Hawaiian Electric Companies propose plan to sustainably increase rooftop solar

An important step in achieving transformational energy goals for customers

• Plan is part of Hawaiian Electric’s goal to triple the amount of distributed solar power and increase renewable energy to more than 65 percent by 2030
• New transitional program would increase rooftop solar safely, sustainability, and fairly for all customers
• With program approval, Hawaiian Electric will more than double threshold for neighborhood circuits to accept PV systems

News Release from HECO

HONOLULU, Jan. 20, 2015 – As part of its transformation to deliver a more affordable, clean energy future for Hawaii, the Hawaiian Electric Companies are proposing a new program to increase rooftop solar in a way that’s safe, sustainable and fair for all customers.

In conjunction with this “Transitional Distributed Generation” program, the utilities expect to be able to help the growth of solar by more than doubling the threshold for neighborhood circuits to accept solar systems. This would eliminate in most of those cases the need for a longer and costly interconnection study.

Under the proposal, existing Net Energy Metering (“NEM”) program customers and those with pending applications would remain under the existing NEM program. Any program changes from this proposal would apply only to new customers.

The initiative is part of the Hawaiian Electric Companies’ clean energy transformation to lower electric bills by 20 percent, increase the use of renewable energy to more than 65 percent, triple the amount of distributed solar by 2030, and offer customers expanded products and services.

“We want to ensure a sustainable rooftop solar program to help our customers lower their electric bills,” said Alan Oshima, Hawaiian Electric president and CEO. “That means taking an important first step by transitioning to a program where all customers are fairly sharing in the cost of the grid we all rely on.”

Jim Alberts, Hawaiian Electric senior vice president of customer service, added, “At the end of 2013, the annualized cost shift from customers who have rooftop solar to those who don’t totaled about $38 million. As of the end of 2014, the annualized cost shift had grown to $53 million – an increase of $15 million. And that number keeps growing. So change is needed to ensure a program that’s fair and sustainable for all customers.”

New Transitional Program

Currently, NEM customers use the electric grid daily. Their rooftop solar systems send energy into the grid, and they draw power when their systems do not provide enough for their needs, including in the evenings and on cloudy days. However, many NEM customers are able to lower their bills to the point that they do not help pay for the cost of operating and maintaining the electric grid.

As a result, those costs are increasingly being shifted from those who have solar to those who don’t.

The new transitional program would create a more sustainable system and ensure the costs of operating and maintaining the electric grid are more fairly shared among all customers.

Under the current NEM program, customers receive credit on their electric bills at the full retail rate for electricity they produce. This credit includes the cost of producing electricity plus operation and maintenance of the electric grid and all other costs to provide electric service.

The Transitional Distributed Generation program would credit customers at a rate that better reflects the cost of the electricity produced by their rooftop solar systems. This is consistent with how Kauai Island Utility Co-Op compensates its solar customers.

Increasing PV Integration

If this transitional program is approved, the Hawaiian Electric Companies expect to be able to modify their interconnection policies, more than doubling the solar threshold for neighborhood circuits from 120 percent of daytime minimum load (DML) to 250 percent of DML. In many cases, this will eliminate the need for a longer and costly interconnection study.

To safely integrate higher levels of solar, rooftop systems will need to implement newly developed performance standards, including those established using results of a collaboration among Hawaiian Electric, SolarCity and the Electric Power Research Institute. Through this partnership, the performance of solar inverters was tested at the National Renewable Energy Laboratory in Golden, Colorado. These standards can reduce the risk of damage to electronics in a customer’s home and to utility equipment on the grid, safety hazards for electrical line workers, and even widespread power outages.

The Hawaiian Electric Companies will also make strategic and cost-effective system improvements necessary to integrate more rooftop solar. They will work with the solar industry to identify areas where demand for upgrades is highest. Planning for these upgrades will also consider the needs of the State of Hawaii's Green Energy Market Securitization (GEMS) program, which will make low-cost loans available to customers who may have difficulty financing clean energy improvements like solar.

To further support even more customers adding solar on high solar circuits, Hawaiian Electric will also be doing several pilot projects for “Non-Export/Smart Export” solar battery systems with local and national PV companies in Hawaii. These projects will provide real-world operational experience on their capability to increase solar interconnections on high-penetration circuits.

The company is also developing a community solar program as another option to help make the benefits of solar available to all customers, including those who may not be able to install rooftop solar (for example, renters or condo dwellers).

Hawaiian Electric is asking the PUC to approve the new program within 60 days. Under the utilities’ proposal, the Transitional Distributed Generation program would remain in effect while the PUC works on a permanent replacement program, to be developed through a collaborative process involving stakeholders from across the community, including the solar industry.

The PUC has stated it believes programs designed to support solar energy need to change. In an Order issued in April 2014, the PUC said:

“It is unrealistic to expect that the high growth in distributed solar PV capacity additions experienced in the 2010 - 2013 time period can be sustained, in the same technical, economic and policy manner in which it occurred, particularly when electric energy usage is declining, distribution circuit penetration levels are increasing, system level challenges are emerging and grid fixed costs are increasingly being shifted to non-solar PV customers.”

Across the three Hawaiian Electric Companies, more than 51,000 customers have rooftop solar. As of December 2014, about 12 percent of Hawaiian Electric customers, 10 percent of Maui Electric customers and 9 percent of Hawaii Electric Light customers have rooftop solar. This compares to a national average of one-half of 1 percent (0.5 percent) as of December 2013, according to the Solar Electric Power Association.

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LINK: View Q&A for our proposed plan

Star-Adv: HECO plans to reduce customer solar credits

...Hawaiian Electric Co. is expected to file a proposal Tuesday with the state Public Utilities Commission to cut nearly in half the net energy metering reimbursements offered to customers with rooftop photovoltaic systems.

The utility seeks to end the current NEM structure to make way for a new reimbursement model for rooftop-solar customers, said Leslie Cole-Brooks, executive director of the Hawaii Solar Energy Association, and Robert Harris, a representative of the Alliance for Solar Choice.

Customers now receive full retail credit for the excess net electricity sent to the grid from their rooftop PV systems. For January electrical bills the retail rate for Oahu customers is 29.5 cents per kilowatt-hour.

The utility will submit an application to the PUC requesting that the reimbursement rate be about 17 cents a kilowatt-hour, Cole-Brooks said.

The proposed reimbursement would change the credit that customers are receiving to a price structure closer to the base rate, Cole-Brooks said....

Accompanying the proposed changed reimbursement model for rooftop solar customers, the utility is expected to announce an increase in the capacity of rooftop solar that the grid can handle. Saturated areas are currently considered to have 120 percent photovoltaic penetration.

"They are recommending several changes, and some of them, including increasing the minimum daily load to 200 percent, is good news. It's going to open up circuits," Cole-Brooks said.... 

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