What is Hawaii’s Net Energy Metering (NEM) policy and is it still important in 2022?

What is net energy metering in Hawaii?

Net energy metering (NEM) is an electricity policy in the United States that allows customers with solar photovoltaic systems (PV) to offset the cost of their electric bill by receiving compensation for the excess electricity they generate. NEM has been a key driver of the rapid growth of the residential solar market in the United States.

For grid-tied photovoltaic (PV) systems, NEM is the difference between the amount of electricity sent to the grid by the PV system and the amount of electricity the PV system owner purchases from the grid over the course of a year.

Hence, the “net” gain in electricity provided financial incentives, and even if you used more than you produced, you still drastically lower your electricity bill than what it would be without PV panels.

Hawaii’s residential solar market continues to contract, a phenomenon the industry largely attributes to policy changes that went into effect after the state ended net energy metering in 2015.

However, the push for net energy metering to be reinstated in Hawaii as Senate Bill no. 845. To read more about the bill, visit https://trackbill.com/bill/hawaii-senate-bill-845-net-energy-metering-electric-utilities-net-energy-producers-compensation/2176608/ 

Why was net energy metering discontinued in 2015?

Net energy metering (NEM) is currently discontinued in Hawaii for a variety of reasons. Firstly, Hawaii has a very high penetration of rooftop photovoltaic (PV) systems, which has led to concerns about the impact of NEM on the state’s grid. The implication being it would require a significant investment in infrastructure upgrades.

Secondly, Hawaii has a unique electric grid structure, which includes a large number of islands that are not interconnected. This makes it difficult to implement NEM in a way that would be fair to all customers. Finally, the high cost of electricity in Hawaii makes NEM less attractive to customers than it is in other states.

Is it still worth it to get solar panels for my Oahu or Kauai home in 2022?

Most definitely. The State of Hawaii Renewable Energy Technologies Income Tax Credit (RETITC) allows Hawaii residents a 35% state solar tax credit for residential solar systems with a maximum credit of up to $5,000 per system.

With the 26% federal tax credit plus 35% state tax credit available, solar incentives in Hawaii are definitely worth it, along with all the other great reasons to get solar. Solar incentives are so high in Hawaii because the state does not produce its own natural gas itself, including gas, oil and coal.

The federal Solar Investment Tax Credit (ITC) amount will decrease over the next few years, starting in 2023, but will remain at a 26% credit for residential solar systems installed before December 31, 2022. So, the sooner you install a photovoltaic system in Hawaii, the less it will cost and the more you will save.


Solar panels that are directly attached to your roof will typically be covered under your homeowners insurance policy. However, there are some instances where you may need to purchase additional coverage or have a separate policy specifically for your solar panels. If you have a solar panel system that is not attached to your home’s roof, you may need to purchase a separate policy to cover it. This could include ground-mounted systems, wall-mounted systems, or systems mounted on a carport. Talk to your insurance agent to find out what coverage you need and make sure your solar panels are protected.

Hawaiian Electric HECO Battery Bonus

Hawaiian Electric will pay a cash incentive and provide bill credits for customers on Oahu to add energy storage (a battery) to an existing or new rooftop solar system. These perks will help move Hawaii toward its goal of 100% clean energy by 2045 and add more renewable resources to the grid in the short-term when the AES coal-fired plant is retired in September 2022.

  • – Customers accepted in the program for the first 15 MW of committed capacity will receive $850 per kilowatt (kW). (For example, 5 kW would yield a $4,250 payment.) Customer must fulfill the obligation discussed below to receive the full amount.
  • – Customers who sign up for the next 15 MW of committed capacity will receive $750 per kW.
  • – Customers who sign up for the last 20 MW of committed capacity will receive $500 per kW.

Need more consultation on PV or financial incentives for solar?

Getting solar is one of the most environmentally responsible choices you can make. 

STI Solar Oahu can help with the purchase and installation process if you’re currently in the market for a solar energy system for your home. Our licensed and insured solar panel professionals will ensure that your solar panels are correctly installed on your home. Call us today at 808-664-1052 or visit our contact us page to request a free quote.