Hawaii Solar Tax Credits, Incentives and Rebates 2023

What is a Solar Tax Credit?

In the Aloha State, a solar tax credit is a financial incentive to encourage green energy. It offers a reduction in state or federal income taxes for those investing in Hawaii solar panels. This incentive, part of renewable energy technologies income initiatives, reduces system costs, making solar installation in Hawaii more affordable.

Renewable Energy Technologies Income Tax Credit in Hawaii

Hawaii, known as the Aloha State, actively rewards residents who champion green energy. Their renewable energy technologies income tax credit generously covers up to 35% of equipment and installation expenses for both solar thermal and electric systems. Once your system is up and running within the year, you can avail of a credit cap of $5,000 for electric setups and $2,250 for solar thermal ones.

If the tax credits exceedthe taxpayer’s yearly income tax liability, they can be carried over to future years. Additionally, as of last July, Hawaii introduced an option for taxpayers to claim the credit as a direct refund. However, this option comes at a 30% reduced value, unless specific income conditions are fulfilled.

Federal Investment Tax Credit

Hawaii’s solar panel enthusiasts can benefit from a generous federal tax incentive. The federal solar tax credit offers a 30% reduction on equipment and installation costs for both solar thermal and electric systems. You can claim this credit in the year your system starts operating. If you have leftover credits, you can backtrack a year to use up to 50% or roll them over for up to 15 years. See the details on IRS Form 3468.

How to Calculate Hawaii Solar Tax Credit

Calculating the Hawaii solar tax credit is essential to know how much you can save. Begin by determining the total cost of your solar installation. Then, apply the percentage specified under the renewable energy technologies income tax (RETITC) for that year. For instance, if you installed Hawaii solar panels in 2023, you would apply the Hawaii solar tax credit 2023 rate. These solar tax credits can be combined with the federal solar tax credit, amplifying your savings. By understanding these incentives, you’re one step closer to maximizing green energy benefits in the Aloha State.

Our insights into Hawaii’s solar tax incentives come from the SEIA Guide to Federal Tax Incentives for Solar Energy. For a detailed breakdown, download the guide using the link provided. Always consult a tax expert for personalized advice. You can also e-mail your tax questions to Mimi Hu at Kawahara & Company, CPAs, LLC Certified Public Accountants – for more info. Form 5695 Federal | Form 3468

Please note that these forms are for the 2019 tax year and IRS does not offer the 2020 versions at this time, so they will have to be updated later and each year. Please go to www.irs.gov and tax.hawaii.gov websites to download most current PDF forms.

Estimated Solar Savings in Hawaii

In the Aloha State, harnessing the power of green energy through Hawaii solar panels can lead to significant savings. To estimate your solar savings, consider the cost of your system, then subtract both the Hawaii solar tax and federal solar tax credits. Remember, with renewable energy technologies income tax incentives and solar tax credits, the effective system cost drops considerably. Factor in the reduced electricity bills over time, and the financial benefits of solar installation in Hawaii become even clearer. Embrace solar incentives and see how much you could save money on your energy bills.’

Frequently Asked Questions