HawaiiThe energy industry in Hawaii has been quickly making changes in order to adapt to solar power. This is a direct result of the high energy costs that are related to providing electricity to the island state. As a result, the state now boasts not only an abundance of solar resources, but also one of the largest per capita percentages of solar powered homes and businesses in the United States.

Solar Energy in Hawaii

Hawaii’s cost to import traditional energy sources, such as coal and petroleum are up to four times as higher as states on the mainland. This means that Hawaii is one of the states that has plenty of motivation in its efforts to become a top user of solar energy in the country, and the state is accomplishing this goal with huge incentives for property owners who choose to install solar panels.

Hawaii one was of the first states in the country to meet the socket parity for photovoltaics, and because of its location, the sun offers an abundance of natural energy.

The bulk of the island’s solar energy is distributed through solar panels in Hawaii as previously mentioned. The grid on the island has been finding ways to handle this unique challenge by creating solar technology that allows for the balancing of energy into areas of the island that has huge amounts of solar energy.

In fact, in 2017, the solar energy that was produced on the island and distributed accounted for almost 40% of all of the renewable energy sources that were made in the state. In addition, this renewable energy source also accounted for almost 10% of the energy sales in the state.

Brief History Of Solar Power In Hawaii

With its renewable portfolio standard, the state has a goal of having renewable energy use on the island to make up 40% of the total energy used on the island. This is one of two goals, with the deadline of meeting this goal scheduled for 2030. The second goal is to be at 100% renewable energy by 2045.

The electrical grids that service the state are spread throughout the islands, and they are relatively smaller than the grids seen on the mainland. When contractors have attempted to build distributed solar grids in certain areas it caused problems.

It eventually led to HECO (Hawaiian Electric Company) rolling back its net-metering program. This program offered solar home and business customers reimbursements for the extra electricity they returned to the electrical grid. It was not too long after this rollback that solar customers could no longer justify the costs of installing solar panels, and the island saw a sharp decline in solar energy use.

New Solar Panels Laws

In 2019, HECO reversed its stance once again. The new law allows solar energy customers to once again connect to the grid and receive credit for all of the energy their properties return to the grid.

Referred to as the ‘Customer Grid Supply Plus‘, it allows for residential solar customers who do not use batteries the opportunity to use solar energy as their main source of energy. Extra electricity is returned to the grid. However, there are a few caveats to this law that solar energy customers should be aware of.

Solar Payback Credit For Using Solar Panels In Hawaii

Solar PanelHomeowners and business owners can choose to purchase a solar energy system that includes solar panels, or they can choose to lease. Studies have shown that property owners that choose the purchase option see the greatest return on their investment over time. However, choosing to pay for solar panels requires a huge upfront payment.

The state has unique laws on how the ‘solar payback’ is distributed among customers. As previously mentioned, the Customer Grid Supply Plus program allows customers to use the solar energy that is generated by their solar panels, but the excess energy is given HECO. HECO then distributes this excess solar energy to other customers.

So, what does this mean? Under this program, customers can use as much solar energy that their system creates as long as the sun is shining. Once the sun goes down, the extra energy is recycled.

In most of the other states, customers are given complete credit for all of their solar energy. Whatever energy they need during the night is cancelled out by the amount of energy they have already sent to the grid.

On the other hand, in Hawaii, customers receive what is known as a reduced cost credit for the extra electricity. For example, if a customer lives on the island of Maui, and they are paying $.20 per kWh (kilowatt hour), another customer on Oahu may only be $0.159 for each kilowatt per hour.

The reduced cost credit makes it very difficult to estimate just how much a customer will be saving, and this is one of the reasons why solar customers in Hawaii are calling for change in the way HECO calculates and credits customers for solar energy and solar PV panel use.