Hawaii solar boom may require power pricing change

OREANDA-NEWS. March 24, 2015. The growth of rooftop solar in Hawaii and the excess power it produces in the middle of the day might eventually force the state to change its retail electricity pricing to better reflect real-time prices, a state utility regulator said.

The state will need to switch to time-of-use pricing in response to an overabundance of solar generation on parts of the grid, Hawaii Public Utilities Commission member Michael Champley said. That form of pricing uses different rates at set times of the day so customers have an incentive to use more electricity when supply is abundant or less when it is scarce.

"We need to shift use from evening to midday," Champley said last week in Washington, DC, at a conference hosted by the Edison Foundation, an affiliate of the electric utility trade group Edison Electric Institute.

Hawaii still relies on oil for the bulk of its generation needs. But Hawaii's high electricity prices and net metering policies that let customers run their meters in reverse have resulted in the highest rooftop solar penetration in the US, reaching about 12pc of residential customers and providing 390MW of capacity. The state is widely seen as a harbinger of issues set to arrive in other parts of the US as renewable energy use grows.

Rooftop solar output on some circuits in Hawaii has started providing more than the minimum daytime load, posing potential reliability problems. Hawaiian Electric, the state's main utility, in 2013 started delaying interconnection requests for new rooftop solar on circuits where its capacity was nearing 120pc of daytime minimum load.

The utility in January proposed to raise this threshold to 250pc but asked state utility regulators for a new net metering policy to no longer pay the full retail rate of \\$0.30/kW-hour but instead use the cost of avoided generation. Hawaiian Electric said the existing policy causes customers without rooftop solar to compensate those that have it, even though they both use the grid.

Champley said the state went forward with rooftop solar "without a master plan" and needed to make sure customers that choose to install rooftop power were not harming customers without it.

Despite the controversy over rooftop solar, Hawaii's legislature support more renewable energy. Committees in the state's two legislature chambers endorsed bills this month that would raise the state's renewable portfolio standard to 100pc by 2040.