Solar and Wind Energy Credit (Corporate)
Administered by Hawaii Department of Taxation
You can claim a Hawaii state tax credit worth 35% of your solar thermal or photovoltaic system costs (up to $2,250–$5,000 depending on system type) or 20% for wind systems (up to $1,500), applied directly to your state income taxes. Under certain conditions, if your credit exceeds your tax liability, you may receive the difference as a refund—especially if your household income is $20,000 or less ($40,000 if filing jointly). File Form N-342 with your state return and deduct any utility rebates you received from your system cost before calculating the credit.
Hawaii's RETITC allows your customers to capture significant tax credits—35% for solar PV/thermal (capped at $500,000 for commercial) or 20% for wind (capped at $500,000)—making your systems more affordable and competitive. You'll need to help customers document equipment costs and installation expenses, and ensure compliance with total output capacity requirements (per HAR 235-12.5 rules effective January 2, 2014) and that utility rebates are deducted from eligible costs before credit calculation.
The RETITC, codified in HRS §235-12.5 with no repeal date, delivers refundable and non-refundable income tax credits for solar thermal, PV, and wind systems across residential and commercial sectors. Credits range from 20–35% of costs with per-unit or aggregate caps ($1,500–$500,000); refundability is available for solar systems (30% of eligible credit) for households under $20,000 AGI or those tax-exempt. Administered by Hawaii Department of Taxation using Forms N-342, N-342A, N-342B, and N-342C; administrative rules (HAR 235-12.5) govern total output capacity requirements for systems installed after January 1, 2013.
Program details
- Program ID
- 49
- Effective
- 7/1/2009
- Last updated
- 9/4/2026
Eligibility
- Sectors
- commercial residential multifamily residential
- Technologies
- solar water heat solar space heat solar thermal electric solar photovoltaics wind (all) wind (small)
Program summary
Originally enacted in 1976, the Hawaii Energy Tax Credits allow individuals or corporations to claim an income tax credit of 20% of the cost of equipment and installation of a wind system and 35% of the cost of equipment and installation of a solar thermal or photovoltaic (PV) system.*
For solar thermal water heating systems, the maximum allowable credits are as follows:
- Single family residential property is eligible for a credit of 35% of the actual cost or $2,250, whichever is less;
- Multi-family residential property is eligible for a credit of 35% of the actual cost or $350 per unit, whichever is less; and
- Commercial property is eligible for a credit of 35% of the actual cost or $250,000, whichever is less.
For photovoltaic and solar space heating systems, the maximum allowable credits are as follows:
- Single family residential property is eligible for a credit of 35% of the actual cost or $5,000, whichever is less; if all or part of the system is used as a substitute renewable energy technology for the solar water heating requirement for new residential construction, the credit shall be reduced by thirty-five per cent of the actual system cost or $2,250, whichever is less;
- Multi-family residential property is eligible for a credit of 35% of the actual cost or $350 per unit, whichever is less; and
- Commercial property is eligible for a credit of 35% of the actual cost or $500,000, whichever is less.
For wind powered energy systems the maximum allowable credits are as follows:
- Single family residential property is eligible for a credit of 20% of the actual cost or $1,500, whichever is less; if all or part of the system is used as a substitute renewable energy technology for the solar water heating requirement for new residential construction, the credit shall be reduced by twenty per cent of the actual system cost or $1,500, whichever is less;
- Multi-family residential property is eligible for a credit of 20% of the actual cost or $200 per unit, whichever is less; and
- Commercial property is eligible for a credit of 20% of the actual cost or $500,000, whichever is less.
For a system that is business property, it is important to note that the costs that exceed the amount allowable for the maximum energy tax credit may be used for the Capital Goods Excise tax credit. In addition, for taxable years beginning after December 31, 2005, the dollar amount of any utility rebate must be deducted from the cost of the qualifying system and its installation before applying the state tax credit.
A new provision was added to the tax credits in June 2009, with the passage of SB 464. This legislation, effective July 1, 2009, allows the tax credit to be refundable under certain conditions. For solar energy systems, a taxpayer can reduce the eligible credit amount by 30%. If this reduced amount exceeds the amount of income taxes to be paid by the taxpayer, the excess credit will be refunded to the taxpayer. If the tax credit exceeds a tax payer’s income liability, the excess credit over liability may be used as a credit against the taxpayer’s income liability until exchausted. Taxpayers whose entire income is exempt or whose adjusted gross income is $20,000 or less (or $40,000 or less if filing jointly) may receive the tax credit as a refund.
Contact & resources
- Contact email
- Taxpayer.Services@hawaii.gov
- Additional resources
Please verify current program details with the administering agency before making any financial decisions.
