Hawaii is known as a tropical paradise and one of the nicest places to live in the United States. It’s also known for its high energy prices and heavy reliance on imported goods. The combination of regular sunlight during the day and higher-than-average energy costs makes Hawaii into the ideal candidate for solar energy. One out of three Hawaiian homes already rely on a solar heating system for their water supply, and additional homes adopt solar energy on a yearly basis. There are several major benefits to making the switch to a solar system, learn a bit more about what each of those benefits has to offer you and decide if making the switch makes sense for you.
Hawaiians Have the Biggest Potential for Solar Savings
Out of all the states in the USA, I’m not exaggerating when I saw that Hawaii offers the biggest potential to save money with solar technology. It’s not because of the area’s overly sunny, although it is, because it has the most expensive electricity rates of any state in the entire country. According to recent reports from the Hawaiian Electric Company energy costs around the islands range from 25.79 cents per kWh all the wap up to 36.67 cents per kWh. Those numbers are astonishing when you consider that average US energy costs are between 11 and 12 cents per kWh. That means that even the Hawaiians enjoying the lowest rates available of all the islands are still paying more than double the average that other Americans enjoy.
That’s because much of Hawaii’s energy comes from petroleum currently, and all that oil has to be imported on ships since it can’t be produced out on the islands. An astonishing 46.3 million barrels of petroleum were imported into Hawaii for energy use throughout 2014 and over 10 million megawatt hours of electricity were sold by the utility companies over that same year. With such high energy rates, it’s almost a no-brainer to at least consider solar as an alternative energy source. There’s plenty of money that could be saved by adopting the technology, and both businesses and residents could enjoy in those savings. If you would like to see the potential savings you can expect, get in touch with a trusted solar provider in your area.
Installing a Solar System is a Sound Investment
The cost to install a solar system in Hawaii is just $5.50 per watt of panels based on the 2012 average cost of installing panels, and that’s before you even consider any of the Hawaii or federal incentives available for the technology. At that level of expense, it would take just three to five years for the average household to pay off the initial investment and start profiting from the panels. That means you could pay for a set of panels on your home, and in just a few years you will have paid off that investment in reduced utility fees and from then on out you can enjoy reduced or free utility bills every month for the life of your panels. Not only does making this type of investment save you money currently, but it helps keep your energy costs fixed over the long term. With oil becoming a more limited resource each and every day it makes sense to look for alternatives. Eventually oil prices are going to go up, and hopefully, by then you’ll have a new source of power to rely on. With most modern solar arrays lasting between 20 and 30 years, the investment into solar makes a lot of sense, and it won’t be difficult to recoup all the money that you put into a new system.
Avoid Added Property Taxes in Honolulu
If you’re worried about a solar array increasing your property taxes in Honolulu thanks to an increase in the value of your home you don’t need to be. On September of 2009, The Honolulu City Council passed Bill 58 that makes alternative energy improvements to a home tax exempt. Essentially that means you can improve your home as much as you want with alternative energy technology and your property taxes won’t go up at all because of the improvements.
Lower Your Income Taxes
In order to encourage local Hawaiians to add alternative energy sources, such as solar panels, to their homes, the government is giving everyone that does an income tax credit. The credit that you receive will be a whopping 35% of the total system cost or up to $5,000 depending on which of the two is the more affordable. This means that if you put in a $10,000 solar system, you can pay $3,500 less in income taxes at the end of the year. For someone who pays a lot in income taxes, the credit could be a helpful tool in managing a solar installation and make it even easier to reap the benefits of a new solar system.
If you would like to claim the credit you simply have to fill out form N-342 at the end of the year and submit it along with the rest of your tax return. As long as you meet the requirements you’ll be able to enjoy that nice tax credit that will help you save even more with your new system. If you aren’t sure what your total potential savings could be with a new system you should consider contacting a local solar provider to ask how much you can save. If these benefits weren’t enough to convince the actual savings figures probably will.
Improve the Environment
Hawaii already has an improved environment compared to many other states because of more renewable energy use, and a reliance on cleaner oil versus coal burning for energy production, but each home that switches to solar helps the environment a little bit more. Since the state relies heavily on petroleum imports for its energy production many natural resources can be saved by switching to solar power instead of relying on crude oil. Making the switch will help reduce the need for oil imports over the next two decades. Each new person that decides to add solar panels will help compound this effect until eventually, the state won’t rely on oil nearly as much as it once did. This will make Hawaii an even cleaner place to be. It will reduce air pollution levels further and help preserve the natural environment that so many locals enjoy today.
Get Paid for Energy Overages
Not only will solar energy help reduce your utility bills each month, but getting a set of panels installed on your home can also lead to credits from the utility back into your account. That means if your system produces more electricity than you need in a month you’ll get paid by the utility company! Currently in a solar system that has a 20KW array or less the payback amount will be 21.8 cents per kWh and if you have a system that’s between 20KW and 500KW you’ll still receive a very respectable 18.9 cents per kWh that you supply back into the grid. While solar energy won’t pay you back as much as you pay to the electric company for each kWh of energy you need, it does come close and if you aren’t using any grid energy you’ll end up with extra money coming in from your system at the end of the month.
Benefit from Federal Tax Credits
Not only do Hawaiians stand to benefit from a pretty comprehensive local tax credit, but they can also take advantage of federal tax credits to save even more money when going with a solar system. The EPA and Department of Energy offer tax credits for solar systems as long as they meet a specific set of requirements, and these credits are set to go until at least 2016.
If you decide to buy a complete solar power package for your home you can get up to 30% of the cost refunded to you through a federal tax rebate. Couple that impressive rebate with the one offered by the Hawaii government and solar becomes much more affordable. In order to reap these benefits you simply have to explain your new solar installation and the price that you paid for the system on the IRS Tax form 5695 and you’ll enjoy immediate savings off your tax bill.
Increase Your Home Resale Value
If you don’t plan on living in your new home until you’ve fully benefitted from your investment into a state-of-the-art solar array, it doesn’t mean that you are throwing your money away by getting one. In a recent study by Forbes in California, experts found out that most homeowners would be able to recoup nearly 100 percent of their original solar panel investment when it was time to sell their home. Most homeowners were able to get all the money from their original investment back while also benefitting from all the energy the system produced during the time of ownership. Don’t let an interest in selling your home over the next five to ten years hold you back from getting a solar array, make the move today and you’ll still likely get your money back when it comes time to sell off the home.
Enjoy More Predictable Energy Costs
Currently close to 90 percent of Hawaii’s energy is produced using petroleum. While the rest of the United States relies on coal quite heavily, petroleum is the only efficient important that will meet Hawaii energy needs. With energy costs tied up in oil, the prices fluctuate quite heavily and it’s hard to predict how prices will shift in the future. Oil prices dropped recently, but it’s likely that prices will go up again, and when they do Hawaiian energy costs will go up even more.
One major benefit of solar energy is that it’s predictable. After the initial investment into the technology, the costs of the technology are relatively nonexistent. That means that if you spend $25,000 on a solar system for your home and you expect to benefit from the system over the next 25 years, you are effectively paying a rate of $1,000 per year for your solar power supply. You know what the cost is for the system since you already paid it.
Even if solar energy was going to cost you the same as energy produced from oil in Hawaii, it isn’t it’s cheaper, it would still be worth it to switch to the new technology to know that your costs were fixed over the next couple decades. Oil prices are likely to fluctuate dramatically in the future, and power costs from the electric companies will follow that pattern leaving you paying unexpected prices if you don’t make the switch.
Hawaii Solar Power Conclusion
If you live in Hawaii currently and are looking for ways to cut your costs, having solar panels installed on your home may be a good investment. With such great support from both the state and the federal government currently, it’s a good time to make such a major investment. Not only will the panels help you reduce your energy costs, but they will also lower your environmental impact. You’ll go from producing a huge number of emissions every day by relying on oil as your main source of power to producing no emissions for the bulk of your energy use.
Relying on the sun for electricity is a smart idea for present savings and future security. The sun isn’t going anywhere, but crude oil is. Once the oil becomes more scarce and prices shoot up you’ll still be enjoying the steady energy production of your solar system. If you would like to explore your solar options today, get in touch with a local supplier here. You can get details about an installation and different ways that you can pay for your new system. It’s a good move that will help you save money over the long-term, and it’s an investment you can feel good about.