Hawaii Sets Dynamic Goals for Clean Energy

Gwen Yamamoto Lau

Hawaii has experienced ups and downs in its ambitious solar programs, according to Gwen Yamamoto Lau, executive director of Hawaii Green Infrastructure Authority (HGIA). In this interview, she describes her state’s journey toward its 100-percent-renewable energy goal.

CEFF: How would you describe the solar-energy market's current successes and challenges in Hawaii?

Lau: As one of the market leaders with aggressive clean energy goals, Hawaii’s early success in solar adoption, with the market close to doubling every year from 2010 to 2013, resulted in necessary policy changes, which unfortunately negatively impacted Hawaii’s then-robust solar industry.

In October 2015, Hawaii’s Net Energy Metering (NEM) Program was closed and replaced by two new programs, Customer Grid-Supply (CGS) and Customer Self-Supply (CSS). The CGS program has a capacity limit and will be closed when the installed capacity is reached.

Customer Grid-Supply participants receive a commission-approved credit for electricity sent to the grid and are billed at the retail rate for electricity they use from the grid.

Customer Self-Supply is intended only for private rooftop solar installations that are designed to not export any electricity to the grid.

In October 2017, the commission introduced two additional programs, Customer Grid-Supply Plus (CGS Plus) and Smart Export.

Customer Grid-Supply Plus systems include grid-support technology to manage grid reliability and allow the utility to remotely monitor system performance, technical compliance and, if necessary, control for grid stability.

Smart Export customers with renewable systems and battery energy storage systems have the option to export energy during specific time periods. Systems must include grid-support technology to manage grid reliability and system performance.

Unlike net energy metering, which provided ratepayers credit for unused electricity exported to the grid at retail rates, these new programs significantly decreased the value of exported energy. CGS credits range from 15.07 cents to 27.88 cents and CGS-Plus credits range from 10.08 cents to 20.80 cents/kWh. CSS does not allow any electricity to be exported.

The Smart Export program pays between 11 cents and 20.79 cents/kWh exported to the grid. However, this program also requires a battery energy storage system, as electricity can only be exported [between] 4:00 P.M. and 9:00 A.M.

While innovative, these new programs are more complicated, making it difficult for ratepayers to understand and easily calculate a return on their investments.

Further, as a lender that relies on the excess cash flow of the utility-bill savings as a source of repayment for the loans advanced to install solar systems, these programs require more rigorous analysis, including an understanding of the borrower’s energy profile. This “energy profile” is used to calculate an applicant’s coincident load - an estimate of the percentage of kWh consumed while being produced and the remaining percentage of the kWh produced and exported to the utility grid.

However, as the cost of energy storage solutions continue to decrease and consumers gain a better understanding of the renewable energy programs available, there has been an increased adoption of solar+storage in the Hawaii market.

Adding to the sense of urgency is the Dec. 31, 2019 deadline before federal solar tax credits begin to wind down.

CEFF: What is your perspective on the energy efficiency market's successes and challenges at this time in Hawaii?

Lau: Hawaii has been successful in the energy efficiency market due to the existence of the following key ingredients:

  • Aggressive clean energy goals (such as reduction of energy consumption by 30 percent by 2030; net zero target for University of Hawaii system by 2035, etc.)
  • High cost of energy
  • Generous rebates and progressive energy efficiency programs offered by our Public Benefits Fund Administrator (PBFA)

However, increasing energy efficiency adoption also requires providing access to capital to a broader range of ratepayers. Over the past year, we focused on introducing the following flexible financing programs to accelerate energy efficiency and renewable energy adoption:

  • Green Energy Money $aver (GEM$) On-Bill Program
  • Energy Efficiency Revolving Loan Fund (RLF) for state agencies ($50.0 million)

With 43 percent of Hawaii’s households renting and 48 percent of Hawaii’s households ALICE and below, GEM$ removes credit barriers from our state’s most vulnerable households while unlocking clean energy for property renters, nonprofit organizations, and small businesses. (ALICE is a United Way acronym which stands for “Asset-Limited, Income-Constrained, Employed.”)

Additionally, the Energy Efficiency RLF enables state agencies, which are some of the largest consumers of energy in Hawaii, the flexible and simple option of installing energy retrofits while paying for these installations through their utility-bill savings.

CEFF: What stakeholder decisions would catalyze forward movement in these two markets in Hawaii?

Lau: While Hawaii has been successful thus far, we still have a long and expensive journey ahead of us to reach our 100-percent-renewable energy (and other clean energy) goals.

Decisions that could help catalyze forward movement include:

  • Policies regarding electrification of transportation
  • [Goals for] increased [public] loan capital to leverage private capital
  • [Creation of] financing programs and incentives (tax credits and rebates) that are aligned with renewable energy and energy efficiency programs available to ratepayers

Note: Emma McDonald contributed research to this article.

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