Hawaii Residential Solar Incentives

The Hawaii legislature has taken an extremely proactive approach to using solar energy to make the islands self sufficient. Any residential or commercial structure that requires a building permit in the state of Hawaii requires a solar hot water heater. Period! Applause! Applause! ATTENTION CONTINENTAL 48: is how you grow solar!!

Building exceptions are made for insufficient sun, or minimal water use, but Hawaii understands that solar is an investment, HECO, MECO and HELCO utilities fully participate and written into the legislation is that the payback and upfront cost of installing the solar system must be recouped within 15 years… because Hawaii has written into law a return on investment calculation, it has cleared articulated that solar is not only environmentally friendly, self sufficient, but a wise investment!

Because Hawaii has great sun exposure, but a fresh water shortage, the government gives heightened incentives so solar thermal systems over traditional photovoltaic solar electric systems that are used for all forms of energy and not just heating water. A photovoltaic solar system is Hawaii, if used as your main energy source qualifies for a $2,250 state rebate. A Solar thermal system, just for heating hot water qualifies for a $5,000 state rebate.

All Hawaiian Island utilities, HECO, MECO, and HELCO have a uniform net metering standard, meaning that if your solar system generates extra energy, the utility will store the energy for when you need it, such as at night. However Hawaii’s utility arrangement makes it even more important that you install an appropriate size system, because if you consistently generate more energy than you use, currently, the utilities will not reimburse you for that extra usage. We hope that legislation in 2010 and new Feed-in Tariff regulations will allow Hawaiians to sell the excess energy they generate back to the utility…the discussion has been around a set rate for the next 15 to 25 years… stay tuned.

Hawaii Solar Electric Loans

HECO, the Hawaiian Electric Company and the County of Honolulu have partnered to offer low interest loans, below a 2% APR to homeowners on Oahu for solar thermal (Water) heating systems. The city provides the funding and HECO performs the solar installation.

Maui County and the Maui electric Company provide no interest loans for solar thermal, and have an additional $1,000 rebate discount available.

Kauai County and the Kaui Island Utility Cooperative, KIUC, also has a 0% interest loan program for residential solar hot water systems. Commercial hot water is not included. Kaui will provide $800 in residential rebates, and up to 80% of equipments costs for commercial work.

For Hawaiians in rural area, solar, wind, geothermal, etc. over $10,000 are eligible for loans.

Cost of Going Solar in Hawaii

In addition to local rebates, incentives, and loans, the Federal Government offers a 30% tax incentive that bring the cost of most installations to sub 50% or retail price.

If you are with HECO, MECO or HELCO utilities, a solar hot water systems begins with a $1,000 cash rebate. Commercial residents receive a $125 deducted per kW and an addition $.05/kWh for remodels and $.06kWh for new buildings. Restaurants, hotels, and any business that used a lot of water can quickly see the benefit from, such favorable incentives!

Photovoltaic incentives receive a 35% credit regardless of residential or commercial properties.

Solar Installation Licensing Requirements in Hawaii

The Hawaii Department of Commerce and Consumer Affairs requires 4 years experience, passage of business and trade exam to receive an Electric Contractor’s, C-13 license, which is required to install pv systems. Solar Power Systems Contractor, C-60, Solar Energy Systems Contractor, C-61, Solar Hot Water Systems Contractor, C-61a, and Solar Heating and Cooling Systems Contractor, C-61b.

It is important to note, that a licensed electrician must certify that a photovoltaic solar system is properly connected to the utility and that the installation is functioning at peak performance. Having a solar contractors license in Hawaii still may require the expertise of a licensed plumber and electrician in many cases.

Hawaii’s Solar

Hawaii’s net metering program fosters the installation of pv systems by crediting 1.0% of each utility’s highest demand to residents following utility bills. The incentive was created to reward independent energy generation. Hawaiians know all about reducing the dependence on outside oil and solar is benefiting because of this realization. Hawaii does not seem to be stopping it’s efforts, and the state seems poised to continue incentivizing its residents to go solar!

DON’T INSTALL SOLAR IN HAWAII
WITHOUT READING THIS FIRST!

I know it’s long, but if you are considering solar in Hawaii, these are 14 MISTAKES to be aware of:

You see panels on roofs all around town, and are thinking, “is solar right for me?” The answer could be YES! But for many it is NO!

Look, of course, I want you to be “green” and protect the environment, but if you don’t have $10,000+ lying around and don’t qualify for financing, a Hawaii Solar Installation may not be for you. Solar energy in Hawaii makes sense when you own a home that gets good sun, have a utility bill over $100, and understand that solar is a good investment. Local, state, and federal government rebates, incentives and tax credits help subsidize the cost, but the bottom line without financing comes to an upfront, out of pocket investment that will take 5 to 10 years to payback, but after you break even, as much as 30 years of free energy is all yours!

Most Solar Installations are around $5 to $8 per watt in Hawaii. You can save upwards of $.50 to $2.00 a watt when installing solar as part of a group of just 3 or more home owners who leverage their buying power and combine forces to get a good deal. Before any rebates and incentives, an average 4kW solar system may cost $7 per watt to install- $28,000. Dropping the price per watt a quarter would result in $1,000 in savings BEFORE rebates. Each additional participant, # 2 to 10 will bring the group an additional $.10. to $.25 cents per watt discount per member. Compared to purchasing an identical system individually without the volume of a group, most group buy participants will save at $1,500-$5,000 with the discount being specific to the size of the group, time of year (busy or slow season?), your specific roof top conditions, size of the company, flexibility in coordinating an install date, whether you require financing, etc. Please remember, the price of the solar installation is only part of the equation.

Solar companies’ installation margins for an average size 4kw system range anywhere from 10-25% in consumer to company direct installations. Volume discounts allow contractors to lower their margins to around 5-10% in exchange for multiple jobs. Be aware that, not every company will offer financing to a group buy participant. Homes that require additional roof work, ground mount, etc. will incur additional fees individually; the price per kW is the common denominator between you and your group coop. Some timing flexibility is often requested by the contractor. There is never an obligation and you can leave the group at anytime. All contracts are executed directly between you and the contractor.

Each collective of group buy participants schedules its own meetings, conference calls, and communicates via email and Facebook directly. Deciding to install as part of a group or independently is the last step in making sure your solar install is optimal–the first step is RESEARCH! Do your homework!

#1) Cost Effective System Size. The majority of utility companies have tiered rates. The more you use, the more you pay, so if the cost of a 2kW solar system is close to half the cost of a 4kW system, and with 2kW you eliminate your usage from the most expensive tier, a system 1/2 the size, may reduce your utility bill by over 75%. On the flip side, shooting too low can cost tens of thousands of dollars in missed savings and installing too large of a systems (often ethically questioned up sells by sales people), results in the utility buying back excess energy at less than 25 cents on the dollar making you wish you got a smaller system…

#2) Watch for Old, Outdated Solar Panels. The majority of the cost of installing solar in Hawaii is in the panels, not all panels are created equal! In the last 5 years, panel technology has evolved dramatically and is part of the reason solar installations are on the rise. All solar installers have relationships with distributors/manufacturers/wholesales like Sunpower, BP, Sanyo, etc etc and often have surplus product, when the product is on the shelf, the situation is similar to selecting milk or eggs at the grocery store- double check the panels for freshness! This is becoming a big problem, because some installers purchased excess panels that have been lying around, and are now worth less on the market than the factory direct discount pricing they originally received from the manufacturer. Panels manufactured in 2010 are almost twice as efficient, have the potential to last longer.

#3) Internet Purchase Mistakes. If you choose to Do It Yourself, or want to cut costs by buying panels or materials over the internet, be very careful!!! Consult with an electrician or the installer prior to making any purchases. Panels on the web are cheap, good deals can be had, but the MAJORITY are too good to be true. And if you are curious about any of those make your own panels, or DIY kits, contact me and save some cash and I’ll share with you, free. The reality is that 99% of the population never succeeds in making a single watt of usable energy from DIY panel kits. Remember shipping solar panels to Hawaii can also involve additional state tax, and should you need to return the item, shipping ain’t cheap…

#4) Missing Warranty. Hawaii solar companies should provide 3 warranties: service, maintenance, and manufacturers. Double check that the individual installing the panels (not just the company) is properly certified, some warranties are void if the installer was not properly licensed. Solar is not cheap, and for a minimum one year, the company should make visits to the system and make sure it is performing at maximum efficiency. What happens if the company underestimated the amount of panels necessary, will they ad another panel at cost/free? Will they come and show you how to clean the panels the first time? What if the installation causes your roof to leak? Now what? Who’s responsible and for how long? What about shipping costs of defective merchandise? The labor of removing/reinstalling panels? Will your call be answered in 2 years, 20 years? Manufacturers guarantee the panels for a 20-30+ years, but what exactly do they guarantee? Are their additional warranties you can buy? Ask these questions before you install! If you talk to one of our experts, we’ll help you look for points in your agreement that most consumers are unaware of, such as sagging panels with insufficient space between the roof and the mount that may cause a shortened lifespan and over heat the panels.

#5) You Need Sunlight. You need the sun for solar, but you don’t get enough sun, but you really want solar… Hawaii solar conditions vary, depending on where in the state you live. Technology has made it possible to predict the output of solar panels with 95% accuracy using your specific homes roof, the amount of sun, fog, and other natural elements play a role. Wind energy, double pained windows, insulation, hot water heaters, new appliances, weatherization, and basic tips about how to read your energy bill may be better alternatives. An honest, reputable company will alert you to how much energy you can anticipate to generate in not optimal. Unfortunately, far too common consumers have systems installed that offset substantially less energy that anticipated; trees, fog, shading, roof orientation are the main causes. Consider non traditional ground or tower mounts, new windows, wall insulation, wind power, efficient appliances, better light bulbs, more efficiency water heating as options… There are so many solar installers in Hawaii because most homes have perfect solar conditions.

#6) Missed Rebate, Tax and Incentives Deadlines: It is YOUR responsibility to be aware of all Hawaii solar incentives you qualify for. The installer will help you and is knowledgeable in most cases, but identifying the different, local, municipal, state and federal opportunities to save, and the deadlines associates with each is your job ultimately. Certain incentives are time sensitive and tied to total installs in Hawaii during the year, so time is of the essence. Millions in solar incentives are not claimed every year.

#7) Maximize the Benefit of a Site Survey! Your free estimate is not free to the company, respect the installers time and effort and be prepared with everything required for an ACCURATE estimate including utility bills, survey of your major appliances, explanations for any seasonal shifts in usage, kids going to college, etc. Knowing the ballpark market price range of your solar system will allow you to concentrate your assessment of each contractor on quality.

#8) Check the License or have Nightmares!!! If the contractor does not volunteer their license # you should be on Alert! If their marketing materials, business cards don’t feature it, ask why? It is a mandate in many states to visibly display a license # and id. A license typically indicates proper bond, insurance, free of any liens, bankruptcies, or judgment. Research the contractor on the state website, DO NOT TRUST any third party to do this for you. If an unlicensed, uninsured installer falls off YOUR roof YOU may be liable for any injuries!

#9 ) Call References!!! So important… I can’t tell you how many times I’ve been surprised… Ask for 5 references, if the contractor balks, you should be on alert. Ask the provided references what would they do different if installing solar again? Don’t be shy to ask price details; past solar installation data affirms the Solar Sipper group buy program is responsible for significant savings. We have spoken to many consumers who are dissatisfied with a contractor–don’t skip over this task!

#10) Have your Expectation Documented on Paper: Documentation! Documentation! Documentation! A power survey conducted on a day with good sun and few clouds should evidence the amount of energy the specific system will produce when the sun is striking perpendicular to the panel. Should the sun strike at an angle less than perpendicular to the panel surface, then energy output is downgraded by the cosine of the angle between the sunlight and the perpendicular to the panel face. Estimates you receive must highlight the peak generating capacity and the result of this calculation for the solar system under good sun conditions in terms kW produced. Be sure to obtain the amount of energy a system will produce on an annual basis in kW hours. Energy produced directly correlates to sunlight received and should make room for seasonal variations, any annual output hypothesis should come with at least a 10% +/-. You better make sure this is written down for each estimate you receive… an estimate on faulty numbers is not much of an estimate at all and you will be sorry.

#11) Hidden Costs: Sales tax? Who pays the permit fee? Warranty insurance? What about the fees to connect to the grid? We have recently been hearing more and more “last minute” charge stories… be careful, especially in group buys where the margins are ultra slim.

#12) COMPETITION Equals Savings! Group buys that are offered EXCLUSIVE to one company only, and you don’t get to choose the contractor still end up saving most consumers money vs. installing without the benefit of group purchase power, however, because there is no direct competition between companies for your specific install, exclusive groups are paid an organizing fee for wrangling the herd, and true market forces are not in the homeowners favor. Consumers save when multiple companies compete for their business. By connecting directly with other HOMEOWNERS first, (not companies), and searching for an installer together- the entire market will be able to compete for your business and residential solar installation is at its cheapest. Connect with other homeowners to form a group buy.

#13) Know what to Expect: The Hawaii solar company you chose will begin by finding your roofs anchor beams, and connect “stand-off” posts that will be attached to racking where the solar panels will rest. There are new mounting techniques that don’t require penetration to the roofs anchor or support beams, but most solar installers will connect to stable roof beams and use sealants and flashings to prevent water damage. Once the panels are secured, they are wired together and the wiring is secured and passed down to the inverter. Your system design should take into account where the inverter will be mounted; most are by the utility meter, or in a garage. Efficient wiring is important, you will lose DC power if your wiring weaves around your house and roof before it reaches the inverter. Most solar installs take 1-2 days.

#14) Tax advice: Recently their have been reports of Hawaii Solar companies manipulating the Federal Tax Incentive to reflect the 30% deduction from the gross sum. As we interpret the statute, your actual deduction should be from the net total after state and local incentives have been applied. Carrying over a larger than reality deduction to your taxes could pose a problem, please see a professional for all tax related matters.

Getting a great deal on solar in Hawaii is easy! Get multiple estimates and connect with a group buy. When you are able to determine the market price for installing solar as an individual, compare the SAME size system, panels and installer quality to the group buy rate. When solar companies compete- you save. Make your intent to install solar known to the contractor; it sounds obvious, but if the company knows you’re serious, it will fight for your business.

The web is full of great info on solar, but their sure is a lot of it and not all of it is accurate or up to date, we are here to personally help YOU–we have helped 18 groups of home owners go solar in 2009 and want to help 100+ in 2010! Please use our free zip-code search directory to contact a contractor, connect to a group buy, or contact us if you have any questions or need a referral 866-491-8524 100% FREE.

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