Hawaii NEM Successor Tariffs: Customer Grid Supply Plus and Smart Export

Hawaii utility customers who install rooftop solar today face a completely different compensation landscape than the early adopters who signed up before October 2015. The Public Utilities Commission closed the original 1:1 retail net energy metering program that year, citing strain on circuits where solar penetration had already exceeded 100% of daytime minimum load on hundreds of feeders.

In its place, the PUC and Hawaiian Electric (HECO) built a stack of successor tariffs: Customer Grid Supply, Customer Grid Supply Plus, Smart Export, and most recently the Battery Bonus rebate-plus-tariff hybrid. Kauai’s customer-owned utility, KIUC, runs its own parallel Schedule Q. Each program pays a different rate for exported kilowatt-hours, and each ties into the state’s binding 100% renewable portfolio standard by 2045.

This article walks through what relocating households actually receive per exported kilowatt-hour under each program, how the interconnection queue affects timing, and how the rate structure is likely to evolve as Hawaii pushes past its 70% RPS interim milestone. The numbers below come from HECO and KIUC tariff sheets and PUC dockets, not anecdotal averages.

The 2015 closure of retail net metering

Hawaii ran the most generous NEM program in the country between 2001 and October 2015. Residential customers received full retail credit — roughly 28 to 36 cents per kilowatt-hour depending on island and tier — for every solar kWh exported to the grid. By the time the program closed, more than 80,000 Hawaiian Electric customers had interconnected systems, and Oahu rooftops alone supplied around 17% of the island’s daytime energy.

The PUC closed retail NEM because circuit-level penetration had outrun the grid’s hosting capacity. On dozens of Oahu and Maui feeders, midday solar production exceeded the minimum daytime load, pushing reverse power flow back through distribution transformers never designed to operate that way. Voltage swings and frequency-ride-through concerns drove the Commission to require new tariffs and advanced inverter standards.

What grandfathered customers kept

Customers who interconnected before October 12, 2015 retained their 1:1 retail credit indefinitely, subject to the rules in their original contract. That grandfathered population still receives full retail rates for exports — a meaningful advantage given Honolulu residential rates that EIA data places near 41 cents per kWh in recent months, more than triple the national average. New owners buying a NEM-grandfathered home can typically inherit the contract if paperwork is filed before closing.

Customer Grid Supply Plus (CGS+)

Customer Grid Supply Plus replaced the short-lived original CGS in March 2018 and remains the workhorse export tariff for solar-only systems without batteries. Under CGS+, the customer continues to consume self-generated power at retail offset value, but exports earn a fixed export credit rate set by the Commission per island.

The current published CGS+ export credits hover between roughly 10.08 cents per kWh on Oahu and around 12.04 cents per kWh on Hawaii Island and Maui, well below the 28-to-41-cent retail rate. The asymmetry — consuming power at retail, exporting at wholesale — sharply changes the payback math relative to original NEM. Systems are sized closer to load rather than oversized for credits.

Advanced inverter requirements

Every CGS+ system must use a UL 1741 SA or SB compliant smart inverter that can ride through voltage and frequency disturbances, curtail output on command, and switch to volt-VAR or volt-watt mode. HECO can also remotely curtail exports during over-generation events. Installers typically configure inverters in volt-watt mode by default, which reduces output above 1.04 per-unit voltage.

Program caps and queues

CGS+ has soft megawatt caps per island that the PUC has lifted multiple times. As of the latest tariff sheets, Oahu carries the largest allocation, with Maui County and Hawaii Island holding smaller remaining headroom. When a cap fills, new applications either roll into Smart Export with batteries or wait for the next Commission expansion order.

Smart Export — paired with batteries

Smart Export targets customers who install solar with a battery system, typically 10 to 13 kWh of usable storage paired with a 6 to 8 kW PV array. The defining rule: the inverter must export only between 4 p.m. and 9 a.m. — when the grid actually needs the energy. Midday solar production must charge the battery rather than push to the wires.

Export credit rates under Smart Export run noticeably higher than CGS+ because the energy arrives during evening peak. Published rates have ranged from about 14.97 cents per kWh on Oahu to over 24 cents per kWh on Hawaii Island in recent tariff filings. The 4 p.m.-to-9 a.m. window aligns with HECO’s duck curve, where steep evening ramps strain firm generation.

How Smart Export billing works

The meter records imports and exports separately. During the export window, every battery-discharged kilowatt-hour earns the Smart Export rate. Outside that window, exports earn zero — so a system without a battery would lose nearly all its midday production. Self-consumption still offsets retail rates one-for-one, which is where most of the financial return originates.

Battery Bonus — the cash incentive layer

Battery Bonus launched in July 2022 on Oahu and expanded to Maui in 2023 as a bridge program tied to the September 2022 retirement of the AES Hawaii coal plant. The program pays a one-time capacity incentive — up to $850 per kilowatt of dispatchable battery capacity on Oahu — for customers who agree to discharge two hours daily into the 6 p.m.-to-8:30 p.m. window for ten years.

A 5 kW battery commitment yields around $4,250 cash on Oahu, plus an ongoing performance payment of roughly 5 cents per kWh discharged during the dispatch window. Battery Bonus stacks on top of Smart Export, so an Oahu household can receive the upfront rebate, the per-kWh dispatch payment, and the Smart Export export credit for non-Battery-Bonus exports.

Eligibility and equipment rules

Battery Bonus enrollment requires both new solar PV and qualifying storage of at least 5 kWh usable, integrated with HECO’s grid services platform. Customers cannot enroll an existing solar-only system without adding storage, and the program closes once HECO procures its targeted megawatts. Cycling fatigue on the battery accelerates warranty consumption — most LFP units accept 6,000-cycle warranties, so two cycles per day is manageable.

Export credit rates at a glance

The table below compares published export credit rates by program and island. Rates reset annually and the PUC occasionally orders mid-cycle adjustments, so the figures shown reflect recent tariff sheets rather than a guarantee for any future enrollment.

Households comparing islands for relocation should layer these export rates with broader cost differences. An island-by-island analysis of grocery prices across Hawaii documents how Hawaii Island and Maui run 8–12% higher than Oahu on staples, partially offsetting their higher solar export credits. The full relocation math always combines energy, food, housing, and transport.

HECO interconnection queue and timelines

An interconnection application sits in HECO’s queue until engineers run a fast-track screening, then a supplemental review if the system fails any of the fast-track tests. Fast-track approval typically completes inside 30 days when the circuit has hosting capacity headroom. Supplemental review can add 60 to 120 days, and a full impact study — required on saturated feeders — can stretch past 12 months.

HECO publishes a public locational value map that shows which circuits have headroom in red, yellow, or green. Civil Beat reporting has documented frustration among installers facing red-feeder delays, particularly in dense Oahu neighborhoods where solar penetration already exceeds 200% of daytime minimum load. Households relocating to such circuits should check feeder status before signing a solar contract.

Permission to operate

After interconnection approval, the customer’s installer schedules a final inspection with the county building department. Honolulu permits route through DPP, while Hawaii County handles Big Island inspections. Once inspection passes, HECO issues Permission to Operate (PTO), which legally permits export to the grid. PTO timelines from contract signing to first exported kilowatt-hour commonly run 90 to 180 days.

Common queue rejection reasons

• Inverter make or model not on HECO’s approved list.
• Battery enclosure missing UL 9540 certification for indoor installation.
• Single-line diagram missing required AC and DC disconnect labels.
• Roof structural letter not stamped by a Hawaii-licensed engineer.
• System size exceeds 75% of historical 12-month consumption without justification.
• Feeder hosting capacity flagged red, requiring a full impact study.

KIUC Schedule Q on Kauai

Kauai is served by Kauai Island Utility Cooperative — a member-owned coop, not a HECO subsidiary. KIUC runs its own export tariff called Schedule Q, governed by the coop’s board rather than the PUC. The structure differs meaningfully from Smart Export and CGS+, and Kauai homeowners researching the cost of living on Kauai often look closely at how Schedule Q interacts with the coop’s already-low generation mix.

KIUC achieved roughly 60% renewable generation in recent years, the highest of any Hawaiian utility, by aggressively building utility-scale solar-plus-storage. Because the coop already has abundant midday solar, Schedule Q pays modest export credits — historically near 11 cents per kWh — and explicitly does not pay retail-rate credits. New residential applicants typically self-consume rather than export.

Schedule Q vs HECO Smart Export

Why Kauai’s economics differ

Because KIUC built so much utility-scale solar early, the marginal value of additional residential exports is low — the coop sometimes curtails its own assets at midday. Schedule Q reflects that reality. Households on Kauai considering solar usually size for self-consumption with a battery to shift evening loads, rather than chasing export credits. The math favors offsetting retail purchases over selling back.

How the 100% RPS by 2045 mandate shapes rates

Hawaii’s Act 97 of 2015 requires 100% of electricity sold to come from renewable sources by December 31, 2045, with interim milestones of 30% by 2020, 40% by 2030, 70% by 2040, and 100% by 2045. As of the most recent reporting, statewide RPS sat near 32% and HECO trailed its goal, while KIUC ran well ahead at roughly 60%.

The mandate shapes export tariffs because it forces the utilities to value midday solar differently as penetration rises. Once daytime generation routinely exceeds load, additional midday exports have negative marginal value — they must be curtailed or stored. This is precisely why Smart Export pays evening exports several cents more than the now-saturated midday window pays under CGS+.

What relocating households should expect

Over the next decade, export credit rates will likely continue to migrate toward time-and-location-differentiated values. The PUC has signaled interest in performance-based regulation, where HECO earns more for hitting renewable and reliability targets. Tariff schedules can change, but the trend is clear: storage-paired systems with controllable dispatch will earn meaningfully more than passive solar-only exports.

Sizing a system under successor tariffs

The shift from retail credit to wholesale-style export rates means oversizing a PV array no longer makes sense. Under original NEM, doubling the array doubled the credit. Under CGS+ or Smart Export, each exported kWh earns roughly a third of retail — so sizing closer to actual load (or to battery throughput) optimizes payback.

The role of the federal investment tax credit

The federal Residential Clean Energy Credit currently covers 30% of total system cost — including battery storage of 3 kWh or more — through 2032, then steps down. On a $35,000 turnkey solar-plus-battery installation, that’s a $10,500 reduction in federal income tax liability, claimable on Form 5695. Hawaii also offers a state Renewable Energy Technologies Income Tax Credit administered through the Department of Taxation.

The Hawaii state RETITC

The state credit equals 35% of system cost capped at $5,000 per 5-kW residential system. Stacked with the federal 30%, a typical 6 kW solar plus 10 kWh battery installation receives roughly $15,500 in combined tax credits on a $35,000 contract — about a 44% effective reduction. Carry-forward rules let unused credit roll to future tax years if liability is too low to absorb the full amount immediately.

Practical interconnection tips for new arrivals

Relocating households often underestimate how much paperwork sits between a solar contract and the first exported kWh. Below are the practical levers that move timelines and improve approval odds.

1. Pull a 12-month usage history from the utility before sizing — HECO and KIUC both provide green-button data downloads.
2. Check feeder hosting capacity on HECO’s locational value map before signing.
3. Confirm the installer is using inverters on HECO’s current approved list, not last year’s.
4. Plan for at least 90 days between contract signing and PTO on a clean fast-track case.
5. Budget for permit and inspection fees of $400–$900 depending on county.
6. Document any roof reinforcement separately — wind-uplift calculations are essential on coastal homes.

Coastal homes carry additional structural considerations. Households comparing hurricane shutters or impact windows often time roof work, solar, and storm hardening together to avoid duplicating roof penetrations. The same engineering letter often serves multiple permits.

Banking and financing solar in Hawaii

Many local solar contracts now run through Hawaii-headquartered credit unions rather than mainland lenders, which often refuse to lend on island construction. Hawaii credit unions commonly offer solar-specific loans at 6.5% to 8.5% APR over 10 to 20 years, with no UCC-1 filed against the property — important if the home is later refinanced.

Power purchase agreements (PPAs) and leases still exist but have lost favor since CGS+ launched. Without retail-rate export credits, the third-party financier earns less from the system, so PPA pricing has tightened. Most current Hawaii rooftop solar installs are cash or loan-financed, with the homeowner capturing both the tax credits and the export revenue directly.

Grid services: HECO’s virtual power plant pathway

Beyond the energy paid for under Smart Export and Battery Bonus, HECO operates a grid services tariff that compensates customers for capacity, frequency response, and demand reduction. Aggregators — third-party companies that pool thousands of residential batteries into a single dispatchable resource — bid into HECO’s procurement events and pass payments to participating households after taking their own margin.

Participation requires a battery enabled for remote dispatch and an enrollment agreement with an approved aggregator. Monthly capacity payments commonly range from $30 to $75 depending on battery size and program tier. Performance payments arrive when the aggregator actually calls the battery, which typically happens 60 to 100 times per year. Annual revenue layered on top of Smart Export can add $400–$900.

Aggregator selection matters

Aggregator contracts vary in dispatch frequency, depth-of-discharge limits, and battery warranty interaction. Some manufacturers void cycle warranties if a third-party aggregator commands the battery; others have explicit grid-services-permitted clauses. Reading the aggregator agreement alongside the battery warranty before signing is essential — recovery is difficult after the fact if a claim is later denied for dispatch-related wear.

Where the tariff structure is headed

Three forces are reshaping the successor tariff stack in real time: continued declines in battery costs, the PUC’s grid services tariff that pays customers for capacity rather than just energy, and the eventual sunset of Battery Bonus when its megawatt cap fills. Hawaii household solar economics in 2026 already differ materially from 2022, and another shift is likely by 2028.

The PUC’s grid services framework treats batteries as virtual power plants. Aggregators bid pooled storage into HECO’s ancillary services markets, paying participants a recurring monthly fee plus performance-based payments per dispatch event. Early enrolled customers report monthly cheques in the $30–$75 range on top of Smart Export and Battery Bonus, depending on battery size and call frequency.

What journalists are watching

Coverage from the Honolulu Star-Advertiser and Hawaii News Now has tracked PUC dockets on performance-based regulation, AES Hawaii retirement impacts, and the slower-than-planned ramp of utility-scale battery procurement. These dockets directly affect what residential customers receive per exported kWh in coming years.

Comparing total return across programs

For a 6 kW PV plus 10 kWh battery system in central Oahu, typical first-year financial flows look like the table below. Numbers assume 9,200 kWh annual production, 65% self-consumption, and Battery Bonus enrollment.

Against a typical installed cost of $32,000–$38,000 before any credits, the household reaches simple payback inside year 7 and accrues $15,000+ in net post-payback value through year 10. Real-world outcomes vary with consumption pattern, shading, and inverter availability, but the directional math holds across most Oahu and Maui installations.

Maintenance, monitoring, and weather considerations

Hawaii’s saltwater air shortens equipment life on the windward side of every island. Aluminum racking corrodes faster than inland mainland installations, and inverter cooling fans can fail two to three years sooner. Most reputable installers offer 25-year panel warranties, 12-year inverter warranties, and 10-year workmanship coverage. Selecting marine-grade hardware for coastal homes adds roughly $400–$900 to project cost but extends serviceable life by years.

Households comparing weather windows for major exterior work often consult seasonal references for each Hawaiian island to schedule installations during the drier months between May and October. Pulling permits during the dry season also reduces the chance of inspector delays from weather-related backlog.

Tropical storm seasons bring different exposure than mainland weather events. Households preparing a tropical storm supply kit should treat the battery as part of resilience planning — most modern systems can island and supply critical loads during outages, but not all default configurations enable that mode. Configuration during commissioning matters as much as equipment selection.

Battery degradation and warranty math

Lithium iron phosphate (LFP) batteries — the standard chemistry for new Hawaii installations — typically warranty 70% of nameplate capacity after 10 years or 6,000 cycles, whichever comes first. Battery Bonus participants run two cycles daily, which means roughly 3,650 cycles by year 5 and 7,300 by year 10. Some warranties exclude grid-services cycling, so check the fine print before enrolling.

Selling a Hawaii home with solar

Resale of a Hawaii home with rooftop solar follows the original tariff. Grandfathered NEM contracts can transfer to a new owner if paperwork is filed before closing, preserving a substantial economic asset. CGS+ and Smart Export contracts also transfer routinely. Battery Bonus participation transfers only if the new owner agrees to assume the ten-year dispatch commitment in writing.

Real-estate agents in Honolulu and Maui increasingly list “NEM-grandfathered solar” as a separate disclosure item. Local MLS analyses have documented price premiums of $10,000 to $25,000 for homes with grandfathered NEM versus equivalent non-solar homes, with smaller premiums for CGS+ systems. Treating tariff status as part of the carrying-cost picture helps buyers compare apples to apples across listings.

Frequently asked questions

Can a household still join the original NEM program?

No. The Public Utilities Commission closed enrollment to original retail-rate net energy metering on October 12, 2015. Only customers grandfathered before that date — or buyers inheriting an existing NEM contract through a home purchase — can still receive 1:1 retail credit. New applicants must choose between Customer Grid Supply Plus, Smart Export, or Battery Bonus.

How does Smart Export differ from CGS+ on the bill?

CGS+ pays a flat 24-hour export rate but earns less per kWh because midday exports are oversupplied. Smart Export pays a higher rate but only between 4 p.m. and 9 a.m., requiring a battery to time-shift midday production into evening peak. Households without storage cannot meaningfully participate in Smart Export and should stay on CGS+ instead.

Is Battery Bonus still open to new applicants?

Battery Bonus has a capped megawatt allocation that fills as enrollments complete. As of recent program updates, Oahu allocation was running low and Maui still had capacity. Once full, HECO closes intake until the PUC orders an expansion or successor incentive. Prospective customers should confirm capacity status with their installer at contract signing, not application submission.

What happens to credits at the end of a billing year?

Under CGS+ and Smart Export, monthly export credits offset that month’s electricity charges first. Any remaining surplus rolls forward to subsequent months at the same dollar value. At the annual true-up date, unused credits typically zero out — they are not refunded as cash. Sizing systems to consume rather than export year-round avoids leaving credits on the table.

How does KIUC’s Schedule Q compare for Kauai homeowners?

Schedule Q pays Kauai households roughly 11 cents per kWh for exports versus retail of about 45 cents. Because KIUC already operates near 60% renewable generation with abundant midday solar, the coop sees little marginal value in additional residential exports. Most new Kauai systems are sized for self-consumption with storage rather than export-heavy operation.

What does the 100% RPS mandate mean for export rates?

Hawaii’s binding 100% renewable portfolio standard by 2045 forces the utilities to value time and location differently as solar penetration rises. Midday exports lose marginal value once daytime generation exceeds load, while evening and overnight discharge become more valuable. Expect export tariffs to migrate toward more granular time-of-use and locational pricing through the late 2020s.

How long does HECO interconnection actually take?

Clean fast-track applications close in roughly 30 days. Supplemental review adds 60 to 120 days. Full impact studies on saturated feeders can extend the queue past 12 months. Total elapsed time from contract signing to Permission to Operate commonly runs 90 to 180 days, with the actual installation date often being one of the smaller pieces of the schedule.

Should new arrivals install before or after closing on a home?

Installing after closing is almost universally simpler. Permits, interconnection applications, and tax credits must reference the legal property owner, and lenders sometimes flag mid-purchase home modifications during underwriting. Most relocating households wait until they hold title, then begin the 90-to-180-day process. Cash buyers can occasionally start sooner with seller cooperation, but the timeline savings rarely justify the coordination overhead.