The federal landscape shifted at the end of 2025 — but with the highest electricity rates in the country and Hawai'i's own state credit still in place, the math still works overwhelmingly in your favor. Here's the full breakdown.
If you've been on the fence about solar, you may have heard the news: the 30% federal Investment Tax Credit — the incentive that's helped hundreds of thousands of Americans go solar — changed at the end of 2025. For some homeowners on the mainland, that's a real setback. But here in Hawai'i? The math still works overwhelmingly in your favor. Let's break it all down.
The federal Investment Tax Credit (ITC) allowed homeowners to deduct 30% of their solar system cost directly from their federal income taxes. On a $30,000 system, that was $9,000 back in your pocket. The residential portion of that credit was set to expire for new installations placed in service after December 31, 2025 — meaning the rules for 2026 are different from what many homeowners remember.
We'll be straight with you: that's a significant change, and federal policy can keep shifting, so always confirm current eligibility with your tax professional. But if you're a Hawai'i homeowner, the case for solar was never built on the federal credit alone. Here's why.
Hawai'i has its own solar tax credit — and it's been doing heavy lifting for local homeowners for years. The Renewable Energy Technologies Income Tax Credit (RETITC) allows Hawai'i residents to claim 35% of their solar system cost against their Hawai'i state income taxes, up to $5,000 per residential system.
On a typical 8–9 kW system costing around $29,000, that's $5,000 back from the state — still real money, day one. And unlike the federal credit, this one is uniquely Hawai'i's. Most mainland homeowners don't have anything like it.
Here's the number that changes everything: Hawai'i residents pay an average of 42¢ per kilowatt-hour — the highest electricity rate in the United States, and more than twice the national average of around 18¢/kWh. That's not a typo.
Every unit of electricity your panels produce is worth more than twice what it's worth to a homeowner in California or Texas. High rates mean faster payback and bigger lifetime savings. No other state in the country benefits from solar quite the way Hawai'i does.
Hawai'i ended traditional net metering back in 2015. Today, new solar customers are enrolled in the Customer Grid-Supply Plus (CGS+) program, which credits you for excess power sent to the grid — but at a rate well below what you'd pay to buy it back (around 15¢/kWh versus the 42¢ retail rate).
The smartest solar setup in Hawai'i today pairs panels with a battery storage system. Instead of exporting cheap credits to the grid, you store your excess energy and use it at night or during peak hours — capturing the full retail value of every kWh your roof produces. Battery technology has improved dramatically in recent years, and systems like the Enphase IQ Battery or Tesla Powerwall integrate seamlessly with your solar install. (For the full picture, see our guide on whether battery storage is worth it in 2026.)
Yes. Here's the simple version:
No other investment available to Hawai'i homeowners offers that kind of tax-advantaged return — backed by the sun, which has never sent a bill.
Choosing a local Hawai'i solar company isn't just good for the community — it protects your investment. Hawai'i's grid, permitting requirements, and utility interconnection process are unlike anywhere else in the country. A company that knows Honolulu's permit office, understands HECO's interconnection timeline, and has installed systems across Oahu and Maui will save you time, headaches, and money.
At Oceanic Home Solar, we're not a call center on the mainland. We live here. We install here. Our team serves neighborhoods like Aina Haina, Mililani, Kailua, and Honolulu every single week — and we stand behind every system we put on a Hawai'i roof.
The federal picture changed, but Hawai'i's solar story is far from over. With the highest electricity rates in the country, a strong state tax credit still in place, and battery storage making the economics better than ever, 2026 is still one of the best times in history to go solar in the Islands.
The families going solar today are locking in their energy future — for their homes, their wallets, and their 'ohana. Don't let one policy change be the reason you keep paying 42 cents a kilowatt-hour.
Immediate savings on your next bill, tax-credit eligible, and truly local service from your Hawai'i neighbors.
