Hawaii Acts to Protect Solar Users from BYOD Incentive Challenges

n Hawaii, known for its pioneering efforts in the solar arena, about one-third of homes have embraced rooftop solar panels —a testament to the state's commitment to clean energy. This commitment has not only allowed the island to combat its notoriously high electricity rates but has also led to the creation of a flexible and resilient grid system. The integration of energy storage played a big role here, as highlighted by the Energy Department’s Berkeley Lab’s Tracking the Sun report, which shows that battery storage was part of over 90% of the new installations in 2022.

Despite this success, a recent shake-up in the incentives for solar energy has raised concerns. To address this, lawmakers have put forward a proposal aimed at boosting the compensation for solar energy that's stored and then sent back to the grid. Let's dive deeper into these developments.

Hawaii's Solar Power Scene

Hawaii's switch to solar is a classic case of turning a challenge into an opportunity. Thanks to its sunny climate, solar energy is a perfect fit for the islands. But there's more to the story than just great weather. Hawaii faces some of the steepest electricity bills in the country, mainly because it imports a lot of expensive oil and coal for power. These costs are way higher than on the mainland, pushing Hawaii's electricity prices to nearly three times the average in the rest of the U.S. The financial squeeze is a big reason why Hawaii has embraced inexpensive solar energy so enthusiastically, leading the way in solar power use per person.

This effort has been remarkably successful. Hawaii led the U.S. in reaching a point where making electricity from the sun is as cheap as buying it from the power company, a big win for solar power's affordability and eco-friendliness in the state. According to the Energy Information Administration (EIA), in 2022, about 17% of all the electricity used in Hawaii came from solar panels, especially from those installed by homeowners and businesses. This puts Hawaii in the top ten states for solar energy production.

The Shift in Solar Incentives

In a push to embrace green energy, Hawaiian Electric, the state's leading electricity supplier, introduced the Battery Bonus (BB) program in July 2021. Aimed at residents of Oahu and Maui, this innovative plan was designed to encourage the adoption of solar paired with battery storage by offering enticing upfront and ongoing payments.

At the heart of the BB program's appeal was its strategy to reduce the initial financial barrier of adding battery solar storage. Homeowners were greeted with a generous offer: an upfront payment of $850 per kilowatt-hour (kWh) of battery capacity they enrolled — a move that translated to $4,250 for a good solar battery installation. Additionally, the program rewarded participants with $5 per kW of battery capacity each month, fostering an ongoing partnership between homeowners and the grid.

Despite net metering's conclusion in Hawaii in 2015, the BB program carved a new path for residents to enhance their household solar power systems and share excess electricity with their community, especially during peak demand times. This strategy led to the enrollment of over 46 megawatts (MW) of combined rooftop solar and storage setups, providing a crucial buffer during times of grid strain and high demand.

As impactful as it was, the Battery Bonus program reached its capacity limit by December 2023, marking the end of an era. Its successor, the Bring Your Own Device (BYOD) program scheduled to launch on April 1, has stirred a mix of anticipation and concern among renewable energy advocates. Where BB offered a substantial upfront incentive, BYOD caps this at a mere $500 in total, marking a significant shift in the financial dynamics for participants. Furthermore, BYOD changes the energy distribution rules, asking participants to feed the grid on-demand, which could potentially disrupt the delicate balance of electricity pricing and grid participation.

Critics of the BYOD program, including Rocky Mould, the Executive Director of the Hawaii Solar Energy Association, view this change as a step backward for Hawaii's clean energy ambitions. “This decision is an about-face for Hawaii’s leadership and aspirations on clean energy, including the prior work of the PUC. It undoes years of progress to enable customers to lead the way on adopting clean energy to reduce our reliance on fossil fuels and reduce costs for everyone,” said Mould.

Addressing BYOD's Challenges: The Introduction of HB 1687

In response to the challenges posed by BYOD, Hawaii's lawmakers have stepped up, introducing Bill HB 1687 in February 2024. This move is set to tackle the downsides brought about by the shift to the BYOD program. Specifically, the bill seeks to enhance the deal for solar panel owners who contribute their excess solar energy back to the grid, making it more worthwhile for them.

Under BYOD, solar energy contributors faced a situation known as "reverse arbitrage," where the incentives didn't quite match up with the value of the energy provided. This discrepancy has been a barrier for many, potentially leading to a less efficient and more constrained energy grid.

HB 1687 proposes a simple yet effective solution: ensuring that solar energy exports are compensated at the full retail rate. This change means that if you have excess energy from your home solar array, you can either use it yourself or send it back to the grid without losing out financially. It effectively removes the dilemma between self-consumption and grid contribution, making it an easier and more appealing choice for solar panel owners.

By aligning incentives with the broader needs of Hawaii's power grid, HB 1687 is set to motivate more individuals to share their solar energy. This initiative is expected to lead to a more stable and dependable grid, crucial for minimizing blackout risks and maximizing the benefits of Hawaii's substantial solar energy investments.

Navigating Changes in Hawaii's Solar Landscape

Hawaii has made great strides with solar energy, with many homes installing solar panels to lower their electricity bills and make their electricity supplies greener. The transition from the generous Battery Bonus to the more restrained BYOD program has sparked debate and concern. However, the new HB 1687 bill offers hope, aiming to make things right by ensuring homeowners are fairly paid for the solar electricity they feed back into the grid. This bill could safeguard Hawaii's progress with solar power and make the grid more stable and fair, keeping the benefits of solar positive for everyone.

Sources:

https://emp.lbl.gov/sites/default/files/5_tracking_the_sun_2023_report.pdf

https://www.eia.gov/state/print.php?sid=HI

https://www.hawaiireporter.com/

https://www.capitol.hawaii.gov/sessions/session2024/bills/HB1687_.HTM