The Economics of Solar Energy in Hawaii
Hawaii has quietly become one of the top solar states in the US but overall market penetration in Hawaii is nowhere near where it should be. Much of this is simply basic lack of understanding of the economics of going solar in Hawaii which as you will read are favorable. The national average cost of energy for U.S. households is approximately 12 cents per kilowatt, compared to 33 cents in Hawaii. This translates to a monthly energy bill of more than $300 in the state. Typically, energy bills are determined by the rate paid per household rather than the amount of energy used. Higher rates can be lowered with alternative options such as solar energy.
Average costs for Hawaii solar energy can range between $15,000 and $25,000 after rebates and other incentives are applied. While this may seem like a high cost to pay for solar energy, the savings you can realize in electrical bills make this a small price to pay. The ginal costs for a Hawaii solar power system usually depends on which rebates and utility incentives are applicable to your situation. With a choice of qualified Hawaii solar installers, you can expect to receive the best return on your investment.
For some households, installing a solar power system is an expensive ticket item even with the incentives and rebates. Financing options are available to provide additional assistance for lowering energy costs and consumption. These options can help to offset the initial costs of installing the system. Generally, there are two ways to finance a solar power system. With enough equity, you could apply for a home equity loan to cover installation costs. In this instance, you can simply pull equity out of your home to finance your new solar system anticipating that your new home solar system will increase the value of your home. In fact, studies have shown that solar can increase the value of your home between $20-40,000. Another popular option is to lease the usage of solar panels. A solar lease has little to no upfront installation costs. You only pay a monthly fee that includes use of the solar system and the energy bill. This option protects you from fluctuating energy rates.
One downside to having a solar lease is that you may not qualify for the rebates and tax credits. Currently, Hawaii has several different types of rebates and incentives to encourage homeowners to move towards solar energy. The type of rebate or tax credit is based on whether you select either a solar panel or thermal system. For example, as a homeowner of a single family residence, you can receive a 35 percent tax credit or $5,000 for the costs to install a solar panel system. You can also receive a 35 percent tax credit or $2,250 for a solar thermal system. The Hawaii solar power tax credit can also be used with the tax credit available from the federal government. This offers further reduction in your tax liability to make solar installation more affordable. Additionally, you have the option of claiming a refund rather than a tax credit. There are several other rebates available to residents for solar thermal systems. A $750 rebate is available from the Hawaii Energy Efficiency Fund. The Hawaii Electric Company pays a $1,000 rebate through its Energy Solutions Program.
In addition, Hawaii is also one of the few states in the U.S. that has adopted a feed-in-tariff system for solar energy. A feed-in-tariff is essentially where your utility company has to pay you cash for the amount of energy your system produces above the amount you consume. Currently in Hawaii, participating utility companies (HECO, MECO and HELCO) are paying $0.218/kWh for solar panel systems that are less than or equal to 20 kW; and $0.189/kWh for solar panel systems that are greater than 20 kW and less than or equal to 500 kW.In fact, you can see how solar in Hawaii might work below if you were to purchase solar a system:
Now that you can see that solar makes some sense, what is the process of going solar? Generally, the installation process for Hawaii solar energy involves several major steps: selection, assessment, financing options, securing permits and installing the system.
First, you need to find a local HI solar installer which can be a daunting process. If you want a simple way to find a Hawaii solar installer and see if they service your area, Solar Hawaii can put you directly in touch with these and other reputable and professional Hawaii solar installers who can help you go solar easily and economically.
Once you have selected an installer, they will then perform a complete an assessment of your home. Generally, the installer you choose will examine the roof of your home and ask questions about your energy usage. This assessment helps to determine which solar system is appropriate for your home.
A professional HI solar installer can also offer guidance on the best way to finance a new system. He or she will discuss the various rebates and financing options available. Typically they request the prior 12 months of your electric bills and then they can put together a comprehensive financial package that can tell you how much you can save depending on whether you finance a system or lease one.
Next, certain areas require permits before solar panels are installed. The professional installer can secure the permits on your behalf.
Finally, the installer begins installation that is usually complete within 72 hours. Inspections and approvals are completed after the system is installed. Now you can begin to enjoy your new life of steady, predictable, low energy bills with solar!