Hawaii’s plans for a feed-in tariff — which have been in the works for quite some time — are one step closer to being realized, thanks to a decision Wednesday by the Hawaii Public Utilities Commission (HPUC). The decision is part of a broad push in Hawaii to get 40 percent of the state’s electricity from renewable resources by 2030.
According to the regulator’s ruling, homeowners and commercial property owners who install solar panels in Hawaii will get paid for any excess electricity they generate. Those who sign up and participate in the program will get paid 21.8 cents for each kilowatt hour (kWh) that is fed back into the electric grid. Since the going rate for residential electricity is higher on many parts of the islands, the feed-in tariff will really be best suited to homeowners — and businesses — that have solar energy systems that produce more electricity than they use on an annual basis.
As Scott Seu, VP for energy resources at Hawaiian Electric, told Bloomberg News, “[t]his [feed-in tariff] is an option for people who generate more energy than they use. It’s for anybody who has a fair amount of open space that’s not being used.”
Under Hawaii’s net-metering rules, homeowners and businesses must be credited monthly at the retail rate for any excess electricity generated by their solar panels. This means that if you live on Oahu and pay HECO 25 cent per kWh, HECO is required to issue monthly credit for any excess solar electricity at 25 cents. Seems fair enough. The catch? At the end of the 12-month billing cycle, any excess credit is automatically granted (without compensation) to the utility, like HECO, MECO or HELCO.
The feed-in tariff program rectifies this issue by ensuring that owners of solar photovoltaic (PV) systems receive compensation for any over-production on annual basis. Also, unlike net-metering, which provides credit on ensuing electric bills, a feed-in tariff approach provides a cash payment.
Once in place, Hawaii’s feed-in tariff is also expected to streamline solar project development and financing. The approved program includes provisions for set pricing, terms and conditions, standard form of contract and clarified interconnection procedures — all of which, it’s expected, will help make it easier to propose, close and complete solar installations.
As it stands, HPUC has approved the feed-in tariff for solar PV installations up to 500 kilowatts (kW) in size. Next up will be a similar ruling for systems between 500 kW and 5 megawatts (MW).
Hawaii — the most fossil-fuel dependent state in the country and also, not surprisingly, home to the country’s highest electricity rates — has adopted a strong mandate to develop homegrown electricity-generating assets.
You can read more about HPUC’s ruling in its press release (PDF).
Two things, first that the utility companies are so niggardly that they don’t want any excess credit to go to the producers of that energy, but to themselves. What slobs!
Second, in spite of problems in sorting out the details in any kind of program, this is a great advance and sets a good example for other states and countries. Thank you from ex-Big Island residents now in Northern Peru!