The leading state for residential solar-plus-storage systems passed a bill to further increase its rooftop solar and battery storage installations.
Hawaii lawmakers unanimously passed legislation to advance the state’s rooftop solar and storage buildout, which already has the most mature rooftop solar market in the United States.
Under SB 589, the Public Utilities Commission (PUC) will be required to establish a goal of installing 50,000 new customer-sited distributed energy resources, such as rooftop solar and battery storage, in Hawaii before 2031.
The goal is ambitious, but Hawaii leads the country for residential solar-plus-storage systems. According to the legislature, 96% of all residential rooftop solar installations in Hawaii include energy storage.
The law would also direct the PUC to establish, rather than use, tariffs for grid service programs, microgrids, community-based renewable energy and “wheeling”. (Wheeling is the transmission of renewable electric power from a storage or an energy generation system through the utility meter for consumption by a separate utility account holder.) The PUC would be required to establish policies and procedures to implement wheeling and microgrid service tariffs before 2027.
The legislation provides for “fair compensation for solar and energy exports” under its requirement for customers in grid service programs to be compensated for any excess energy exported to the grid from their solar-plus-storage system at the full retail rate of electricity.
According to the legislature, Hawaiian Electric service territories achieved a renewable portfolio standard of 36.7% as of September 2024, which the legislature said rooftop solar systems account for nearly half of. Kauai Island Utility Cooperative achieved an even higher renewable portfolio standard of 57.9%, with 23.2% coming from rooftop solar installations.
Hawaii has a commitment to achieve a 100% renewable portfolio standard by the end of 2045. Customer-sited distributed energy resources, such as rooftop solar and energy storage systems, are essential to reaching these goals, the legislature said.
Hawaii leads the country for residential solar-plus-storage systems, with 96% of all residential rooftop solar installations now including energy storage, the legislature said.
Installations accelerated in recent years, as 78% of the rooftop installations in Oahu, Hawaii Island and Maui Country included battery storage just five years ago.
“Notably,” the legislature said, “programs like Hawaiian Electric’s battery bonus program have demonstrated the potential of distributed energy resources to address critical capacity needs, enrolling forty megawatts of storage on Oahu and six megawatts on Maui to respond to energy adequacy and reliability emergencies.”
Hawaii’s solar-batteries market was partially buoyed by a program called Battery Bonus, which reached its enrollment cap in Oahu and closed in December 2023. Hawaiian Electric customers on Maui had 7.2 MW of capacity remaining as of February 2024.
However, Hawaiian Electric replaced its temporary Battery Bonus Program last year with a new program called Bring Your Own Device (BYOD), which was seen as far less lucrative program for customers.
Hawaii legislators introduced a bill last year that sought to undo some of the damages sparked by the new program, but it made relatively little progress.
On Dec. 31, the PUC initiated a proceeding to discuss reforming the program.
“Owners of DERs with battery systems place great value on the personal resilience afforded by their systems,” the PUC said, “and it appears that, in order to succeed, compensation provided for grid-services must be unambiguously and sufficiently greater than the benefits of self-consumption.”
Hawaii has the highest electricity rates in the country despite consuming the least amount of electricity, according to the U.S. Energy Information Administration. High prices are also often compounded by power instability. Frequent instances of extreme weather across Hawaii can cause blackouts and brownouts, whether as a direct result of storms and wildfires or as preventative measures to mitigate further infrastructural damage.
Most of the pushback on the bill was asking the legislators to give the PUC more time to complete the analysis before passing the legislation.
The legislation also received pushback from Life of the Land, a non-profit environment group based in Honolulu, which previously testified against an anti-rooftop solar bill. In its testimony, a representative said “It would be very nice if an independent power producer could both sell to the utility and sell to a third party.” However, under the bill, doing so would make them a utility, so they would have to register with the PUC, which is something no independent power producer has done, they said.
The bill otherwise received strong support.
“We really need this bill,” Rocky Mould, the executive director of the Hawaii Solar Energy Association said during testimony.
“We really need this to lower energy costs and lower energy burden for our island. We need this for grid stability.” He added, “We need this to maintain a healthy solar industry going forward with all the uncertainty there is that we’re facing right now.”
Hawaii leads the nation in non-residential distributed generation, ranking first per capita, according to the Solar Energy Industries Association. Additionally, 36% of homes in the Aloha State have solar, but the state’s residential solar is ranked 24th per capita. For comparison, in California, the number-one state per capita for residential solar, 24% of homes have solar.
The bill, which unanimously passed both the House and the Senate, was initiated through an executive order by Gov. Josh Green, so the governor’s veto seems unlikely. However, he has until June 24th to issue an intent to veto and then July 9 to veto the bill, or it will otherwise become a law.
Read about other solar-related bills state lawmakers are debating this legislative session here.
