When it comes to solar hot water, these are The Little Islands That Could. Hawaii’s strong investment in solar water heating technology has given their state the enviable designation of Solar Hot Water Leader within the United States. It’s also made these water heating systems an even more attractive investment. Check out the size of Hawaii’s market compared to other key states:

Source: Solar Energy Industries Association

Consider the fact that Hawaii’s population is a mere 2.5 percent of California’s, and you can see why the 48th 50th state deserves notice.

Hawaii supports solar hot water with a mix of policies:

• An upfront solar hot water rebate of $750 for residential systems ($125/deferred kilowatt-hour for commercial systems)
• A state tax credit of 35 percent
• The broader 30 percent federal tax credit
• A requirement that all new single-family homes come with solar hot water system installed

Let’s look at what this means for a typical residential customer. Say the initial system cost is $7000 (a conservative estimate — Hawaii Energy Efficiency Program estimates the average initial cost is $6,620). After the upfront rebate of $750, your contractor bill would be $6,250. With the 30 percent federal tax credit, your expenditures would total $4,375. Finally, after the state tax credit of 35 percent, your ultimate costs would come to a mere $2,500. Of course, this is assuming that you have the appetite for these tax credits — check with a tax expert to see if this is the case.

According to some of our partner installers in Hawaii, this incentive system would set the solar hot water “break even” point at two years!

As noted above, for a tiny island state with a population just over 1 million, their contribution to, and example for, the solar hot water market is truly commendable. Many of these efforts stem from Hawaii’s lack of traditional energy resources and the corresponding need to import oil and gas. Their Renewable Energy Policy begins by explaining:

The objectives in the area of Alternate and Renewable Energy are to promote commercialization of Hawaii’s sustainable energy resources and technologies to reduce the state’s high dependence on imported oil, increase local economic development, and reduce the potential negative economic impacts of oil price fluctuations.

So there you have it. Strong motivation to implement renewables lead to strong strategy.

If you were thinking of moving to Hawaii and the weather alone didn’t lure you across the Pacific, their energy policy should definitely convince you!