top of page


How much does solar cost in Hawaii? The average cost of installing solar and batteries in Hawaii

Updated: Dec 20, 2021

Learn the average cost of installing solar and batteries in Hawaii!
What do solar panels cost in Hawaii?

Introduction: How much do solar panels cost in Hawaii in 2021?

When calculating the cost of solar and home batteries in Hawaii, it can be hard to get any exact cost. Understanding the cost of solar panels is essential for homeowners to decide if solar and batteries will be a sound investment for their home. Unfortunately, many solar companies intentionally hide the actual costs of solar from their customers.

Residential solar has many aspects that impact the end price for the customer. Some of these aspects, like the panels and batteries, are clear, but other things like financing fees are usually not disclosed.

At Alchemy Solar, we know that many people are looking into solar for the first time. We think it is essential for homeowners to understand what goes into the cost of solar panel systems. So let's take a look at the average cost for solar and battery systems in Hawaii.

What factors go into the cost of home solar and batteries?

When looking at the cost of installing solar and batteries at your home, it is first essential to understand what goes into the price. Unlike on the mainland, adding a solar battery is essentially mandated by Hawaiin Electric policies. So, before we get into the average cost of solar in Hawaii, let's look at what goes into the cost of adding a solar panel system.

How do solar panels, solar batteries (Tesla Powerwall and LG Chem), solar inverters, solar financing, and solar warranties impact the cost of solar
7 Factors Impacting The Cost Of Installing Solar and Home Batteries (Infographic)

How do solar panels impact the cost of a residential solar installation?

Tier 1 (high quality solar panels) provide longterm savings
High quality solar panels for the longterm value of a solar panel system

For the untrained eye, all solar panels essentially look the same. However, in reality, solar panels can vary significantly in performance, warranty, and quality. At Alchemy Solar, we focus on using only "tier 1 solar panels". We believe that when long-term efficiency and warranty strength is factored in, our tier 1 solar panels provide the best return on investment during the life of a solar panel installation.

Bloomberg NEF reviews solar panels to assess the investment viability of solar panels. According to the Bloomberg methodology, tier 1 panels are the ones that are the highest quality, made by financially secure companies, and the most likely to perform at the highest level for the most extended amount of time possible.

Many companies in Hawaii lack the relationships or financial strength to purchase the Tier One panels. Unfortunately, this leads to many companies not letting customers know who the panel manufacturer is or the expected performance of the panels. Because of the impact of saltwater damage on solar panels in Hawaii, withholding information about the contracted solar panels' quality is especially dangerous.

Sometimes these companies will show customers a low contract price but fail to educate the customers on the fact that between replacing broken panels and poor efficiency, the cost for the customer will be significantly higher than what is presented.

How do solar inverters impact the cost of a residential solar installation?

After the actual solar panels, the most critical part of a solar panel installation is the solar inverter. Solar inverters are responsible for converting the DC energy that the panels produce into AC energy used to power the home. Solar inverters directly impact solar savings by controlling how much usable electricity is produced when the sun rises.

Solar inverters are not ranked in tiers the same way solar panels are, but they vary significantly in terms of quality. At Alchemy Solar, we do our best to provide customers with Hybrid or micro-inverters. In addition, inverters like those produced by SolarEdge, have technology on each solar panel. This leads to better production, most robust monitoring, and identifying issues on a per panel level. These factors lead to our customer's solar system producing more electricity over the lifespan of the system.

Some other solar companies in Hawaii are not as focused on using the highest quality inverters. Often, these companies use central solar inverters. Central solar inverters converter the electricity produced by the panels from DC to AC power at one point. This one point leads to a lower cost but also creates a single point of failure and leads to lower electricity production.

Like solar panels, many solar contractors will not detail the inverter they are using because they are using cheaper central inverters. In addition to the production issues with central inverters, central inverters usually only have a 10-year warranty.

Without converting solar power from DC to AC electricity, Hawaii homeowners cannot see any savings from solar.

How do solar batteries impact the cost of a residential solar installation?

How do cheap solar batteries impact the value and savings of homeowners solar savings
3 Dangers of Cheap Solar Batteries On Homeowner Savings (Infographic)

In Hawaii, solar batteries are an integral part of installing solar. Solar batteries help protect homeowners on Oahu, Big Island, Maui, and Kaui from power outages and, just as importantly, see savings on expensive Hawaiian Electric electricity.

When looking at batteries, many different types of solar batteries exist. For most customers, HECO requires that solar panels do not send electricity back to the grid. This unique aspect of how solar and batteries need to work in Hawaii is why getting the correct solar battery for your system is essential.

At Alchemy Solar, we provide leading solar batteries like the Tesla Powerwall 2 and LG Chem RESU. The Powerwall 2 and LG Chem RESU are premium batteries that come at a significant price point but also provide the best performance, warranty, and functionality, increasing savings and battery backup protection.

Many solar companies in Hawaii do not have the relationships, financing, or installation experience to provide the Tesla Powerwall 2 or LG Chem RESU. As a result, they have to install lower-quality batteries. Lower-quality batteries are an issue for homeowners because they can lead to a higher HECO bill, not functioning during power outages, shorter warranty coverage, and limited access to utility battery programs.

As more customers in Hawaii have installed solar and batteries, HECO has begun to realize that residential solar batteries can help keep the power grid secure. On Oahu, HECO has set up Demand Response Battery Bonus programs and grid service programs like Kukui Hele Pō that pay customers with batteries in exchange for helping to limit power outages and help replace electricity lost in the closing of the AES Hawaii Power Plant.

Cheap batteries may seem like a good choice upfront, but over time they will lead to customers spending more time on electricity and getting less battery backup protection.

How do solar and battery warranties impact the cost of a residential solar installation?

The importance solar panel warranty on the savings that a customer gets from solar panels
How Do Solar Warranties Impact On Cost and Savings

Solar panel systems do not have moving parts, but that does not mean that warranties are unimportant. When customers add a solar battery, the importance of the systems warranty becomes absolutely essential.

Warranties vary depending on factors, but most solar contractors in Hawaii do not have the financial savings to stand by a long-term warranty. On paper, the warranties may seem strong, but in truth, these warranties do not have value because the customers may not be around to make the needed repairs.

Many smaller solar companies across the state assume that the product warranties will be sufficient protection, not adding any additional cost to the price of the solar panel and battery system. Not including workmanship warranties keep the price down upfront, but the product warranties usually only cover the equipment and not the labor needed to install it.

Replacing broken solar equipment can cost customers thousands of dollars in workmanship, if not covered by warranty, dramatically increasing the cost of owning the solar panel system.

How do solar tax credits impact the cost of a residential solar installation?

Many solar companies in Hawaii only have one option for providing solar to customers with a cash purchase. Because they don't have the size or reputation needed to have relationships like the one Alchemy Solar has with Sunrun, these smaller solar companies attempt to present the best-case scenario for how the solar tax credit impacts the cost of a solar panel system.

By presenting the best-case scenario for the tax credit, many customers get a false understanding of their actual savings from solar panels and batteries. In addition, some solar contractors deceive customers by using vague or deceptive language about how the solar tax credit applies to solar projects. The tax credit is just that, a credit! Sadly many solar companies present it as a check that customers will receive. This is not true, and crucial for customers to decide what the return on investment will look like!

Another essential detail not always shared with customers is that not everyone will tax advantage of the total tax credit amount. People need to have a tax liability to take advantage of the tax credit. That means that retired people, have a limited income or other reasons will not recognize the tax credit. For customers looking at cash, this can push back the ROI timeline or put the tax credit towards a solar loan, dramatically increasing the monthly payment for the solar payment.

In Hawaii, state officials have recently voted to decrease the Hawaii State Solar Tax Credit. At the same time, the Federal Solar Tax Credit will be stepping down in the years to come. Decreases in the Hawaii Solar Tax Credit and Federal Solar Tax Credit are not factored in the projected savings. By not including this information, customers are not provided a clear understanding of how much a solar panel system costs in Hawaii.

How do solar and battery financing fees impact the cost of a residential solar installation?

Solar has grown dramatically on Oahu, Maui, Big Island, and Kaui because of access to really exciting solar financing options. Solar and battery financing means that more homeowners can afford to add solar to their homes. Unfortunately, not all solar financing is created the same, and most solar contractors do not represent the actual cost of using solar financing fees.

Many contractors utilize long-term solar financing with a low annual percentage rate (APR) to make solar and home batteries look cheap. When presented with a low solar monthly payment, this might seem attractive. However, in reality, these customers are paying thousands and sometimes tens of thousands of dollars in solar financing fees.

Solar financing fees or dealer fees, as they are also known, are costs built into solar loans to help the lenders make a predictable return on loan. In theory, this makes sense. However, in practice, these fees can be up to 29% of the cost of installing the solar and battery system.

What impact do solar financing or dealer fees have on the cost of installing a home solar and battery system
How do solar financing fees impact the cost of installing solar panels?

For example:

Solar and battery system install price: $25,000

Solar financing dealer fee: 29%

Price solar system after solar financing fee: $32,250

Cost of solar financing: $7,500!

In this example, the customer would end up paying an extra $7,500 in financing fees, which does not even consider the interest payments on the solar loan!

Most solar contractors do not disclose these financing fees, instead just focusing on the monthly price. At Alchem Solar, we are dedicated to transparency and always disclose what solar financing fees are or provide the option of a solar monthly PPA or lease that does not have financing fees.

How does customer support impact the cost of a residential solar installation?

Customer support starts with the quality of the sales experience and continues years after the solar installation has been completed. Unfortunately, for small solar companies, this usually means that they cannot afford a team dedicated to customer support.

At Alchemy Solar, we make sure that a team of dedicated customer service representatives is available in Hawaii for our customers if an issue arises. The overhead of these team members is built into the price for our customers upfront, at a lower cost.

Companies that do not have customer support teams might show a lower upfront cost but are putting the customer at tremendous long-term risk. Like companies that skimp on the warranty they provide, Oahu, Big Island, Maui, and Kaui solar companies that do not have customer service teams pass this cost to customers. If an issue does arise, the customer's time and money will be spent tracking down a solution!

So what is the average cost of installing a solar and battery system in Hawaii?

Now that we have gone over some of the factors that determine the cost of installing solar in Hawaii let's get into the average cost of installing solar and home batteries in Hawaii. Many websites claim to offer the average cost of solar, but these numbers are not based on actual projects in Hawaii.

We have focused on collecting as much real-world data as possible to generate these numbers, and it is essential to define some factors that go into these numbers.

  1. Because of HECO policy, we are going to focus on solar projects that include a battery.

  2. The average system size for the solar is 6,500 kW.

  3. A 6,500 kW is around 18 to 21 solar panels, depending on the wattage of the solar panels.

  4. These numbers are based on using Tier One solar panels and industry-leading inverter technology.

  5. The average system in Hawaii includes one solar battery, and we only use the Tesla Powerwall 2 or LG Chem RESU for these averages.

  6. Because of our focus on providing the best options possible, these numbers do not include financing fees.

  7. Average numbers include an industry-leading 25-year workmanship warranty and, most importantly, a dedicated customer service support team in Hawaii.

  8. Every solar system we design is custom designed based on our customers specific homes and electrical usage! This is just the average for customers in Hawaii

The average cost of installing a solar panel and battery system in Hawaii is $30,419.

Using real customer data and industry leading equipment we provide the average cost of installing solar and home batteries in Hawaii
What is the average cost installing solar panels and a home battery in Hawaii?

Conclusion: How Alchemy Solar ensures that you get the best solar and battery pricing in Hawaii?

Our goal at Alchemy Solar is to expand access to solar panels and batteries to as many homeowners in Hawaii as possible. In addition, we strive to make sure that solar is as affordable as possible. A part of that is making sure that we have different options available besides a traditional cash purchase.

Many of our customers are focused on adding solar and batteries without paying anything out of pocket. That is why we offer the $0 down Sunrun solar and Brightbox Battery solution. Getting a low kilowatt cost with a monthly lease or PPA option helps homeowners address the fact that HECO utility rates are some of the most expensive in the nation.

We also want to make sure that our customers can maximize savings by taking advantage of every solar incentive available to customers in Hawai. For example, for customers on Oahu, the new Demand Response Battery Program allows customers to add NEM solar panels and rebate payment of thousands of dollars to add a battery.

For customers who have already added solar and batteries on Oahu, we help them get enrolled in the Kukui Hele Pō. The Kukui Hele Pō provides customers with a $300 gift card and additional Hawaiin Electric savings to help stabilize the grid and protect themselves and others from power outages.

The most crucial factor in determining the value of solar and home batteries is making sure that the system is designed based on your specific needs. Every home has a different roof, and every family uses electricity differently. This is why, unlike other solar companies, we customize our designs for every proposal we put together.

Finding the right fit for you means customizing the solar panel system for your needs, not going off the Hawaii average. If you are interested in finding out how much solar and home batteries can save you, schedule a free consultation with Alchemy Solar today!

103 views0 comments


bottom of page