How Much Is Electricity In Hawaii? Prices, Rates And More

With its year-round warm weather and renowned natural beauty, Hawaii may seem like paradise. But its isolated island geography also means higher costs of living across the board, including electricity.

If you’re short on time, here’s a quick answer to your question: Residential electricity rates in Hawaii average around 34 cents per kWh, over triple the national average, making it the most expensive state for power.

In this comprehensive guide, we’ll break down exactly how much you can expect to pay for electricity in Hawaii, including average prices per kWh, monthly bills, and factors impacting costs for both residents and businesses.

Average Electricity Rates in Hawaii

Residential

According to the U.S. Energy Information Administration, the average residential electricity rate in Hawaii was 43.22 cents per kWh as of November 2023, which was more than triple the national average of 14.22 cents per kWh.

This makes Hawaii’s residential electricity prices the highest in the nation by a sizable margin.

There are a few key reasons why electricity rates run so high for Hawaii homes:

• Hawaii relies heavily on imported petroleum and coal for electricity generation. Transporting fossil fuels to the remote island state is costly.
• Development of renewable energy like solar and wind has been increasing but is still limited compared to fossil fuels. Only about 25% of Hawaii’s net electricity generation came from renewables in 2021.
• The small, isolated island electricity grids lack economies of scale. There are higher infrastructure costs per customer compared to interconnected mainland grids.

Exactly how much a Hawaii household pays for electricity depends on factors like location, provider, and amount of usage. But most residents pay over 30 cents per kWh, significantly higher than the national average which is under 15 cents per kWh.

Commercial & Industrial

Electricity rates for Hawaii’s commercial and industrial customers are lower than residential rates but still well above average compared to other states. As of November 2023, Hawaii’s average commercial electricity rate was 34.05 cents per kWh, while the industrial rate averaged 30.35 cents per kWh.

The high electricity rates in Hawaii impact businesses and industries located in the state. According to a Hawaiian Electric white paper, their rates for commercial customers were the highest in the nation, over 60% above the mainland average.

High power costs get passed through to consumers in the form of higher prices for goods and services.

The Hawaii Public Utilities Commission has been working in recent years to try to bring down electric rates through clean energy initiatives, grid modernization investments, and other reforms.

But overcoming Hawaii’s reliance on imported fossil fuels for electricity remains an ongoing challenge to provide more affordable power.

What Influences Electricity Costs in Hawaii?

There are several key factors that impact the costs of electricity in Hawaii:

High Dependence on Imported Fossil Fuels

Hawaii relies on imported petroleum for over 70% of its energy needs. As a remote island state, Hawaii pays higher prices to ship in crude oil and coal compared to mainland states. Fluctuations in global oil and coal prices directly influence electricity rates for Hawaiian residents and businesses.

Investments in Renewable Energy

Hawaii has invested heavily in renewable energy sources like solar, wind, geothermal and biomass in recent years. Over 25% of Hawaii’s electricity now comes from renewables.

However, the high upfront costs of building and maintaining these systems contribute to the state having the highest average retail electricity rates in the country at 34.54 cents per kWh as of November 2022.

Small, Isolated Grids

Hawaii’s six main islands have independent electricity grids. Supplying power reliably to small island populations spread across rural areas increases infrastructure and delivery costs. Upgrades needed to integrate more renewables also raise rates.

For example, Hawaiian Electric Co.has invested over $500 million in grid modernization initiatives since 2017.

Demand Patterns and Seasonal Variations

Tourism drives higher peak electricity demand in Hawaii. In 2019, Hawaii hosted over 10 million visitors. Air conditioning use in hotels and vacation rentals soars in the summer, increasing strain on grids.

Rates per kWh tend to rise substantially June through September compared to other months.

Some Hawaiian utilities also assess a higher per kWh charge during peak afternoon hours (2 pm – 7 pm) to manage heightened demand.

Average Monthly Electric Bills in Hawaii

Residential

The average monthly electricity bill for a Hawaiian home is around $230, which is one of the highest rates in the United States. This steep price tag is largely due to Hawaii’s reliance on imported fossil fuels to generate electricity. Over 80% of the state’s power comes from burning oil.

Electric rates can also vary quite a bit depending on which island you live on. For example, monthly bills on Oahu average around $215, while on Maui they typically exceed $260. The difference comes down to what energy sources each island uses and the costs to transport fuel across the islands.

Here’s a comparison of typical residential electricity bills by island:

The good news is Hawaiians have ample rooftop solar potential to offset these steep electricity expenses. By installing solar panels, households can dramatically cut their dependence on fossil fuels and shrink their monthly utility bills.

Businesses

Commercial electricity customers in Hawaii fork over even higher monthly power bills than residents. The average small business pays roughly $430 per month while large industrial operations see bills over $100,000!

Hawaii’s tropical climate plays a role in these lofty business energy costs. Most enterprises require extensive air conditioning to maintain comfortable temperatures for customers and employees. Large hotels and resorts in particular guzzle huge amounts of electricity.

Luckily, the state offers attractive tax credits up to 35% for companies that install renewable energy systems like solar panels or wind turbines. More and more businesses are leveraging these credits to curb their steep overhead.

Also read: Cheapest Hawaiian Island To Live On In 2023

Saving on Electricity Costs in Hawaii

Compare Energy Plans

Comparing electricity plans is one of the best ways to save money on your energy bills in Hawaii. The state has decoupled utility profits from electricity sales, meaning utilities earn the same regardless of how much power customers use.

This removes the disincentive for utilities to help customers save energy. Still, shopping for the right plan can lead to significant savings.

Residents have the option to choose either Hawaiian Electric Company (HECO) or an independent retail energy provider. HECO offers schedule J and schedule TOU-RI for residential customers.

Schedule J has a flat per kWh rate while schedule TOU-RI has higher rates during peak afternoon hours and cheaper rates overnight.

Comparing these rate schedules can help determine the most cost-effective option.

Independent energy retailers like Blue Planet Energy provide additional options like prepaid electricity plans and monthly variable rate plans. Prepaid plans allow customers to pay for energy before using it, making it easier to stick to a electricity budget.

Variable rate plans change from month-to-month and sometimes offer introductory discounts. Review all the details before signing up to ensure the plan aligns with your usage.

Improve Energy Efficiency

Making homes more energy efficient directly reduces electricity consumption, saving residents money every month. Hawaii has nearly year-round warm weather, so cooling upgrades tend to offer the most dramatic savings.

Simple upgrades like caulking windows, weatherstripping doors, and adding insulation help keep conditioned air in and outside air out. Installing ENERGY STAR certified appliances, lighting, and ceiling fans can also trim energy waste.

Smart thermostats efficiently control air conditioners and heat pumps without sacrifice on comfort.

Utility companies provide rebates and incentives for efficiency upgrades through programs like HECO’s Home Energy Challenge. Local non-profits like Hawaii Energy and contractors certified by BPI also audit homes and recommend cost-effective fixes tailored to the property.

Install Solar Panels

Hawaii enjoys more than 250 sunny days per year across most of the state. This makes going solar an obvious solution to rising utility rates. Federal and state tax credits lower solar panel system costs by up to 65%, with payback periods averaging just 5 years.

Net energy metering in Hawaii allows solar customers to earn bill credits when generating excess electricity to the grid. Monthly power bills effectively get reduced to minimum charges and grid usage when the sun goes down.

It gives Hawaii residents energy independence and insulation from volatile fossil fuel prices.

Thinking of buying a house or condo? Ask if the home already has solar installed. This avoids the upfront investment in panels and translates to thousands in energy savings annually.

For renters, seek out apartments with solar hot water heating or shared solar PV systems to take advantage of renewable power without installation headaches.

Also read: How To Live In Hawaii On The Cheap

Conclusion

In summary, Hawaii has by far the highest electricity rates in the U.S., with residents paying over three times the national average at about 34 cents per kWh. Key factors like isolated geography, oil dependence, and rising solar adoption drive up power costs.

While saving on electricity bills presents challenges, comparing plans, improving efficiency, and adding solar can provide relief. We broke down prices, rates, monthly costs, and ways to save so you can make informed energy decisions in Hawaii.

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