Hawaii Solar Incentives (2026): A State Tax Credit With New Limits, and Pay by the Hour

Which Hawaii solar incentives can you still get, and on which island?

Five things matter for a home system, sorted by money for a typical household.

The federal tax credit for home solar ended for systems switched on after December 31, 2025. It is not part of any number on this page.

How much is the Hawaii solar tax credit after Act 24?

The credit is still 35% of what your system costs, up to $5,000 per system on a single-family home. The law is section 235-12.5 of the Hawaii Revised Statutes. You claim it on Form N-342 with your Hawaii income tax return for the year your system is switched on.

Example: a system that costs $10,000 earns $3,500. The typical 3.66 kW system costs $11,675 and earns $4,086. Any cost above about $14,286 earns nothing more, because the credit stops at $5,000.

A battery counts toward the cost if it goes on the same property in the same tax year as the panels. Any utility rebate is taken off the cost before the 35% is worked out.

If your credit is bigger than your tax bill, the unused part carries over to later years. Or you can choose a credit that is 30% smaller and get the unused part paid out as a refund: $2,860 on the typical system. You cannot undo this choice.

Act 24, signed on May 21, 2026, made four changes. Read them before you put $5,000 into your budget.

• A certificate. Before March 1 of the year after your system is switched on, you send a signed statement to the Hawaii State Energy Office with your income, your system cost and the credit you claim. The office checks it and tells you by May 31 how much credit you may claim.
• A statewide limit. Total credits are limited to $40,000,000 for each calendar year from 2027 to 2030. If the certified claims add up to more, the $40,000,000 is split among all applicants in proportion to their costs. Your credit can then be less than 35%.
• An income limit. From tax year 2027, you cannot claim the credit if your adjusted gross income (a figure on your tax return) is above $175,000, or $350,000 for a joint return. There is no partial credit above the line.
• An end date. The credit does not apply to tax years that begin after December 31, 2029. A system switched on in 2030 gets nothing.

Watch out: The law says the certificate and the limit reach back to systems switched on in 2026. The Governor’s Executive Order 26-02 lifts the limit for a 2026 system only if it was finished before May 21, 2026, or if the owner can show money or work went into the project before that date. A project started after that date meets neither test. The Energy Office had not posted filing instructions when we checked. Confirm the steps with the office or a tax professional.

What does Hawaiian Electric pay for solar power you send out, island by island?

Hawaiian Electric serves Oahu, Maui, Hawaii Island, Molokai and Lanai. New solar homes there join Smart Renewable Energy Export, open since April 1, 2024. When your panels make more power than your home uses, the extra goes to the grid and you get a credit on your bill.

Example for Oahu: 100 kWh sent out by day earns $13.50. The same 100 kWh sent out in the evening earns $32.90. On Maui, 100 kWh by day earns $6.60.

• Your rates are locked. The rates in your agreement stay the same for the first 7 years. This is automatic for every new agreement. After that, your rates follow the current table, which Hawaiian Electric updates every 3 years.
• These rates have a window. They apply to agreements signed through April 2027. Agreements signed later get the next set of rates.
• You need an advanced meter. This is a digital meter that reports your use to the utility.

A quote that uses one export rate for the whole state is wrong for your island.

Watch out: Export credits are not cash. They are settled once a year, and credits left at the end of the year expire. They also cannot take your bill below the minimum charge. Size your system to your own use, not to send out as much as you can.

How does the Hawaiian Electric battery payment (BYOD Plus) work?

Bring Your Own Device Plus pays you for adding a new battery to rooftop solar. You pick a 2-hour window. Every day in that window, your battery serves your home first and sends what is left to the grid. In return, Hawaiian Electric pays $400 per kW that you commit, once, with no maximum. For a battery, kW is how much power it can give at one moment.

Example: commit 5 kW and you get $2,000. Households with a gross income under 140% of area median income, the middle income where you live, get $400 per kW more. That makes $800 per kW, or $4,000 for 5 kW.

You also get a monthly bill credit for the power your battery sends out. Hawaiian Electric’s own example for 5 kW is about $52 a month. It calls that figure approximate.

• Who can join: Hawaiian Electric customers with a new battery paired with solar, an advanced meter, and at least 1 kW committed.
• Who gets the payment: the owner of the battery. If you lease, the leasing company is the owner and gets it.
• Older solar homes: homes on net energy metering, an older program that credits extra power at the full retail rate, can join. They get the upfront payment but no monthly credit.

Watch out: If you leave early, you repay part of the upfront payment. Hawaiian Electric’s page gives the commitment as 5 years in one place and as a 10-year commitment in another. Get the term in writing before you sign. The older Battery Bonus program closed on December 31, 2023 on Oahu and on June 30, 2024 on Maui.

What changes if your home is on Kauai?

Kauai is not served by Hawaiian Electric. Your utility is Kauai Island Utility Cooperative (KIUC). None of the island rates above apply, and we found no KIUC payment for home batteries when we checked. The state tax credit does apply on Kauai.

KIUC buys your extra power under a program called Schedule Q. The price is KIUC’s avoided cost: what it would have paid to make that power itself. It changes every month with the price of oil, so ask KIUC for this month’s rate before you compare quotes. From January to September 2026, the monthly rate ran from 14.33 cents to 27.14 cents per kWh.

Example: 100 kWh sent out at 14.33 cents, the lowest monthly rate so far in 2026, earns $14.33. Ask KIUC for this month’s home rate too. When the home rate is higher than the export rate, solar power you use yourself is worth more than power you send out.

• Size limit: KIUC sets a “right size” for each home. For a home that uses up to 500 kWh a month, the right size is 2.5 kW or less. The typical Hawaii system of 3.66 kW is above that.
• Bigger than the limit: you must add a separate meter that lets KIUC switch your panels off when the island has more solar power than it can use. KIUC calls this curtailment.

Watch out: KIUC says the Schedule Q price should drop as it burns less oil. Do not plan on this year’s rate for the life of your system.

Honolulu property tax, Shared Solar and the GEM$ loan

When the money is smaller than the quote says

• Your quote shows the full $5,000 as certain. The statewide limit of $40,000,000 a year can shrink every credit. Only projects that meet the test in Executive Order 26-02 are outside it for 2026.
• Your income is above the new line and your system is switched on in 2027 or later. Above $175,000, or $350,000 for a joint return, the credit is zero.
• You miss a deadline. The Energy Office statement is due before March 1. The tax claim must be filed within 12 months after the tax year ends, or the credit is lost.
• A company owns the panels or the battery. With a lease, the leasing company gets the battery payment. The tax credit goes to the taxpayer who installs the system. With a lease or a PPA, where a company owns the system and sells you its power, ask in writing who claims it.
• You were told you can join net metering. Net energy metering closed to new homes on October 13, 2015. The programs that followed it, Customer Grid-Supply and Smart Export, are closed too.
• Your quote still counts the federal tax credit. It ended for systems switched on after December 31, 2025. Ask for a new quote.

From quote to tax return: who files what in Hawaii

1. Before you sign: check the three numbers. Which island rates does the quote use? How much battery power is committed? What does it assume about the tax credit?You, with your installer.
2. Your contractor applies to the utility. On Hawaiian Electric islands, this goes through its online Customer Interconnection Tool, for the export program and the battery payment together. On Kauai, it is KIUC’s interconnection application, the request to connect your system to the grid. For the lower-income battery payment, Hawaiian Electric must confirm your self-certification form first.Your contractor. You send the income form.
3. After the install: battery data. For the battery payment, your contractor sends 3 or 7 days of battery operating data, and the system owner signs an IRS W-9 form.Your contractor and the system owner.
4. Before March 1 of the next year: the Energy Office statement. Send your income, system cost and credit amount to the Hawaii State Energy Office. It answers by May 31 with a certificate.You.
5. With your Hawaii tax return: Form N-342. Attach the certificate. File within 12 months after the tax year ends.You or your tax preparer.

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