Note: On October 12th, 2015 the Hawaii Public Utilities Commission (PUC) voted to end net metering in favor of two alternative options: a grid-supply option and a self-supply option. Customers with net energy metering applications submitted before October 12th will have the option of continuing with net metering described below. The PUC is currently considering changes to these options.

Community renewable energy tariffs have been proposed by Hawaiian utilities pursuant to S.B. 1050 and are currently being reviewed.

Eligibility and Availability

Net metering is available on a first-come, first-served basis to residential and "small commercial" customers (including government entities) that generate electricity using solar, wind, biomass or hydro-electric systems. Third-party owned and operated systems are eligible to participate in net metering (leased systems and systems with a third-party power purchase agreements can participate in net metering). Under the terms of the March 2008 and December 2008 PUC orders, Hawaii's three investor-owned utilities (HECO, HELCO and MECO) and sole electric cooperative (KIUC) have slightly different programs:

For customers of Hawaiian Electric Company (HECO), the maximum individual system capacity is 100 kW. The aggregate capacity of net-metered systems is limited on a per-circuit basis to 15% per circuit distribution threshold for distributed generation penetration. Of this 15% in peak circuit demand capacity, 5% (or 0.75% of overall peak circuit demand capacity) will be reserved for residential or small commercial systems that are 10 kW or smaller.

For customers of Hawaii Electric Light Company (HELCO) and Maui Electric Company (MECO), which are both subsidiaries of HECO, the maximum individual system capacity is 100 kW. The aggregate capacity of net-metered systems is limited on a per-circuit basis to 15% per circuit distribution threshold for distributed generation penetration. Of this 15% in peak circuit demand capacity, 5% (or 0.75% of overall peak circuit demand capacity) will be reserved for residential or small commercial systems that are 10 kW or smaller.

For customers of Kauai Island Utility Cooperative (KIUC), the maximum individual system capacity is 50 kW. The aggregate capacity of net-metered systems is limited to 1% of KIUC’s peak demand. Of this 1% limit, 50% is reserved for systems 10 kW or smaller.

Net Excess Generation

The March 2008 PUC order also required each utility to develop a pilot program allowing net metering to a limited number of systems 100 kW to 500 kW in capacity, while allowing for even larger systems "if technically and economically reasonable and practicable." KIUC currently has a pilot net metering program for systems up to 200 kW. Under the pilot program, customer-generators will be paid $0.20 per kilowatt-hour (kWh) for a system's net excess generation at the end of each year. Participants can receive this payment for net excess generation for a 20 year term.  

A customer whose system produces more electricity than the customer consumes during the month may carry forward NEG in the form of a kilowatt-hour (kWh) credit that is applied to the customer's next bill. NEG may be carried over for a maximum of 12 months. At the end of the 12-month period, any remaining customer NEG credits are surrendered to the utility without compensation (unless the customer enters into a purchase agreement with the utility).

Virtual Net Metering/Community Solar

SB 1050 mandates that utilities propose community renewable energy tariffs by October 1st, 2015. The tariffs must:

• Allow an electric utility customer to participate in an eligible project
• Be designed to provide fair compensation for electricity, electric grid services, and other benefits provided to or by the electric utility, participating ratepayers, and non-participating ratepayers
• Allow the electric utility to implement a billing arrangement to compensate customers for electricity and grid services
• Standardize and streamline interconnection processes for community-based renewable energy projects.

Any entity with an eligible facility that meets compliance requirements can become subject to a community renewable energy tariff.

History

Hawaii's original net-metering law was enacted in 2001 and expanded in 2004 by HB 2048, which increased the eligible capacity limit of net-metered systems from 10 kilowatts (kW) to 50 kW. In 2005, the law was further amended by SB 1003, which authorized the Hawaii Public Utilities Commission (PUC) to increase certain limits outlined in the law and provided for the carryover of net excess generation (NEG) to the customer's next bill. In March 2008, the PUC issued an order to implement SB 1003. This order generally raised both the individual system capacity limit and the aggregate capacity limit for net-metered systems. In October 2008, Hawaii's governor; the Hawaii Department of Business, Economic Development and Tourism; the Hawaii consumer advocate, and the HECO companies entered into an energy agreement, a product of the Hawaii Clean Energy Initiative. This agreement provides that there should be no system-wide caps on net metering, and that net metering should transition towards a feed-in-tariff. In December 2008, the PUC issued an order to raise the aggregate capacity limit for net-metered systems in the service territories of HELCO and MECO. In January 2011, the PUC issued an order approving changes to Kauai's program, which was full, and the aggregate capacity limits for HECO companies were lifted and are now based on per-circuit caps rather than a percentage of peak demand.