HECO Files Proposal to End Solar Net Metering

January 26, 2015 By Karen Henry

hawaii rooftop solar energy manageHawaiian Electric Companies (HECO) has filed a proposal with the Hawaii Public Utilities Commission (PUC) to move away from traditional solar net metering, Greentech Media reports. HECO would like to end its solar net metering program by April.

HECO is proposing to replace the solar net metering program with a transitional tariff program, which will pay customers a credit for solar energy exported to the grid based on measures of the cost of wholesale power for the islands’ utilities.

The change will prevent distributed solar from overwhelming grid stability, forcing non-solar customers to pay additional costs and squeezing out less expensive forms of renewable energy, HECO said.

HECO explained the tariff would be a transitional step toward a new distributed generation program, which will allow customers to make money from self-generated power that also supports the grid by including smart inverters, energy storage, demand response and other technologies.

HECO owns the utilities on the islands of Oahu, Maui and Hawaii.

Hawaii is one of a number of states that are working on reforms to energy policy that could lead to significant changes to their net metering programs.

In 2013, the Arizona Corporation Commission (ACC) determined that the net metering program in place at the time created a cost shift, causing non-solar utility customers to pay higher rates to cover the costs of maintaining the electrical grid. As a result, the ACC instituted a charge on future customers who install rooftop solar panels.

Utilities in Minnesota had also complained that paying the retail rate via net metering had become over-advantageous to solar customers at the expense of non-solar customers, so last year, Minnesota utility regulators allowed state investor-owned utilities to either pay customers the retail electricity rate for unused electricity they contribute to the grid or voluntarily apply to use a “value-of-solar” formula, which incorporates the federal government’s social cost of carbon figure and reflects all of the costs and benefits to all parties involved, including utilities, solar owners and other ratepayers.

Photo via Shutterstock.

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