Instead, her electric bill is still high, and she’s on the hook for the monthly lease payment.

That’s why it’s so important to thoroughly research and verify claims made by sales teams before making a decision. Use NLR’s PVWatts Calculator to estimate how much electricity a solar panel system can produce over a year on your house.

Is my house a good candidate for solar panels?

In Hawaii and elsewhere, going solar ends up being worth it for many homeowners as long as their home is a good candidate to support a solar panel installation. Here’s what to think about before you commit:

• How old are your appliances? The first step is to ensure that your electrical loads are as small as possible. For instance, if you have an older refrigerator or air conditioning unit, it’s smart to upgrade those before investing in solar panels.
• How much sunlight do you get? Solar panels need regular exposure to sunlight to produce the most energy possible. Hawaii averages 5.5 to 6.5 peak sun hours each day. However, lots of shading — like trees or tall buildings above your roof — could make your solar system less efficient.
• What is the size and angle of your roof? Hawaii (and the rest of the United States) is in the northern hemisphere, so solar panels perform best on south-facing roofs. The worst place to install would be on north-facing roofs, especially if those roofs have a high pitch. For example, if the only place you can install is a north-facing roof with a 30-degree pitch, your costs will likely go up by 30% to 40%.
• What is the condition of your roof? If you have to replace your roof, do that before you install solar panels. Solar panels are designed to last up to 30 years, so you want your roof to last just as long. Otherwise, it could cost thousands to remove the panels, fix your roof and reinstall the panels again.

Pros and cons of solar panels in Hawaii

Hawaii’s sunny climate maximizes the amount of power produced by solar panels. But you can expect some seasonal fluctuation in how much energy your panels produce.

Benefits of solar panels in Hawaii

The benefits are somewhat obvious. “We have one of the highest electrical rates in the nation,” James in Haleiwa told us. “Besides saving $400 to $500 a month on our electricity bills, it feels so good to know my house is powered by the sun.”

• Cheaper energy bills: Going solar now means that your monthly energy expenses will be more predictable (and often lower). It also protects you from future energy cost increases.

• Better for the environment: Traditional energy sources like coal and natural gas release carbon dioxide and other harmful pollutants into the air. Installing solar panels on your roof helps the environment primarily by reducing greenhouse gas emissions and dependence on fossil fuels.

• Higher home resale value: Installing solar panels can increase a home’s value. The exact increase in value varies by location, with homes in active solar markets sometimes seeing even higher boosts.

• More energy independence: Some homeowners pair solar with battery storage for more energy independence and backup power during outages.

Drawbacks of solar panels in Hawaii

The main obstacle to going solar is the high upfront cost of purchasing and installing solar panels, inverters and other equipment. Then, since solar panels do not generate electricity at night, you need to pull power from the grid or get a storage battery to keep your lights on.

• Solar equipment is expensive: Solar panel prices typically start between $10,000 and $30,000. It’s even more expensive if you want a solar battery for energy storage. Solar battery costs are generally between $7,000 and $18,000. Grid-tied systems need battery storage or another backup setup to keep powering a home during an outage.

• Potential roof leaks: The installation process involves drilling holes into the roof to anchor the panel mounting systems. If not done correctly, this can lead to leaks or structural damage.

• Could make your house harder to sell: Solar panels can make a home harder to sell if they’re leased or financed, since the buyer may have to take over the agreement. Some buyers may also worry about roof repairs, maintenance or whether the system will actually save them money.

• Some solar companies are sketchy: Like in any booming industry, some salespeople want to make a quick buck and might say anything to close a sale. It’s important to read your contract carefully, especially if you finance or lease a system. Some solar financing agreements can place a lien or other security interest on the property or equipment, which may complicate refinancing or selling your home.

» MORE: Solar energy pros and cons

Find solar companies in Hawaii

A good solar company helps you navigate local incentives, permitting and net metering policies. Compare our picks for the top solar companies in Hawaii to learn more.

Hawaii solar FAQ

Bottom line: Is going solar in Hawaii worth it for you?

For a lot of homeowners, solar panels are worth it as long as their cost savings over time outweigh the initial investment. Others are happy to go solar for the environmental benefits alone.

If you can afford it, buying your solar energy system outright typically provides the highest return on investment. You own the system from day one and receive the benefits of available tax credits. Plus, you don’t have to pay interest on a loan.

Solar costs and savings in Hawaii vs. Pacific Coast states

» EXPLORE: Solar energy statistics