Due to its consistent sunlight throughout the year and its proximity to the equator, Hawaii is an ideal place to go solar!
The greatest benefit of adding solar panels to your home is the cost savings; but, there are very appealing environmental benefits as well, says Zach Englert, Sales Director at Sunetric, which is headquartered in Kailua, but operates statewide.
The Battery System
In 2018, Hawaiian Electric (HECO) began offering a program called Customer Grid Supply Plus.
Under this program HECO allows you to “bank” kilowatt hours for use at night. Customers can then use those kilowatt hours at a 10 cent per hour discount.
Most of Sunetric’s solar installations now use battery storage, enabling customers to charge the battery during the day and then draw from it overnight, Englert says.
“If I can store my kilowatt hour, I can use my kilowatt hour instead of pulling it back at a discount,” he says.
As technology for solar system batteries continues to improve, they are gaining even more popularity here in Hawaii.
This is no surprise as Hawaii has long focused on conservation of natural resources.
“Hawaii is always leading the way in terms of clean energy,” Englert says.
How much homeowners save per month depends on a variety of factors, such as the financing they choose to pay for the solar system, Englert says.
“When we design solar panels, we design for full-offset of the energy usage in the home,” says Englert.
Therefore, on a $0 down loan, you can realistically expect to save 20-30% per month on your electricity bill. If you pay cash for the panels, you can eliminate the bill, except for the connection fee plus any excess usage fees from the utility company.
But it is the long term investment by which you can realize the biggest savings, according to Englert.
HECO’s rates increase an average of 5.5% per year. If you pay $3600 per year for electricity now, factoring in a modest 2-3% increase per year, in 25 years, you can expect to pay $10,000 a year. Savings on that size of bill are even more significant.
Paying for Your Solar System
There are numerous ways to finance a solar system, including a home equity line of credit or a no-money down loan. Loans can include an 18-month or two-year introductory period in which payments can be deferred until you realize the tax benefits over multiple tax seasons.
Solar systems will yield a 30% federal tax credit and up to 35% from the state. You can expect to realize an estimated $10,000 in state tax credits for a $50,000 solar system, which will cover the costs of the system in six to seven years.
If you’re thinking about going solar, there’s no time better than this year. Federal tax credits will decrease to 26% in 2020 and 22% in 2021, before zeroing out in 2022.
If you begin the process and pay 5% down by the end of 2019, you can lock in the 30% tax credit.
In addition to tax credits, home values often appreciate with the addition of solar panels, according to Englert.
“Studies show that your home sells for approximately $4.50 more per watt of solar on your roof,” Englert says. “In Hawaii, that would equate to an approximately $40-$50K home value increase.”
The benefits of solar power are well-known. Generating electricity with solar power rather than fossil fuels can dramatically reduce greenhouse gas emissions and reduce your carbon footprint. Greenhouse gases, which are produced when fossil fuels are burned, contribute to rising global temperatures and climate change.
In Hawaii, there is even more reason to go solar, since oil has to be shipped here, which uses even more energy.
“In Hawaii, we are still about 75-80% oil dependent, so it’s expensive and bad for the environment,” Englert says. “You are no longer contributing to that with a solar plus energy storage system and you are leaving a legacy of clean power for future generations.”
There are many reasons to invest in PV panels. If you have not already made the investment, now may be a good time.
Photo 1: A solar system (PV panels) installed by Sunetric
Photo 2: An energy storage system installed by Sunetric