Dive Brief:

• The accelerating pace of rooftop applications for Hawaiian Electric's grid-supply tariff means the utility may fill its quota for the program in some areas as soon as June 2016, a coalition of solar companies warned in a filing with regulators last week.
• Any remaining capacity on all islands is likely to be filled by the beginning of August, the group said. The filing called on regulators to raise caps on the program, which sit at 25 MW for Hawaiian Electric's Oahu territory and 5 MW each for its subsidiaries on Maui and Hawaii Island, respectively. 
• If the caps are reached, Hawaiian Electric said the customer self-supply tariff should serve as "the primary program for customers until new options could be developed through the regulatory process." Any increase in the cap should be "should be limited in scope," a spokesperson said.

Dive Insight:

When Hawaii regulators terminated retail rate net metering in Hawaii last October, they replaced it with two new tariffs — Customer Grid Supply (CGS) and Customer Self Supply (CSS).

The CGS program set solar remuneration rates at $0.151/kWh for Oahu, $0.154/kWh for Hawaii, and $0.172/kWh for Maui, roughly the value of recent power purchase agreements for utility-scale solar in the state. The CCS program, conversely, allows solar customers to earn credits at the retail rate of electricity, but is designed to prevent them from exporting the power they generate to the grid.

Since they were implemented last fall, the CGS option has proved much more popular.

As of May 17, more than 2000 applications for the grid supply program since the beginning of Dec. 2015, according to a report from Hawaii Energy Law Services, which analyzes utility solar filings. In the same timeframe, fewer than 20 CSS applications have been filed, and only one has been approved, according to the solar coalition filing.

The rate of installation is likely to increase in the coming months, the solar coalition warned, which could put pressure on the CGS quota for Maui as soon as June. 

"Improved application processing and increased customer familiarity with the CGS option have led to customers applying at a quicker pace in recent weeks than in Q1 2016," the filing warned. "[F]urther acceleration of applications can reasonably be projected based on these factors, which would move forward the timeframe for reaching the CGS tariff cap by several months."

Even if applications do not accelerate like the solar companies expect, the current rate of installations would still pose trouble for the cap within six months, attorney Erik Kvam wrote in the Hawaii Energy Law Services report.

"At an average rate of 82 CGS applications per week [the current rate] ... it might be expected that 25 MW of the 25 MW CGS quota for Oahu, 5 MW of the 5 MW CGS quota for Maui, and 4 MW of the 5 MW CGS quota for island of Hawaii, would be filled by the end of November 2016," he wrote.

Given the solar growth projections, the installers petitioned regulators to raise the caps on the CGS program. As Hawaii regulators move toward a fuller examination of the value of distributed resources, "the CGS tariff will likely continue to provide the most feasible interim option for customers to install onsite DER."

"By exercising the authority it reserved to adjust the interim CGS tariff cap, the Commission will maintain this interim option for customers while other options can become available," they wrote.

From the utility's perspective, there is less reason for alarm.

"It may not be necessary to make any adjustments to the Customer Grid Supply program," HECO spokesperson Darren Pai wrote in an email.

"There are about 13,000 applications for rooftop PV that we have approved that have not been installed yet," he said, accounting for about 102 MW of capacity — more than three times the caps for all the utility service areas combined. 

"If even a small percentage of those customers are no longer interested in installing a system, it could free up capacity for customers who are," Pai wrote. If the caps are hit, the CSS option should be the primary program for solar customers until regulators devise a new incentive program.

"We believe any increase should be limited in scope and consistent with the PUC’s guidance on this issue and State law," Pai wrote. "We recommend that projects under any increased Grid Supply program capacity be right-sized help maintain safe, reliable service and allow for maximum customer participation."