Federal Tax Credit

Updated 5/14/2026

The Federal Tax incentive has been phased out for residential cash purchases as of December 31, 2025. The Federal Tax incentive is still available for lease options and commercial projects. Call or contact us directly for more information and to see if your project qualifies. For residential solar we now offer the Participate Energy 6 year lease to own option that offers customers up to 40% off the total cost of a solar system paired with battery storage. This is a excellent option for many homeowners, instead of Tax credits, now the discount is realized in the upfront total price of the project.

Hawaii State Tax Credit

Updated 5/14/2026

Hawaii currently has SB3125 moving toward passage.
If this becomes law it will have the following effect on the Hawaii State RETITC Tax credit.

The bill significantly reduces Hawaii’s 35% Renewable Energy Technologies Income Tax Credit (the main state incentive for solar panels, solar water heating, and battery storage):

• $40 million annual statewide cap on all claims (a 60–70% reduction from recent levels).
• Adds income limits — higher earners may be restricted or ineligible.
• Requires new certification processes.
• The credit is phased out completely by 2030–2031.

Important note: The changes may apply retroactively to some 2026 projects, creating uncertainty for people already planning or installing solar.



The following below is currently how the RETITC is currently operating until the new changes take effect.

In Hawaii the state tax credit is up to 35% of the system cost. Typically this is $1,000 per kilowatt watt of the size of the solar system.

The State of Hawaii considers each 5KW of solar system size a separate solar system, if you have a 8.5 KW sized system this is accounted for as two systems, you are guaranteed 8,500$ in State Tax rebates, depending on your Income and Tax liability you may be eligible for up to 10,000$ in rebates.

Combined with the Federal credit this can save you up to 65% of the total cost of the system!

The state tax credit can be used against your income liability year after year until exhausted.

You also have the option to take a cash rebate, this is beneficial for customers that are out of state residents or that do not have a Hawaii income tax liability.  

The cash rebate is around 24% less than the tax credit. 

Consult with your CPA to see which option is the most beneficial for your situation and come up with a strategy to best utilize the tax incentives.   

Renewable Energy Technologies Link : http://tax.hawaii.gov/geninfo/renewable/