Solar Energy Systems Are Here to Stay

In comes the new year … and out goes federal solar tax credits for Hawaiʻi homeowners.

Bleak, I know, but pros say not to worry yet.

What is the solar tax credit?

President George W. Bush signed Federal Solar Investment Tax Credit (ITC) into law in 2005, providing a 30-percent tax credit for both residential and commercial solar system installations. Since then, the percentage and capped dollar amounts have fluctuated, most notably in 2008 when the residential cap was removed.

Expenses covered by the ITC include solar photovoltaic (PV) panels, labor costs, solar batteries equal to or more than three kilowatt-hours (kWh) and sales tax on all eligible expenses.

However, the residential ITC expired on December 31, 2025, prompting homeowners to buy and install solar systems prior to the end of the year. While there is no repeal date for the Hawaiʻi state Renewable Energy Technologies Income Tax Credit, federal economic and administrative uncertainty is still plaguing the industry.

What homeowners can do

Luckily, there are still loopholes homeowners can take advantage of if you’re looking to purchase a system after the deadline.

“The 30-percent federal tax credit can be used through leases by companies that have leases [in 2026],” says RevoluSun Founder and Chief Innovation Officer Eric Carlson. ” … Because [leased companies] are a commercial entity, they can deploy these lease packages to residential homeowners.”

Through local investors, RevoluSun has also made it possible for lease payments to remain at a flat rate throughout the duration of the lease.

Other local companies are also creating green incentives, such as Hawaiian Electric Company’s BYOD (Bring Your Own Device) Plus program that uses monthly export credits to gradually decrease electric bills over time and Sunspear Energy’s $1,500 off every battery with the purchase of a new five kilowatt or greater solar installation offer.

In the meantime …

Although federal tax credits expired, Carlson stresses the solar industry is not dead, it’s simply “evolving.”

He says local solar companies are collaborating to find new ways to make solar affordable for the future and advises that investing in solar systems is still a smart way to save on electricity bills in the long run.

“[Hawaiʻi] has the highest price of electricity in the country,” he says. “… If you are struggling to make ends meet and you’re look[ing] [to] go down on your monthly budget … and you don’t have solar, it’s a great way to offset a large portion of your monthly expenditures.”

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This story appears in the January/February 2026 print issue of Ku‘u Home magazine.