Hawaii Solar Rebates And Incentives

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Hawaii Rebates and Incentives Summary



Hawaii, land of volcanoes, waterfalls and immense beauty, is taking steps to become the most energy-independent state in the U.S. through an ambitious partnership with the Department of Energy (DOE). Under the partnership, DOE and Hawaii established the Hawaii Clean Energy Initiative. And it couldn’t have come at a better time. Since Hawaii traditionally has relied on expensive diesel imports to generate electricity, it has the highest electric costs in the U.S. In fact, in 2012 it became the first state to reach parity with solar. Through the initiative and other incentives like tax credits, a feed-in tariff, existing net-metering program, and low-interest loan programs, Hawaii is helping its residents make the transition to solar and its renewable cousins. The state also offers rebates for solar hot water systems.

Under the clean energy initiative, DOE will help Hawaii’s smaller islands transition to 100 percent renewables by 2030. Across all the islands Hawaii will attempt to drastically reduce its consumption of petroleum—by about 72 percent—and plans to have 40 percent of its energy coming from renewable resources like solar, wind and ocean power by 2030.

The state still has a long way to go. As of 2010, 90 percent of the island state’s energy comes from petroleum, with three quarters of the state’s energy being generated by primarily petroleum power-plants, according to the DOE’s Energy Information Administration. While coal powers most of the United States, transporting coal to Hawaii via ship, would likely be prohibitively expensive, compared to shipping petroleum to the state.

The state already is a leader in the nation when it comes to solar-water heaters. As of 2010 the state already had 80,000 solar water heaters installed. And, thanks to the 2008 Solar Roofs Act, most new homes in the state are required to have solar water heaters as well.

Given Hawaii’s subtropical environment with mild year-round temperatures, energy use is lower in the state than in most other states. And because of its location in the Pacific, the state has vast potential for different types of renewable energy, including solar, geothermal (it is built on volcanoes after all), wind, and ocean power.

(As of October 2012)

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Building Energy Code

Note: The Hawaii Building Code Council has proposed adopting 2015 IECC standards.

Much of the information presented in this summary is drawn from the U.S. Department of Energy’s (DOE) Building Energy Codes Program and the Building Codes Assistance Project (BCAP). For more detailed information about building energy codes, visit the DOE and BCAP websites.

No schedule exists for making statewide changes to the Hawaii Model Energy Code (HMEC). Each county reviews its code periodically. If changes are deemed necessary on a statewide basis, the Department of Business, Economic Development, and Tourism (DBEDT) submits proposed legislation to the state legislature. Following

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City and County of Honolulu - Real Property Tax Exemption for Alternative Energy Improvements

In September 2009, the Honolulu City Council unanimously passed Bill 58 to create a real property tax exemption for alternative energy improvements. This bill became effective October 1, 2009. The alternative energy property installed on a building, property, or land is exempt from property taxes for 25 years. For the purposes of this property tax exemption, alternative energy sources include solar, wind, hydropower, tidal, wave, solid waste and increased efficiency in fossil-fuel burning facilities. Energy sources based on fossil fuels, nuclear fuels or geothermal energy are not eligible for this exemption.

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City and County of Honolulu - Solar Loan Program

The Honolulu Solar Loan Program is offered by the City and County of Honolulu. The program offers zero-interest loans to income-eligible homeowners for the installation of solar water heating and photovoltaic systems through the City's Rehabilitation Loan Program.

The zero-interest loans are available for single-family homes and individual condominiums with home owners association approval.. For loans over $10,000, a mortgage lien will be secured on the property. Additional repairs such as re-roofing work, etc. may be included in the installation work depending on the City inspection. Qualification is dependent on income level (guidelines available on program website). The program is designed to

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Energy Efficiency Portfolio Standard


Hawaii enacted legislation (HB 1464) in June 2009 that established an Energy Efficiency Portfolio Standard (EEPS). Hawaii's EEPS and Renewable Portfolio Standard (RPS) are related. Until January 1, 2015, energy efficiency was included in Hawaii's RPS. However, beginning in 2015, energy efficiency and displacement or offset technologies were no longer be eligible to fulfill Hawaii's RPS; these technologies became part of the separate EEPS. Displacement or offset technologies include solar water heating, seawater air conditioning district cooling systems, and solar air conditioning. Energy efficiency technologies defined by the RPS include heat pump water heating, ice storage, ratepayer-funded

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Farm and Aquaculture Alternative Energy Loan

In July 2008 Hawaii enacted legislation (HB 2261) which created a loan program for agriculture and aquaculture renewable energy projects. Farmers and aquaculturists may receive loans for projects involving photovoltaic (PV) energy, hydroelectric power, wind power generation, methane generation, bio-diesel and ethanol production. Loans may provide up to 85% of the project cost (up to a maximum of $1,500,000) for a term of up to forty years. To be eligible, the applicant must be a qualified farmer or aquaculturist with a sound credit rating and the ability to repay the loan, as determined by the Department of Agriculture.

These renewable

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Note: This program is closed to new applications. The summary below is for informational purposes only. 

In September 2009, the Hawaii Public Utilities Commission (PUC) issued a decision that established a feed-in tariff in Hawaii. The feed-in tariff is offered by the three investor-owned utilities: HECO, MECO and HELCO. The rates for the feed-in tariff, schedule, and standard interconnection agreements were approved on October 13, 2010. This program will be reviewed by the PUC two years after the start of the program and every three years thereafter. The FIT for Tiers 1 and 2 opened November 17, 2010 for HECO

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Green Infrastructure Bonds

In July 2013, Hawaii enacted legislation allowing the Department of Business, Economic Development, and Tourism to issue Green Infrastructure Bonds to secure low-cost financing for clean energy installations, including both renewable energy and energy efficiency measures. The bond proceeds will be used to fund the on-bill financing program being developed by the Public Utilities Commission.

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GreenSun Hawaii

The GreenSun Hawaii program works with various lenders throughout Hawaii to offer financing for renewable energy and energy efficiency upgrades. Through the program, homeowners may be eligible to finance Energy Star refrigerators, Energy Star air conditioners, solar water heating systems or heat pumps, and solar photovoltaic systems.  Non-residential property owners may be eligible to finance lighting retrofits or upgrades, air conditioning, solar water heating systems, solar photovoltaic systems, and windows. An energy audit is required for non-residential property owners.

GreenSun Hawaii is a loan loss reserve fund developed using funds from the The American Recovery and Reinvestment Act of 2009

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Hawaii Energy

Hawaii Energy is a public benefits fund (PBF) funded by a surcharge on utility bills that is based on a percentage of total utility revenue. The PBF pays for a number of clean energy incentive, rebate, and exchange programs. For more information on specific programs, visit the Hawaii Energy website.

The percentage of total utility revenue is used to establish a target budget for the PBF. The surcharge is set on a cents per kilowatt-hour ($/kWh) basis to meet the target budget. The surcharge is determined by dividing the target budget (based on a percentage of total utility sales)

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Hawaii PACE program

Note: In 2010, the Federal Housing Finance Agency (FHFA), which has authority over mortgage underwriters Fannie Mae and Freddie Mac, directed these enterprises against purchasing mortgages of homes with a PACE lien due to its senior status above a mortgage. Most residential PACE activity subsided following this directive; however, some residential PACE programs are now operating with loan loss reserve funds, appropriate disclosures, or other protections meant to address FHFA's concerns. Commercial PACE programs were not directly affected by FHFA’s actions, as Fannie Mae and Freddie Mac do not underwrite commercial mortgages. Visit PACENow for more information about PACE financing

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Hawaii Solar Installation Rights

Hawaii law prohibits the creation of any covenant or restriction contained in any document restricting the installation or use of a solar energy system on a residential dwelling or townhouse. Furthermore, Hawaii requires homeowners associations to adopt rules that provide for the placement of solar energy systems and do not unreasonably restrict the placement. In July 2010, SB 2817 was enacted that clarified this requirement and required homeowners associations to pass rules by July 1, 2011 in accordance with this requirement. This legislation states that homeowners associations' rules and regulations cannot "render a solar energy device more than 25 per

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Interconnection Standards

Hawaii has established simplified interconnection rules for small renewables and separate rules for all other distributed generation (DG). For inverter-based systems up to 10 kilowatts (kW) in capacity, there is a simple application process for interconnection. Systems must meet all applicable performance and safety standards from the Institute of Electrical and Electronics Engineers, Underwriters Laboratories, National Electric Code, and where applicable, public utilities commission rules.  For other smaller systems, there are simplified interconnection procedures for net metered systems powered by solar, wind, biomass and hydroelectric up to 50 kW. 


Two dockets were opened in 2006 to streamline interconnection procedures

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KIUC - Solar Water Heating Loan Program

Through a partnership with Kauai Community Federal Credit Union (KCFCU) and Kauai County Housing Agency (KCHA), the Kauai Island Utility Cooperative (KIUC) provides qualifying members with zero-interest loans for solar water heating systems. The loan is available for installations of new systems, or to replace solar water heating systems that are over 15 years old and no longer work.  KCHA, with funding from the Community Development Block Grant Program, and KCFCU provide funding for the loans. KIUC pays the interest, markets the program and verifies that systems will meet Energy Wise program standards for sizing and installation.

Participants must repay

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KIUC - Solar Water Heating Rebate Program

Kaua'i Island Utility Cooperative's Commercial Energy Wise Program began in 1998. Participants will receive an energy use analysis and screening for the installation of cost-effective energy saving devices, including solar water heating systems. Customers are eligible for a flat $1,000 rebate for each solar water heating system installed.  The rebate is available for installations of new systems, or to replace solar water heating systems that are over 15 years old and no longer work.

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Net Metering

Note: The Hawaii Public Utilities Commission (PUC) voted to end net metering in October 2015. In its place, the PUC adopted two interim tariff options: a grid-supply option and a self-supply option. Customers who submitted net energy metering applications prior to the termination of net metering will have the option of continuing with traditional net metering. 

The interim tariffs were replaced in 2018 by two new tariffs: Customer Grid Supply Plus (CGS Plus) and Smart Export.The PUC also approved the utilities' Community Based Renewable Energy tariffs in 2018. 

Customer Grid Supply Plus

The CGS Plus Tariff is available on a

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Priority Permit Processing for Green Buildings

Hawaii Revised Statutes (HRS) §46-19.6 requires each county agency that issues building, construction, or development-related permits to establish a procedure for priority processing of permit applications for construction projects incorporating energy and environmental design building standards. The priority processing will be provided at no additional cost.

Buildings eligible for priority processing are those that meet the "energy and environmental design building standards". These standards can be achieved by earning either a Leadership in Energy and Environmental Design (LEED) silver rating, a two Green Globes rating, or a comparable state-approved, nationally recognized, and consensus-based guideline, standard, or system.

For further information, contact

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Renewable Portfolio Standard


Under Hawaii's Renewable Portfolio Standard (RPS), each electric utility company that sells electricity for consumption in Hawaii must establish the following percentages of "renewable electrical energy" sales:

  • 10% of its net electricity sales by December 31, 2010;
  • 15% of its net electricity sales by December 31, 2015;
  • 30% of its net electricity sales by December 31, 2020;
  • 40% of its net electricity sales by December 31, 2030;
  • 70% of its net electricity sales by December 31, 2040;
  • 100% of its net electricity sales by December 31, 2045;

Existing renewables may be counted in the total. In addition, an electric

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Renewables and Efficiency in State Facilities & Operations

In May 2006, Hawaii’s governor signed HB 2175 addressing renewable energy, energy efficiency, and alternative fuels in state facilities and operations. This legislation also detailed requirements for renewable energy and energy efficiency in Hawaii’s public schools. 

State law requires energy efficiency and environmental standards for state facilities, motor vehicles, and transportation fuels. Each state agency must meet the following requirements to the extent possible:

  • Buildings must be designed and constructed to meet the Leadership in Energy and Environmental Design (LEED) “Silver” standard, the two green globes rating system, or another similar guideline, standard, or system that is approved by the
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Residential Energy Disclosure

A residential property owner is required to disclose electricity costs for the most recent three-month period in which the property was occupied as a condition of selling it. No proof or copies of the electricity bills are required, but sellers must make a "good faith declaration."  Energy legislation (HB1464) added this requirement to Hawaii's existing Mandatory Seller Disclosures in Real Estate Transactions law in 2009.

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Residential Energy Efficiency Rebate Program

As part of its Residential rebate program, Hawaii Energy provides rebates to residences for heat pump water heaters, central air conditioning system tune-ups, refrigerator trade-ups, ceiling fans, CFL light bulbs and other improvements. These rebates are available to residential electric utility ratepayers on Hawaii Island, Lanai, Maui, Molokai and Oahu only. In order to be eligible for this rebate, residents must live in their homes year round and purchase a program approved piece of equipment. Applications must be postmarked no more than sixty days after equipment purchase. Please allow 6 – 8 weeks for processing. Interested customers can view a list

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Solar and Wind Energy Credit (Corporate)

Originally enacted in 1976, the Hawaii Energy Tax Credits allow individuals or corporations to claim an income tax credit of 20% of the cost of equipment and installation of a wind system and 35% of the cost of equipment and installation of a solar thermal or photovoltaic (PV) system.* 

For solar thermal water heating systems, the maximum allowable credits are as follows:

  • Single family residential property is eligible for a credit of 35% of the actual cost or $2,250, whichever is less;
  • Multi-family residential property is eligible for a credit of 35% of the actual cost or $350 per unit
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Solar and Wind Energy Credit (Personal)

Originally enacted in 1976, the Hawaii Energy Tax Credits allow individuals or corporations to claim an income tax credit of 20% of the cost of equipment and installation of a wind system and 35% of the cost of equipment and installation of a solar thermal or photovoltaic (PV) system.* 

For solar thermal water heating systems, the maximum allowable credits are as follows:

  • Single family residential property is eligible for a credit of 35% of the actual cost or $2,250, whichever is less;
  • Multi-family residential property is eligible for a credit of 35% of the actual cost or $350 per unit
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Solar Contractor Licensing

Hawaii offers several specialty licenses for solar contractors through Hawaii’s Department of Commerce and Consumer Affairs. The following specialty licenses are available: Solar Power Systems Contractor (C-60); Solar Energy Systems Contractor (C-61); Solar Hot Water Systems Contractor (C-61a); and Solar Heating and Cooling Systems Contractor (C-61b). These licenses require business and trade exams plus four years of experience. An Electrical Contractor (C-13) license is required to install photovoltaic systems other than low voltage DC wiring and it includes the work of the C-60 solar power systems contractor. Plumbing contractors (C-37) are also allowed to install solar hot water heating systems.

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Solar Water Heater Rebate

Hawaii Energy, a third-party administered public benefits fund, provides incentives for energy efficiency and conservation to customers of the Hawaiian Electric Company (HECO) and its subsidiaries, Maui Electric Company (MECO) and Hawaii Electric Light Company (HELCO). This incentive is available for installations on the islands of Oahu, Hawaii, Maui, Lanai and Molokai.

Residential utility customers in Hawaii, Honolulu, and Maui counties can choose between a direct upfront rebate of $500 or a $750 interest rate buydown. They cannot receive both. The upfront incentive is paid to the installer and deducted from the customer's final bill. The interest rate buydown

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Solar Water Heating Requirement for New Residential Construction

In June 2008, Hawaii enacted legislation, SB 644, with the intent to require solar water-heating (SWH) systems to be installed on all single-family new home construction, with a few exceptions. This legislation had several errors that were corrected by legislation passed during the 2009 legislative session. In June 2009, HB 1464 was signed by the governor and addressed the errors in the previous solar water heating requirement.

As of January 1, 2010, building permits may not be issued for new single-family homes that do not include a SWH system. The state energy resources coordinator may provide a variance for

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