This new program targets existing solar customers and incentives them to install a new battery+PV and schedule it to discharge daily over a 2-hour period to help balance the electrical grid as the island switches from older fossil fuel power sources. Incentives include an upfront payment, while also allowing existing solar customers to install up to 5 kW of more solar PV, and take advantage of the extended Tax Credits.
To encourage program participation, the program is based on an upfront incentive payment from Hawaiian Electric to the customer who purchases a battery+ PV and enroll their system into the program for a ten-year commitment, the first two (2) years of which will be dedicated to 2-hour “hard scheduled” dispatch during high electrical usage times in the early evening. This will most likely be somewhere between the 5pm to 9pm timeframe when most people come home from work and start using energy for cooking, air conditioning, TV, electric car charging, etc.
This scheduled dispatch will be required through December 31, 2023, for a one two-hour period each day, scheduled at such time that Hawaiian Electric will designate.Participating systems will be programed to dispatch battery-supplied energy to either serve onsite load and/or export any excess energy to the grid over the 2-hour period. Customers must commit to dispatch a certain power level during the two-hour period, which will determine their upfront incentive amount.
The battery systems will also be programed to automatically prioritize battery charging from onsite solar PV during peak production times of the day in order to most reliably serve the 2-hour battery discharge commitment as scheduled by Hawaiian Electric. Energy exported to the grid from the battery storage discharge during a scheduled event will be compensated based on the terms of the participating customer's underlying tariff program (e.g., retail credits under NEM).
Since Customers with existing NEM systems will continue to receive full retail credits for export under this program, it is our opinion that existing NEM customers, by far, get the most benefits out of this program while also helping Hawaii transition to a 100% renewable future. We don’t know if there is ever going to be a better opportunity like this again.
An existing system under the NEM program works by offsetting daytime energy usage with solar electricity while also allowing excess solar production to be exported back to the grid as full retail credits toward the electric bill. See Figure 1.
Under this new program, existing NEM systems will see very little negative effect on their existing electric bill exporting excess energy back to the grid during the two-hour dispatch period since they will be receiving retail rate compensation either way. They are basically just “moving” their export from mid-day to the scheduled hours of evening electrical system peak usage. See Figure 2.
It is important to note that existing NEM customers are now able to add up to 5,000 more watts (5kW) of new solar PV generation under this program without affecting their existing agreement. This new generation can cover more of your residual electric bill if you happened to require more power than your existing PV system.
Oh by the way…by adding new solar panels and a battery under this program, the combined equipment meets eligibility requirements for up to the full 26% Federal and 35% Hawaii State tax credit incentives (incentive caps may apply to State tax incentive).
*As always, please consult with your tax advisor to determine how available tax incentives apply in your specific situation.