Honolulu, HI —

Yesterday, the Public Utilities Commission of the State of Hawai‘i (PUC) approved an initial rollout of long-awaited “feed-in tariffs”, a rewards program to promote renewable energy. This will allow homes and business to get paid for building renewable energy systems like rooftop solar and feeding the energy into the electric grid. Hawai‘i will be one of the first places in the United States to adopt such a program, versions of which have led to rapid and widespread adoption of renewable energy in Europe.

The PUC rejected the proposals of the Hawaiian Electric Company utilities (HECO) to cancel or delay the rewards program, and even impose blanket bans on solar panels and other renewable energy systems on HECO’s neighbor island grids. Instead, the PUC ordered HECO to rollout the program on all its grids statewide within six weeks.

The Hawai‘i Solar Energy Association (HSEA), represented by Earthjustice, opposed HECO’s proposed bans and delays before the PUC.

“We’re pleased that the PUC decided against any further bans or delays, which would only prolong Hawai‘i’s addiction to imported fuels and weaken one of the few sectors of Hawai‘i’s economy that’s creating jobs,” said Mark Duda, President of HSEA. “This launch of the rewards program is a small, but important step forward that we hope will build some momentum towards weaning ourselves off of increasingly expensive imported fuels.”

The PUC’s order, however, also raised concern and disappointment among the solar industry and renewable energy advocates. The PUC adopted wholesale HECO’s proposed program terms, which are unfriendly to renewable energy financing and development and undermine the rewards program’s basic goal to streamline and make transparent the process of introducing renewable energy into the grid. The solar industry association objected to provisions giving the utilities free rein to “curtail” or halt the energy production — and, thus, the revenue stream — of renewable energy projects and impose unspecified grid interconnection costs, which undermine project feasibility. The PUC acknowledged “valid issues” raised by the non-utility parties, but accepted HECO’s proposed terms without modifications and offered to “learn from experience.”

“At every point in developing this renewable energy rewards program, HECO has made it needlessly difficult for solar and other renewable energy to succeed,” said Earthjustice attorney Isaac Moriwake. “We’re relieved that HECO’s proposed bans and delays failed, but also disappointed that HECO managed to skew the program’s terms in its favor, in ways that will slow the deployment of renewable energy systems.”

The rewards program proposal originally arose out of the October 2008 Energy Agreement between HECO and various state parties, which outlined a broad clean energy agenda, including 70 percent clean energy use by 2030. The Energy Agreement featured the program as a way to “dramatically accelerate the addition of renewable energy from new sources.”

The PUC began working on the program in October 2008 and issued an order in September 2009 establishing the program guidelines, which expanded the size of the program beyond what HECO advocated. Over the next year, controversy and delay ensued as HECO’s proposals for program implementation contained many unfavorable terms for renewable energy development, including the proposed bans and delays that would have effectively rewritten the PUC’s September 2009 order.

“Despite all of HECO’s efforts to slow it down, we remain hopeful that the rewards program will eventually succeed in its mission ‘to dramatically accelerate the addition of renewable energy from new sources,’” said Duda. “As industry members and market participants, we will continue to do our best to make this work in both the regulatory process and the marketplace.”