Maui Electric Company (MECO) announced this week it will increase the Net Energy Metering (NEM) system cap from three percent to four percent of system peak demand, paving the way for more households and businesses that own or lease an eligible renewable energy generator to take advantage of the benefits of connecting their systems to the utility grid.

Net energy metering is playing a crucial in the expansion of renewable energy across the U.S. In Hawaii it is key to our clean energy future and reducing our dependency on oil imports. Whether you are a residential or commercial customer you can get more value from the electricity you generate with your solar system by offsetting the purchase of electricity from your utility against excess electricity produced by your solar system at the retail rate.

As part of the NEM program, you use the electricity generated by your system to supply your own needs and purchase any additional power you need at the regular retail rate. At certain times, your system may generate excess power that it exports into the utility grid. Without net metering, if you had a power purchase agreement from your electric utility, you would be compensated for that power only at the lower wholesale rate.

When the sun shines and your solar panels are generating more energy than you’re using, you ‘deposit’ energy in the power grid. At night, you withdraw—and the extra energy you generated during the day is ‘rolled over’ into your account at no cost. At the end of the month, if you deposited more electricity than you used, you’ll receive a credit from the electric company. If you used more than you deposited, you’ll receive a bill.

Here is the formula:

Kilowatt-hours from utility
– Kilowatt-hours self-generated and fed to the grid
= Net kilowatt-hours

Under Hawaii state law, the cap on the total power producing capacity of generators signed up to take advantage of net energy metering is set at three percent of each electric utility’s system peak demand, and the actual number of customers allowed to sign up before this cap is reached depends on the combined size of the individual renewable energy systems. On Oahu, 40 percent of the cap is reserved for systems of 10 kW or smaller; on Maui and Hawaii Island, 40 percent of the cap is reserved for smaller systems.

MECO’s decision to increase the NEM cap follows a December 26, 2008 order issued by the Public Utilities Commission (PUC), which calls for MECO to notify the commission when applications on the MECO system exceed 75 percent of the 40 percent of the current three percent cap on system peak demand allocated to systems less than or equal to 10 kW. Pursuant to the PUC order, MECO must move to increase the NEM system cap from three percent to four percent of system peak demand in order to accommodate the continuation of NEM growth in Maui.

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