Hawai‘i is often called a “postcard from the future” on clean energy. The 50th state leads the nation by far on the amount of rooftop solar installed per person. Around 100,000 rooftop systems, totaling one billion watts, have already been installed.  This is roughly enough energy to power 100 million LED light bulbs and includes over one-third of single family homes across the islands.  

Hawai‘i was also the first state to commit to a 100% renewable mandate for electricity in 2015, and more states and cities are following suit. Hawai‘i’s main utility, Hawaiian Electric (HECO), recently reached 40% renewable generation, with half of that power coming from rooftop solar. This shows how local energy sources like rooftop solar will be a main part of our clean energy future.

In November 2022, Hawai‘i took another major step forward on rooftop solar and clean energy. The state Public Utilities Commission (PUC), the agency that regulates our electric utilities, issued two major landmark decisions leading the way on smart policies and programs for rooftop solar and our electric grid.

The first decision adopts a comprehensive new structure for electric rates based primarily on “time of use” rates, which match the prices utility customers pay for electricity with the value of the energy at the time it’s used. As the PUC explained, this new rate design is a “milestone accomplishment” that “align[s] with a modern grid and provides customers with opportunities to save money” by maximizing use of clean energy instead of fossil fuels.

The second decision creates new programs for customers to install solar and battery systems and get paid for sharing clean energy with the grid when most needed. These “Bring Your Own Device” programs will activate customers’ clean energy systems as a working part of the grid to supply energy, save costs, and reduce pollution for everyone.

These decisions establish key pillars for the clean grid of the future, in which customers can help rebuild the grid from the bottom up. Distributed energy like rooftop solar and batteries can turn our homes and businesses into mini power plants and our neighborhoods and communities into mini grids. As recently seen in Puerto Rico, when the latest hurricane hit and the centralized fossil-fueled grid went dark, distributed solar resources kept running.
 
The recent Hawai‘i decisions offer a model for other states and utilities across the nation, many of which have also been struggling with how to fully embrace rooftop solar. The decision on utility rates is a particularly important and historic step forward in the ongoing battles over utilities trying to saddle customers with fixed charges to protect their monopoly business. Like many other utilities, HECO proposed high fixed monthly charges that customers would have to pay regardless of how much energy they actually use.

Utilities, of course, like the idea of captive customers paying them no matter what. But such fixed charges abuse the utility’s monopoly power and reduce the customers’ power to control their own bills through options like energy efficiency and rooftop solar. Fixed utility charges also impose unfair burdens on lower usage and lower income customers.

Earthjustice, representing the Hawai‘i rooftop solar industry and working with Jim Lazar, a leading expert on rate design, opposed HECO’s proposed charges, and the PUC agreed. It rejected HECO’s proposal to expand their antiquated system of “demand charges,” under which customers pay fixed charges based on their highest metered demand, and not how much energy they actually use.

Instead, the PUC adopted our proposal to include most of the grid costs in time-based rates that are lower during the day when cheaper solar energy is abundant, and higher between 5 and 9 PM when demand peaks and requires use of more expensive energy including fossil fuels. This will encourage customers to save money and reduce fossil fuel reliance by doing their laundry, pre-heating water, or charging their electric vehicles during the day (or later at night).

In short, instead of the utility’s traditional “dumb” rates geared toward paying the utility to build more fossil fuel infrastructure, Hawai‘i is shifting to a smart rate paradigm that maximizes clean energy use and customer savings opportunities. These advances also light the way for other utilities across the country to stop fighting against their own customers and instead embrace customer-based resources like rooftop solar as a win-win-win for customers, the grid, and the planet.  

The PUC will phase in the new rates over time, starting with an initial rollout to a first group of customers on July 1, 2023. Much more work will be necessary to implement this shift. Earthjustice has engaged on the Hawai‘i clean energy front for more than a decade and is committed to get the job done. 

Customers in Hawai‘i, for our part, can get ready and get active to save some money and help save our planet. And other states can look to Hawai‘i for another “postcard from the future” on how to embrace and enable customer rooftop solar as true force in the clean energy revolution.