Why Now Might Be The Ideal Time to Buy Solar in Hawaii?
More and more people in Hawaii are going solar as energy costs rise. The fall in the price of solar panels and increased government incentives for renewable energy means that now might be the perfect time to buy solar to help power your home or business. It also means that, if you’re ready to make this transition, you’ll get maximum financial benefits while reducing your carbon footprint.
Appealing Tax credits
Hawaii is the place that is known for the most expensive electricity rates in America. Residential customers in Hawaii pay almost $0.37 per kilowatt-hour (kWh) on average, a price that is considered a bit high causing people to adopt solar. In 2022, Federal Investment Tax Credit (ITC) or Federal Solar Tax Credit might be the best option to avail right now, which is 26 percent of the total cost of your solar installation (residential or commercial).
A customer can avail of tremendous financial benefits with this federal investment tax credit, a generous amount is credited after the submission of annual taxes returns.
This Tax credit was introduced in 2005 when President George W. Bush signed the Energy Policy Act which was converted into law. At the time of its enactment, it set out to support renewable electricity production and promote economic growth.
- You must be a US citizen and the owner of the solar system.
- System costs can be paid via cash or other financing options.
- Installation of a solar system must take place within the same calendar year that the tax credit is in effect.
- Only new installations are eligible.
Why 2022 might be the best option to claim Tax Credits?
By investing in solar now, you can save thousands of dollars on your energy bills over the next 20 years. The federal solar tax credit is scheduled to decrease from 26 percent down to 22 percent in 2023. With every passing year, there will be fewer incentives for homeowners to invest in their home’s energy efficiency, so this is a perfect time to install this green upgrade.
In financial comparison, if you install a solar system in 2022 worth $25000 then you’ll get $6500 in tax credits (26% of the cost). If you wait until 2023 to do it, then you’ll only get $5500 in tax credits (22% of the cost) which means you could have lost up to $1000 with no added benefit.
Additional rebates to encourage the use of Solar systems
Homeowners in Hawaii are now eligible for an additional rebate when they install a solar system, on top of the existing tax credit. This makes solar an even more attractive option for those looking to save money on their energy bills.
Instant rebate for solar water heating system:
If you’re installing a solar water heating system, you’ll be eligible for an instant $750 rebate from Hawaiian Energy and that can save you about 40 percent (around $600) a year in energy costs.
Renewable Energy Technologies income tax credit (RETITC):
Additional local tax credits and rebates like Renewable Energy Technologies income tax credit (RETITC) up to $5000 for purchasing residential solar systems are also available through various utility companies including Hawaiian Electric Company. These incentives make it possible for homeowners to lower their electricity bills with a minimal upfront cost.
The sunny weather of Hawaii is best for Solar Installations
With an average of 270 sunny days per year, Hawaii is an ideal place for solar panels. In fact, the state has plenty of peak sun hours available, making solar a very attractive option for residents. It also has a renewable portfolio standard that requires 40% of its power to come from renewable sources by 2030 and Hawaiian Electric Co. (HECO) is on track to reach this goal efficiently.
All the above factors make now the perfect time to buy solar panels in Hawaii. Whether you’re going off-grid or grid-tied, purchasing solar will save you money in the long run and can even pay for itself with HECO’s Eco-friendly programs.