Hawaii residents who live in condos and apartments without access to rooftop solar soon may be able to join the state’s renewable energy push, thanks to a new program approved last week by state energy regulators.
Hawaii’s long-awaited Community-Based Renewable Energy Program is designed to let residents, including renters, buy their electricity from off-site producers of renewable power.
The first phase will focus on solar farms developed by parties other than Hawaiian Electric Co. Inc.’s utility companies. Customers will be able to buy subscriptions to acquire energy from such a solar farm and receive a credit on their HECO electric bill.
Key details – on how to sign up and how much people might be able to save on their power bills – remain unclear. But the program is officially off the ground.
HECO has 60 days to submit details to implement the program, at which time details should become clearer, said Randall Iwase, chairman of the Hawaii Public Utilities Commission. The program applies only to HECO customers, on Oahu, Hawaii Island, Maui, Molokai and Lanai. A separate program is being developed for customers on Kauai, Iwase said.
“I am quite certain that when they finalize everything, it will be much clearer for residents on how to enroll in the CBRE program,” Iwase said. “We want to make sure it’s an easy road for applicants to participate.”
The PUC issued the 156-page order and attachment issued late Friday, just before the long Christmas weekend, and local energy experts were still digesting the dense document Tuesday.
While some details remain unclear, the program provides another tool for the Hawaii to reach its legal requirement to produce 100 percent of its electricity from renewable resources by 2045.
“Community solar democratizes access to clean energy,” said Melissa Miyashiro, chief of staff for the Blue Planet Foundation, a nonprofit that supports the development of renewable energy resources in Hawaii. “We believe everyone should have the opportunity to choose clean energy for their home or business.”
In a statement issued on Tuesday, HECO’s senior vice president for business development and strategic planning, Shelee Kimura, said the company was pleased with some aspects of the order, which came after more than two years of rigorous debate before the regulatory commission.
“We are eager to provide our customers with more options through a community solar program,” Kimura said in a written statement. “Reviewing the commission’s order, we are pleased with the improvements over the plan put forward ten months ago, especially for the first phase which has been made simpler for participants, developers and administrators.”
However, Kimura said, the company is still assessing the PUC order and its implications.
The community-based renewables plan was established by legislation passed in 2015 and signed into law as Act 100, part of Hawaii’s aggressive push to adopt renewables.
Hawaii is the first state to impose a statutory deadline for producing 100 percent of its electricity from renewable resources. And that policy, which has been supported by tax incentives to encourage people to put solar cells on their roofs, is producing results: in 2016 Hawaii led the nation in per capita generation of solar energy from distributed resources like rooftop solar panels, according to the U.S. Department of Energy’s Energy Information Administration.
Still, not everyone has been able to participate in the push, in part because of where they live and the type of building they live in. As a general rule, most people who live in condos and apartments, especially renters, can’t get their power from solar. Act 100 sought to solve this inequity by expanding the market to include such people.
Although the Legislature provided broad policy goals, it was up to the PUC and various stakeholders to fill in the details. Various parties participated in the proceeding, including solar energy business associations and organizations such as Blue Planet, the environmental non-profit Life of the Land, and Earthjustice, a non-profit environmental law firm.
The debate, laid out in filings before the PUC, involved thorny technical issues such as the amount of credits that customers would receive for subscribing to the communal solar farms, including whether the amount of the credits would vary depending on the time of day the energy was produced.
Another key question: whether HECO should be able to build large, “utility-scale” solar farms to act as community-based resources.
In the end, the commission decided on a simplified Phase 1, which includes, among other features, a credit rate that does not vary depending on the time of day, although the rate does vary by island. Another provision: HECO can’t develop community solar farms during the program’s first, year-long phase.
The idea, the order says, is to develop a market of private energy producers to supplement the electricity produced by Hawaii’s power monopoly. During Phase 1, HECO must administer the program but can’t produce energy for it.
“The commission has a strong preference for participation by interests that are not affiliated with the utilities to allow this nascent market to develop without direct or perceived conflicts of interest,” the commission wrote in the community-based renewables order.
The first phase is limited to eight megawatts, or about 2,500 customers, although the second phase will expand the program to add 64 megawatts.
HECO can build its own solar farms during the second phase but must set aside at least 50 percent of the energy produced by its company-owned community projects for low- and moderate-income customers, the order says.
Isaac Moriwake, an attorney with Earthjustice, commended the PUC for starting with a straightforward plan that helps ensure a growing market of renewable energy providers.
“That’s the best way to get the market going with minimum complications, and we can adjust from there,” he said.
Still, Moriwake echoed others in saying he was disappointed with the relatively small scale of the program.
“The first phase of the program is much smaller than what I would have liked to see with an eight-megawatt cap, and phase two adding just another 64 megawatts,” Sen. Mike Gabbard, who sponsored the community-based renewables bill, said in a statement. “This doesn’t come close to meeting the demand that’s out there. I’m hopeful that an unrestricted solar program can evolve in the future.”
The credit customers will receive on their power bills will vary depending on the island where they live. Oahu residents can receive 15 cents per kilowatt hour, while Lanai residents will receive 26 cents.
In theory, that could translate into significant savings for Hawaii residents, who pay the nation’s highest rate for power: about 29 cents per kilowatt hour for electricity in October 2017, more than twice the national average of 13 cents, according to the Energy Information Administration.
Precisely how much a customer will save will depend on a formula that includes the size of the subscription and the amount of energy they used the previous year, the order says.
Regardless, renters will be able to avoid using electricity produced by oil and coal, which are still the primary fuels used to produce HECO’s power.
Also unclear is whether the program will be attractive enough for developers to step in to build the community solar facilities that will provide power to the remote customers.
“That’s the $64,000 question,” Iwase said.
The PUC sought to create a program that will attract both customers and developers of renewable energy facilities, Iwase said.
“This is like the tip of the spear, and we’re giving it our best shot,” he said.