Earlier this month, the Hawaii Public Utilities Commission (PUC) ended its Net Energy Metering program. Homeowners and businesses looking to install rooftop solar now have two new options. What does this mean for the Aloha state? In this blog post, we summarize the changes and talk about how Hawaiians can get more buck for their solar bang.
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What is net metering?
Most homes and businesses with rooftop solar arrays also connect to the power grid. With net metering, buildings that get more solar energy than they can use can feed it into the grid. Some power utilities pay solar customers a feed-in tariff for their excess energy. Usually, these customers receive the feed-in tariff in the form of credits on their electricity bill.
What's the deal in Hawaii?
Until recently, grid-tied, net metering customers in Hawaii enjoyed a one-for-one feed-in tariff. Customers were paid the same price for every kilowatt hour they fed into the grid as they paid for each kilowatt hour they pulled out. Having this kind of PV interconnection to the grid cost these customers $17 a month.
On October 12, the Hawaii PUC ended Net Energy Metering throughout the state. (Current net metering customers and those who’ve applied for it won’t be affected.) Two new PV interconnection programs will soon be available:
- Grid-supply. Rooftop PV systems still feed excess solar energy into the grid. But the new feed-in tariffs no longer match the variable price of retail electricity. Instead, the PUC fixed the feed-in tariff for two years at lower rates. How much lower depends on the island:
Island Retail/net metering rate, cents/kWha Grid-supply feed-in tariff, cents/kWhb Decrease Oahu 26.3 15.07 43% Hawaii Island 32.1 15.14 53% Maui 28.6 17.16 40% Molokai 34.8 24.07 31% Lanai 37.6 27.88 26% aApril 2015; source: Hawaiian Electric
bSource: Hawaii Public Utilities Commission
Also, power utilities will cap the number of new grid-supply permits. Too many solar installations simultaneously feeding in energy can overwhelm the grid. Some areas of Hawaii already have as much PV influx as the grid can handle while maintaining the reliability and stability we’ve come to expect from our utility service.
- Self-supply. Customers with rooftop PV systems will consume all the solar energy they produce instead of feeding excess energy into the grid. Energy management technology and energy storage enable this greater self-consumption. Excess energy can be stored onsite and deployed when needed, such as at night. Utilities won’t cap the number of self-supply permits, which will be fast-tracked.
The minimum bill for either type of residential PV-grid interconnection will rise to $25 per month. Owners of small commercial applications will pay $50 per month.
A third initiative will expand time-of-use pricing. Any residential customer can opt in to pay less for electricity in the middle of the day, when the influx of solar energy to the grid is greatest.
As we've written about before, importing fossil fuels to islands costs a lot of money. Sunny Hawaii was an early and aggressive promoter of rooftop solar. And it worked. The nation’s fourth smallest state ranks seventh in installed solar capacity: about 500 megawatts. Tens of thousands of customers currently have a PV interconnection to a Hawaiian power grid. Thousands more have applied for permits.
Now, the minimum bill for a PV-grid interconnection is going up 47%. In the grid-supply program, the returns on excess solar energy are going down 38%. And at some point, the utilities will stop permitting grid-supply interconnections in order to protect grid stability.
What about the new self-supply program? The minimum bill is still going up. However, the self-supply program encourages customers to consume all the solar energy they make. Advanced energy management technology can better match the output of a rooftop solar array to a home’s energy demands. Energy storage devices, such as batteries, can save excess solar energy for later use. Using more of your own solar energy means buying less from the grid. More green, less fossil.
Plus, the utilities aren’t capping the number of self-supply permits. They’ll even grant them in parts of the state with lots of existing grid-tied PV systems, where utilities had been forbidding any new ones. Self-supply interconnections don’t feed solar energy into the grid, so they’re safe to install anywhere. And self-supply permits will be expedited through the notoriously slow PV permitting system.
Energy storage makes the most sense in self-supply PV systems. But owners of grid-supply systems can also benefit. The end of net metering in Hawaii is just the first phase of further changes to the state’s distributed energy policy. Hawaiians who have invested in solar panels, power control electronics, and associated costs can’t rely on getting a good return from their excess solar. With storage, grid-supply customers can use that excess energy instead of selling it. And every kilowatt hour of solar energy they use is one they don’t have to buy from the grid.
Storage in grid-supply systems can protect more than financial investments. Whether on the consumer’s side of the meter or the utility’s, storage can absorb spikes in solar generation that might otherwise jab into the grid.
Fossil fuel in Hawaii is still expensive and dirty. Most Hawaiians still need reliable grid power. The Hawaii PUC still wants the state to get 100% of its energy from renewables. With shrinking incentives for homeowners to sell solar energy into the grid, the best path forward in Hawaii may be hybrid solar-battery systems.
Want to learn more? See examples of Aquion Energy installations in Hawaii: