A new state law caps Hawai'i's 35% solar tax credit starting in 2027 and phases it out by 2030. But Governor Green's executive order shields every system placed in service in 2026. That makes this year a genuinely rare window.
If you've been following Hawai'i solar news this year, you've had whiplash. First the federal 30% credit disappeared at the end of 2025. Then, this spring, the state legislature passed a law that reshapes Hawai'i's own solar tax credit — the one that's helped island families go solar for decades. And then, just as installers were bracing for chaos, Governor Josh Green stepped in with an executive order that protects every system placed in service in 2026. If that sounds confusing, you're not alone. Here's what actually happened, what it means for your wallet, and why the window you're standing in right now matters.
Hawai'i's Renewable Energy Technologies Income Tax Credit (RETITC) has long been one of the most generous state solar incentives in the country: 35% of your system cost, up to $5,000 for a residential PV system. Until now, there was no statewide limit on how much the program could pay out in a given year.
That changes with Act 24, passed by the legislature in 2026. The law introduces a statewide annual funding cap of $40 million for the credit, shrinks what's available for rooftop and commercial-scale systems, and puts the whole program on a path to end entirely by 2030. Once that $40 million is claimed in a given year, it's gone — meaning future homeowners could install solar in good faith and find the credit pool already empty by the time they file.
When Act 24 passed, industry groups warned that more than $400 million in ongoing solar projects across the islands could be thrown into limbo — homeowners and businesses that signed contracts expecting the full credit, suddenly facing a cap. In response, Governor Green signed an executive order confirming that renewable energy systems placed into service during the 2026 calendar year will not be subject to the $40 million annual cap.
Read that again, because it's the single most important fact in Hawai'i solar right now: if your system is installed and placed in service in 2026, the cap does not apply to you. You claim the full 35% state credit (up to $5,000) with no risk of the funding pool running dry. From January 1, 2027 onward, every new system competes for a limited pot — and that pot shrinks toward zero by 2030.
While the incentive picture tightens, the cost of doing nothing keeps climbing. Hawai'i's average residential electricity rate reached 46.6¢ per kWh this summer — the highest in the nation and roughly 2.5 times the national average of about 18.8¢. For a typical O'ahu or Maui household, that's hundreds of dollars a month flowing to the utility.
The grid is changing too. In July, regulators approved contracts for two more big solar-plus-storage projects — Pu'uloa Solar at Pearl Harbor on O'ahu (6 MW with 30 MWh of storage) and Kūihelani Solar Phase 2 in Mā'alaea on Maui (40 MW with 160 MWh of storage). Hawai'i's clean-energy future is being built either way. The question for homeowners is simply whether you keep renting your power at record rates or start producing it on your own roof while the best incentive window is still open.
The executive order protects systems placed in service during the 2026 calendar year — not systems you merely signed a contract for. That distinction matters, because a Hawai'i solar install isn't an overnight project. Between site design, Honolulu or Maui County permitting, HECO interconnection review, and installation scheduling, a typical project takes two to four months from signed agreement to permission to operate — longer if permitting queues back up, which they historically do when a deadline approaches.
Starting the process in late summer or early fall gives you comfortable margin. Waiting until November or December means betting your $5,000 credit on holiday-season permitting speed. And if you're adding a battery — which nearly every new Hawai'i system now includes — HECO's BYOD Plus program still pays an upfront incentive of $2,000 per battery ($4,000 for low-to-moderate income households), stacking neatly on top of the state credit.
2026 is shaping up to be the last clean, uncapped year for Hawai'i's state solar credit. After January 1, the 35% credit becomes a limited resource that can run out; by 2030 it's scheduled to disappear. Meanwhile, electricity rates just set another record, and battery incentives remain strong. If solar has been on your someday list, the math — and now the law — say someday is this year.
We're not fans of pressure tactics, and this isn't one. It's a calendar fact: systems placed in service in 2026 are protected, and systems after that aren't. Our job is to make sure your 'ohana gets the full benefit while it's still simple to claim.
Full 35% state credit, cap-exempt for 2026 installs, plus battery incentives — from your Hawai'i neighbors since 2007.
