The state has taken a critical first major step toward driving energy production with renewable sources, by adopting rules that give companies an incentive to produce “green” electricity.

That incentive takes the form of feed-in tariffs, a price guarantee for the renewable energy that the producers “feed” into the utility’s power grid.
Primary among the blanks to be filled in: The actual rates to be guaranteed have not yet been set. But last week’s decision by the Public Utilities Commission to enable the mechanism of feed-in tariffs sends a signal to producers that Hawai'i wants to be a serious player in the promotion of renewable energy.
It’s important because the tariffs also standardize the process of contracting with the state’s utility, at least with the smaller energy plants — those adding up to 5 megawatts to the electrical distribution system. And knowing that the rates will be firm, no matter where the electricity is fed into the system, is a powerful lure for producers who need that kind of assurance.
Now the Hawaiian Electric companies that own the primary power grids throughout the Islands must work with the PUC to flesh out the final rates, ensuring that they minimize the ultimate impact on the consumer.
What’s encouraging about the commission decision is that it strikes a rational balance between advancing the state’s energy goals and limiting the infrastructure costs to be passed on to ratepayers.
The PUC chose a prudent middle track, both in terms of the size of projects to qualify for feed-in tariff rates and the type of technology to be supported. The commission settled on four technologies, applying the rationale that these have an extensive track record in producing power that can be added to an electrical grid. These are: photovoltaic, concentrated solar power, onshore wind power and in-line hydropower projects.
Further, the 5 megawatt limit seems a happy medium. Larger projects can require higher costs for consumers and may push the utility to accommodate renewables on a grid designed for fossil fuel sources before it’s ready, threatening the system’s stability. HECO should press ahead with plans to strengthen its grid in key areas where renewables are expected to materialize first — in 'Ewa, where photovoltaics already are emerging as a factor in development.
As technology improves, the cost of producing renewable energy should come down. So a policy to gradually increase the state’s use of renewables ought to benefit rate payers in the long term, as oil prices resume their upward trajectory. But in these bleak economic times when oil prices are suppressed, it’s smart to take an incremental approach.
Even with the sensible constraints aimed at affordability, Hawai'i is in the vanguard of states moving affirmatively toward green-energy goals. Given our unhealthy reliance on imported fossil fuels, a less aggressive policy will never do.