Proposals would lower solar credit

New solar customers will likely get a lower credit for the energy their systems send to the grid, as solar companies and Hawaiian Electric Co. agreed that the current rate should be reduced.

HECO and an alliance of solar companies submitted proposals to the Public Utilities Commission on Monday looking to reduce the amount solar customers are credited for the energy their systems feed into the grid.

In the Monday filing, HECO proposed to credit new solar customers on Oahu at a rate of 18 cents per kilowatt-hour for all solar energy sent to the grid. Currently solar customers are paid the retail rate, or the rate HECO charges for electricity, which was 26 cents per kilowatt-hour in May on Oahu. The average rate for 2014 was 35 cents.

Customers with rooftop solar already installed or who have a pending application would be grandfathered in, HECO said.

Solar companies banded together to submit two separate proposals to the PUC, both of which would lower the rate paid for rooftop solar power but not as much as HECO proposed.

One solar industry proposal would require solar customers to pay a toll of 4 cents per kilowatt-hour, which would result in customers being credited 22 cents per kilowatt-hour for the energy they send into the grid.

The second proposal is a time-of-use rating system. The system would increase the amount all customers pay to 46 cents per kilowatt-hour from 2 to 8 p.m. and lower it to 18 cents per kilowatt-hour all other times of the day. The plan is intended to reflect the higher cost of power during peak hours, industry officials say.

Solar companies and HECO also proposed changes in the minimum charge per month for solar customers. The current minimum bill for all residental customers is $17 on Oahu, $18 on Maui and $20.50 on Hawaii island.

In a filing with the PUC, solar companies proposed to change the minimum fee for all customers to $25.31.

HECO proposed to change the minimum bill for new rooftop solar owners to $25 on all islands.

Solar advocates say HECO’s minimum fee unfairly targets one group of customers.

"For HECO, this is about competition — solar is the first real form of competition they have ever faced, so they are trying to tax it and make it less attractive to consumers," said Robert Harris, Hawaii representative for The Alliance for Solar Choice.

Restructuring the rate paid to future solar customers with rooftop solar is what is fair, HECO said. The utility said in 2014 that nonsolar customers paid an additional $53 million in operation and maintenance costs to compensate for the low electrical bills of solar customers. Solar advocates have questioned that figure, saying it doesn’t take into account the savings derived from increased solar use.

HECO says the changes in solar pricing are needed to more equitably share the cost of maintaining the grid between solar and nonsolar customers as solar continues to expand.

"With levels of solar energy in Hawaii that are 20 times higher than the nationwide average, these proposals provide greater access to rooftop PV while helping ensure the longevity of programs in a way that protects reliability, safety and fairness for all customers," said Jim Alberts, HECO senior vice president of customer service. "We support and expect continued growth of rooftop solar."