Redesigning Rates to Make Hay When the (Hawaii) Sun Shines
Vol. 18 – Watt in the Grid?

Vol. 18 – Watt in the Grid?

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Just before this year’s Hawaii Energy Conference kicked off, the Hawaii Public Utilities Commission quietly shut down the state’s Time-of-Use (TOU) proceeding. Their reasoning? The current design didn’t move the needle—customers didn’t shift usage enough, and few felt like they were saving money. Fair points. Hawaii’s in a unique spot: nearly 50% of single-family homes now have rooftop solar, and many are still on full-retail Net Energy Metering (NEM) agreements. So, if people are already getting credited handsomely for sending power to the grid at noon, why should they care about a cheaper kilowatt-hour then? But just because the first version didn’t work doesn’t mean TOU can’t. It just means we need a smarter, better-tuned approach.
In South Australia, solar saturation is off the charts. About 40% of households have rooftop PV, and their grid regularly dips into net-negative demand during sunny midday hours (OpenNEM live data). To soak up that extra solar, SA Power Networks (the principal electricity distributor in South Australia) created the “Solar Sponge”—a TOU rate that slashes electricity prices between 10 a.m. and 3 p.m. It gives people a real reason to run dishwashers, charge EVs, and heat water during solar-rich hours. Rather than offering full-retail NEM, customers instead receive feed-in tariffs that are significantly lower than retail rates—so they’re incentivized to self-consume their solar rather than export it. TOU gives them a meaningful price signal to align usage with grid needs. And it works. It’s like telling your kids, “You can watch your favorite show now, or later with ads”—they tend to shift pretty quickly.
But even in a full-retail NEM world like Hawaii’s, TOU isn’t a lost cause. For starters, half the population doesn’t have solar, and TOU could still shape how those customers use energy. Then there are solar-plus-storage households, which can arbitrage TOU—charging batteries when rates are low and discharging during peak times. Even with full-retail NEM, TOU gives these customers another tool to manage their energy and potentially reduce grid strain. Plus, smart devices like EV chargers, water heaters, and thermostats respond to TOU signals regardless of NEM.
Interestingly, Hawaii stopped offering NEM to new applicants back in October 2015, and now new solar customers are placed on the Smart Renewable Energy Export program, which offers time-varying export compensation rates. This program allows customers to receive credits for electricity sent to the grid, with rates varying by time of day and island. It’s a step towards more dynamic pricing that reflects the actual value of solar energy to the grid.
TOU can be a transitional strategy, helping people get used to dynamic pricing before broader reforms arrive. That’s where companies like GridX come in. We help utilities and regulators model how different rate structures impact different types of customers—before anything rolls out. Want to simulate what happens if a “solar sponge” window is applied on Maui during peak solar hours? We can do that. Want to test equity outcomes across renters and battery owners? That’s our bread and butter.
TOU isn’t dead—it just needs an update. Like getting your kid to switch from juice boxes to water: the first pitch might flop, but with the right timing, framing, and a better cup, it clicks. In the same way, Hawaii doesn’t need to give up on TOU. It needs to reimagine it for the solar-saturated, tech-rich, dynamic grid it’s become. And if we do it right, TOU can still help balance the grid, reduce fossil fuel use, and empower customers—even if NEM sticks around a little while longer.