Thursday, December 13, 2018
Hawai'i Free Press

Current Articles | Archives

Friday, October 21, 2016
Hawaii Proves Solar Power’s Dependence on Subsidies
By Selected News Articles @ 10:51 PM :: 2808 Views :: Energy, Tax Credits

Solar Power’s Dependence on Subsidies

by Institute for Energy Research, October 19, 2016

While solar advocates like to say that solar is cost competitive with traditional forms of energy, several states have found that not to be the case. In Hawaii and Nevada, interest in solar waned when these states modified their incentives for solar power, cutting back on their net metering programs and making rooftop solar owners pay for their use of the electric grid. In both cases, the program changes resulted in many fewer customers investing in solar power.


Hawaii has a goal of 100 percent renewable energy by 2045. Its high electricity prices and net metering program propelled the state to reach a higher penetration of rooftop solar than any other U.S. state. About 17 percent of Hawaiian Electric customers have rooftop solar.

But, in October 2015, the Public Utilities Commission in Hawaii replaced its net metering program, which provided solar owners with the retail rate for electricity sold back to the grid, with two options. One option, called the grid-supply program, credited customers with a fixed rate below the retail rate for excess solar power. The program credits customers at a fixed rate between $0.15 per kilowatt hour to $0.28 per kilowatt hour, depending on the island on which they are located.[i] The second option—a self-supply option with no grid-export capabilities–requires storage capacity for any excess power and has a minimum bill of $25 for residential customers and $50 for commercial customers.[ii]

Each Hawaiian island has a cap on the amount of solar capacity that can be eligible for sale back to the utility. The only island not yet reaching its interim cap is Oahu, though it is at 87 percent of its cap.

The reason that Hawaii had to change its solar subsidy program is that the solar generation can overload local circuits on the utility’s grid, causing the grid to malfunction.

After Hawaii’s lucrative net metering program ended last October, the solar industry in the state lost about 450 jobs. Total employment now is just above 600.


Nevada also made changes to its net metering program. But, unlike Hawaii, existing customers were originally not to be grandfathered under Nevada’s new solar program.

On December 22, 2015, the Nevada Public Utility Commission tripled the fixed charges solar customers would pay over the next four years, and reduced the credit solar customers receive for excess generation by three-quarters. The change was designed to make solar customers pay their fair share for use of the electricity grid. According to the commission’s marginal cost of service study, solar customers are subsidized by $16 million per year at the expense of other customers. [iii]

Under the new rates, Southern Nevada solar customers, who make up the majority of solar customers in the state, will have their fixed charge increase incrementally from $12.75 to $38.51 per month by 2020. Over the same period, the net-metering credit will decrease from 11 cents per kilowatt-hour to 2.6 cents per kilowatt-hour.

SolarCity calculated that the new rates could cost existing customers an additional $11,000 over the 20-year life of their systems. Another group estimated that rooftop solar contracts would not make economic sense as of 2017. Further, by 2020, almost all solar customers are expected to be paying more per month than if they had not gone solar. Even if a customer owns the system, exports little to the grid and is helped by time-of-use rates, the economics are worse because of the higher fixed charges.

Due to legal and regulatory battles, Nevada utility regulators restored retail-rate net metering for the Nevada’s 32,000 existing solar customers. The agreement allows all customers who applied for a residential solar system before December 31, 2015 to be grandfathered for 20 years under Nevada’s original net-metering tariff and sets a cutoff date of November 30, 2036.[iv]

Solar companies realized that without the original subsidies, rooftop solar economics would be unworkable. After the new rate took effect on January 1, 2016, the larger solar companies (SolarCity, Sunrun and Vivint) announced that they had to cease operations in the state and local installers reduced staff.


States are realizing that the net metering rules as originally established were hurting non-solar customers and the local utilities because the non-solar customers had to pay for the use of the electricity grid by rooftop solar owners. As a result, a number of states are evaluating changes to their net metering policies. Two states, Hawaii and Nevada, have instituted changes. But solar companies, such as SolarCity, have announced that these changes are uneconomic and have indicated that they can no longer operate in those states, reducing solar employment–by as much as 42 percent in Hawaii. Clearly, solar is not yet competitive with traditional generating technologies.

For a complete list of states that are making changes to their rooftop solar policies, see IER’s report The High Cost of Rooftop Solar Subsidies”[v].

[i] Utility Dive, Hawaii PUC ends net metering program, October 14, 2015,

[ii] Utility Dive, Hawaii solar sector on the ‘brink of collapse’ as employment dips 42%, October 7, 2016,

[iii] Green Tech Media, Does Nevada’s Controversial Net Metering Decision Set a Precedent for the Nation?, February 4, 2016,

[iv] Green Tech Media, Nevada Regulators Restore Net Metering for Existing Solar Customers, September 16, 2016,

[v] IER, The High Cost of Rooftop Solar Subsidies, October 2016,


TEXT "follow HawaiiFreePress" to 40404

Register to Vote


808 Silent Majority

808 State Update AM940


ACA Signups Hawaii


Affordable Hawaii Coalition


Alliance Defending Freedom

Aloha Conservative Alliance

Aloha Life Advocates

Aloha Pregnancy Care Center

American Council of Trustees and Alumni

American Mothers of Hawaii



Antonio Gramsci Reading List

A Place for Women in Waipio

Audit The Rail

Ballotpedia Hawaii

Better Hawaii 

Blaisdell Memorial Project

Broken Trust

CAFR Hawaii

Castaway Conservative

Children's Alliance Hawaii

Children's Rights Institute

Christian Homeschoolers of Hawaii

Citizens for Recall

Cliff Slater's Second Opinion

Coffee Break

Conservative Forum for Hawaii

CSIS Pacific Forum

DAR Hawaii

DVids Hawaii

E Hana Kakou Kelii Akina

E Māua Ola i Moku o Keawe

Farmers For Choice Hawaii


Fix Oahu!

Follow the Money Hawaii

Frank in Hawaii

Front Page Magazine

Frontline: The Fixers

Genetic Literacy Project

Get Off Your Butts!

God, Freedom, America

Grassroot Institute

Hawaii Aganst Assisted Suicide

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii Coalition Against Legalized Gambling

Hawaii ConCon Info

Hawaii Credit Union Watch

Hawaii Crime Victims' Rights

Hawaii Crop Improvement Association

Hawaii Debt Clock

Hawaii Defending Marriage

Hawaii Defense Foundation

Hawaii Families for Educational Choice

Hawaii Family Advocates

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii Firearm Community

Hawaii Fishermen's Alliance

Hawaii Future Project

Hawaii Gathering of Eagles

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii March for Life

Hawaii Meth Project

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Right to Life -- Big Island

Hawaii Right to Life -- Oahu

Hawaii Senate Informer

Hawaii Shield Law Coalition

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

Heritage Foundation

HI Coalition Against Legalized Gambling


Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Homeless Crisis

Honolulu Navy League

Honolulu Traffic

Horns of Jericho Blog

House Minority Blog

House Republican Caucus YouTube


Hump Day Report

Hunting, Farming and Fishing Assoc.

I Vote Hawaii

If Hawaii News

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

Iowa Meets Maui

Jackson v Abercrombie

Jihad Watch

Judgepedia Hawaii

July 4 in Hawaii

Kahle v New Hope

Kakaako Cares

Kau TEA Party

Kauai Co GOP

Keep Hawaii's Heroes


Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Malulani Foundation

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

Mauna Kea Recreational Users Group

Middle East Forum--The Legal Project

Mililani Conservatives for Change

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

Muslim Brotherhood in America

NAMI Hawaii


National Christian Foundation Hawaii

National Parents Org Hawaii

National Wind Watch

New Zeal

NFIB Hawaii News

No GMO Means No Aloha

Northwest Economic Policy Seminar

Not Dead Yet, Hawaii

Now What I Really Think

NRA-ILA Hawaii

Oahu Alternative Transport

ObamaCare Abortion Hawaii

OHA Lies

Ohana Policy Group

Pacific Aviation Museum

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Pritchett Cartoons 

Pro-GMO Hawaii


Rental by Owner Awareness Assn

Republican Party -- Hawaii State

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

Salvage The Rail

Save the Plastic Bag

School Choice in Hawaii

SIFE Remington

SIFE W. Oahu 

Sink the Jones Act

Smart About Marijuana--Hawaii

St Marianne Copenull

State Budget Solutions Hawaii

State Policy Network

Statehood for Guam

Tax Foundation of Hawaii

TEA Party Maui

TFB Micronesia

The Harriet Tubman Agenda

The Long War Journal

The Real Hanabusa

Time Out Honolulu

Truth About Trade & Technology - Hawaii

UCC Truths

Union Members Know Your Rights

US Tax Foundation Hawaii Info

Valor in the Pacific

VAREP Honolulu

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii