Hawaii Ends Expensive Net Metering Scheme

by H. Sterling Burnett, Ph.D., Heartland.org November 9, 2015 

Hawaii is ending its expensive and controversial net metering program for people installing roof top solar systems on their homes or businesses. Net metering programs allow rooftop solar customers to shift the costs of operating the grid to full-service customers, while still benefiting from access to the grid’s physical infrastructure to import and export power. The program credits the bills of rooftop solar customers for the amount of excess power they produce at full retail value of electricity, rather than the wholesale rates other electric power producers are paid. The Hawaiian Electric Co. reports in 2013 the cost shifted to its full-service customers from the net metering scheme totaled $38.5 million, or 1.3 percent of the collected rates for the Honolulu-based utility and its subsidiaries Maui Electric Co. and Hawaii Electric Light Co.

The October 12 decision by Hawaii Public Utilities Commission to close the net metering scheme to new participants does not affect existing participants or those who were already under contract to have roof top solar installed at the time of the decision.

New Scheme Replaces Old

Going forward, Pacific Business News reports, instead of net metering, new customers will be able to apply for fast-track approval to interconnect their systems under the “self-supply” option or standard review for the “grid-supply” option. Under the self-supply option new roof top systems will still be allowed, but any excess power generated beyond what the new roof top solar customer needs for his or her home or business will flow to the grid free of charge. New PV customers will not be paid for the excess power they generate.

Customers choosing this option will have a monthly minimum bill of $25 for residential customers and $50 for small commercial customers to pay their share of maintaining the electric grid.

The grid-supply option allows new roof top solar customers to export excess energy to the grid in exchange for energy credits against the customers’ bills, to the extent such energy export provides benefits to the electric system. The latter option is similar to net metering, although instead of getting credited for the full retail rate for the energy they produce, customers will be credited for a fixed rate between 15 cents and 28 cents per kilowatt-hour, depending on the island the customer lives on.

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H. Sterling Burnett, Ph.D., (hsburnett@heartland.org) is the managing editor of Environment & Climate News.