Time of Use can be defined as a varying retail rate a utility charges customers and based on time of consumption, on a daily or monthly schedule. If Time of Use in Hawaii becomes a real thing, it’s going to affect a lot of people, and not in a great way.
This is typically at times of high consumption called Peak Hours, which are usually in the morning and evening. There can be multiple prices per day, and prices or times can vary seasonally.
Here’s what a rate schedule for California looks like for Summer & Winter:
Why is This Important?
Peak Hours are when most people use most of the power they use in a day. So if power gets more expensive their bill will most certainly go up. Do you use power in the mornings & evenings? We know we do.
Here’s how most people use their power and a look at when solar power is generated by homes:
Currently the price of electricity is about 25.5¢/kWh, and has historically risen 5% per year over the last 15 years. Hawaii also has the most expensive electric utility rates in the country.
Is Time of Use in Hawaii Coming?
The utility has already worked with the Public Utilities Commission to create a voluntary program where residents can opt-in to be charged less in the daytime but pay more in the evening. It benefits some, who use most of their power during the day and less at night.
Proposed Time of Use in Hawaii rates and times are as high as 38¢/kWh (49% increase) for the evening peak, a daytime rate of 13.4¢/kWh (47% decrease), and an overnight rate of 16¢/kWh (37% decrease).
So Why is This Happening?
The reason for such an increase is due to the fluctuating cost of oil and how the plants actually have to generate that power needed.
A lot of power is needed in a short time to cover peak loads and that kind of power generation is expensive. Sort of like flooring the gas pedal on a car as opposed to steady but normal acceleration to reach a certain speed, just on a larger scale – and a lot a fuel is needed to do so.
One reason for this is the power generated by solar in the daytime going back onto the grid for others to use. The utility doesn’t have to generate as much power in the daytime with all the solar out there because of the extra power and all the people who have solar don’t need power in the daytime anymore. Double whammy.
This is great for the environment because most of our power here in Hawaii is generated from burning oil.
This is great for solar system owners because their power bills are a low flat rate for the utility interconnection fee.
Is The Future Bright?
Much is uncertain at this point. The hours could change, there could only be 2 peaks, the rates could change as well. One thing is clear, the utility is pursuing this avenue and it will likely lead to widespread bill amount increases.
There is one way to protect yourself though: Go Solar. And if you already have solar great.
If you have an approved NEM or DER agreement from the utility, don’t let it go to waste! You can’t afford NOT to get solar, especially if you have a NEM.
Check out this recent blog post explaining NEMs & DERs.
Even a small battery in your solar system would definitely offset Time of Use in Hawaii increases in utility rates. Your home would be using power from there first, and would only pull from the grid when the battery’s charge was depleted.
Ideally, you’d want to power your home from 4:00pm till 12:00am (the highest rate time) off solar or a battery, and pull from the grid when it is cheaper. Your home constantly uses power, even when you’re asleep, but at least you won’t be getting charged more even when you’re not actively using it.
You’ll also have power in an outage, and be able to have power everyday during any repairs needed during extended grid failure (like after a hurricane). Here’s a bunch more advantages to having a home battery here.
Interested in going solar?
Contact us today for a free energy analysis!