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 thestate’s electricity from renewable resources by 2030.
According to the regulator’s ruling, homeowners and commercialproperty owners who install solar panels in Hawaii will get paid for any excess electricity they generate. Those who sign up and participate inthe program will get paid 21.8 cents for each kilowatt hour (kWh) thatis fed back into the electric grid. Since the going rate for residential electricity is higher on many parts of the islands, the feed-in tariffwill really be best suited to homeowners — and businesses — that havesolar energy systems that produce more electricity than they use on anannual 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 moreenergy than they use. It’s for anybody who has a fair amount of openspace 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. Thismeans that if you live on Oahu and pay HECO 25 cent per kWh, HECO isrequired to issue monthly credit for any excess solar electricity at 25cents. Seems fair enough. The catch? At the end of the 12-month billingcycle, 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 thatowners of solar photovoltaic (PV) systems receive compensation for anyover-production on annual basis. Also, unlike net-metering, whichprovides credit on ensuing electric bills, a feed-in tariff approachprovides a cash payment.
Once in place, Hawaii’s feed-in tariff is also expected to streamline solar project development and financing. The approved program includesprovisions for set pricing, terms and conditions, standard form ofcontract and clarified interconnection procedures — all of which, it’sexpected, will help make it easier to propose, close and complete solarinstallations.
As it stands, HPUC has approved the feed-in tariff for solar PVinstallations up to 500 kilowatts (kW) in size. Next up will be asimilar ruling for systems between 500 kW and 5 megawatts (MW).
Hawaii — the most fossil-fuel dependent state in the country andalso, not surprisingly, home to the country’s highest electricity — has a strong mandate to develop homegrown electricity-generating assets.
You can read more about HPUC’s ruling in its press release (PDF).