Residential Solar in Hawaii

My husband and I were vacationing on the island of Molokai last month when the Hawaii Public Utilities Commission (HPUC) approved two new solar programs for residents who are interested in installing rooftop solar panels and energy storage systems. These new programs were intended to expand opportunities for residential rooftop solar, which were diminished after the HPUC ended the state’s Net Energy Metering (NEM) program in 2015.

A few months ago, the New York Times reported that several states, including Hawaii, had rolled back their solar incentives in response to efforts by a powerful and well-funded lobbying campaign by traditional utilities. I remember wondering how could this happen in Hawaii, a state that requires 100 percent renewable energy sources no later than 2045 – the most aggressive renewable energy targets in the nation. On the way from the Molokai airport to our vacation rental, I noticed many homes with solar panels on their roofs. Our driver, who is a Molokai native, told us that the island’s power company no longer allows new residential rooftop solar hookups because they unstabilize the grid. To satisfy my own curiosity, I got online and did a little digging.

Prior to HPUC’s 2015 landmark decision, Hawaii’s NEM customers were paid retail value for the excess power their system generated and exported to the utility grid. This and other state and federal incentives, plus the fact that Hawaii’s electricity rates are the highest in the United States., have made rooftop solar an attractive option to many residents who wish to lower their energy bills. The number of rooftop solar installations skyrocketed. According to a Greentech Media report, in 2015 Hawaii had more rooftop solar per customer than any other state – one of nine Hawaiian residences were photovoltaic (PV) powered.

But the high volume of rooftop solar systems interconnected to the grid has caused concerns about the reliability of Hawaii’s physically-limited electric grids. Island utilities began to delay approval of already-submitted applications and stopped accepting new applications. By 2015 thousands of customers of Hawaiian Electric, the state’s dominant utility, were waiting for approval to interconnect to the grid. Customer frustration was high.

In January 2015, Hawaiian Electric filed an application with the HPUC to end the state’s NEM program. In October the same year, the HPUC issued an order to shut down the NEM program to new customers and replace it with an interim program until regulators could come up with a more permanent solution that incentivizes adoption of new technology. The interim program gave permitting priority to solar systems with storage and reduced the compensation rates for power exported to the grid. Instead of retail prices, customers were paid much lower wholesale rates. The interim program quickly and drastically reduced the demand for residential solar. As Hawaii’s solar industry continued to lose jobs and the caps were maxed out, solar companies pressured the HPUC to raise caps, while the utilities tried to push customers to choose the more costly option with storage system.

HPUC’s new decision last month heavily favors technology. For example, it launched a Smart Export program that allows customers to store energy within batteries during off-peak hours and export that energy to the grid during peak hours. It also adopted a Controllable Customer Grid Supply program for non-storage systems, which requires advanced equipment to allow the utility to manage power from a customer’s PV system.

We’ve heard about potential grid overload that could happen in California sometime in the future, and about the emerging storage technology. At this point, storage systems don’t seem to make economic sense for many people because of their high cost. In Hawaii, during the two-year run of HPUC’s interim program, only 166 systems with storage have been energized, according to the Hawaii Solar Energy Association. However, like all new technologies, price for storage systems will eventually come down, and hopefully residents here in California who are interested in solar energy can take advantage of the advanced technology before we reach the point of grid overload.

This article first appeared in the November 29, 2017 issue of the Rossmoor News. Author Jennifer Mu can be emailed at

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