Important Updates on Hawaii’s Distributed Energy Resources (DER) programs

Posted on Feb 5, 2024 in Hot Topics, Main

In the evolving landscape of energy programs, the State Division of Consumer Advocacy is your ally in navigating the changes coming to your doorstep. Our commitment is to inform, represent and protect you, the ratepayers, ensuring you have the knowledge needed to make informed decisions.  

We recognize that the world of solar power and energy programs can be complex but fear not – we’re here to simplify the jargon. Let’s begin with a quick guide to some terms you might encounter.  

Acronyms/ Definitions You Need to Know:  

DER: Distributed Energy Resource – These are small-scale power generation or storage systems, like solar panels or home batteries, often connected to the electricity grid. 

TOU Rates: Time of Use Rates. This means the cost of electricity varies depending on the time of the day.  

BYOD Tariff: Bring Your Own Device Tariff. This program lets you get compensated for contributing energy back to the grid using your own energy devices. 

LMI Adder: Low- and Moderate – Income Adder. An extra incentive to make it easier for those with lower incomes to join solar programs.  

Grid: The network of power lines and substations that deliver electricity from the power plant to your home.  

Incentive: A benefit or reward, often a bill credit or financial compensation to encourage specific actions, like using solar energy.  

Peak Hours: The time of day when electricity demand is highest, usual in the evening when people are using appliance and lights.  

Load Shaping: Adjusting energy usage patterns to better match the needs of the power grid.  

As we dive into the details of these programs, let this guide be your companion. We are here to ensure every term is as clear as the Hawaiian skies 

Introducing Shift and Save: A Time-of-Use Rate Pilot Program  

Starting February 1st, Hawaiian Electric launched the Shift and Save Pilot program on Oahu and Hawaii island. This program aims to study how customers respond to Time-of-Use (TOU) rates, encouraging change in energy usage behavior, allowing participants to access electricity at a lower rate during a specific time period. The pilot will collect data and customer feedback that will be critical for the commission to determine how and whether this program will ultimately apply to all customers in the future. The pilot includes 16,000 randomly selected participants will test the following rates:  



Evening Peak (5pm-9pm)  Overnight  


Oahu  17 cents per kilowatt-hour  52 cents per kilowatt-hour  35 cents per kilowatt-hour 
Hawaii Island  21 cents per kilowatt-hour  62 cents per kilowatt-hour  41 cents per kilowatt-hour 


Bill Protection: For the first six months of the pilot, residential bills will be capped at no more than a $10 increase compared to the existing rate for the same month, ensuring a safeguard against unexpected impacts. For participating commercial customers, bill increases will be capped at no more than a 4% increase. 

Participation: Participation in the Shift and Save program is voluntary. Customers selected for the pilot will have receive notifications via postal mail and/or email no later than December 5,2023. If not selected, you can still choose to participate and you can opt out at any time, even after the program starts. In September, the Public Utilities Commission ordered that the pilot begin on Feb. 1, 2024, instead of Oct. 1, 2023, and that commencement of the study on Maui would be temporarily suspended.  However, eligible Maui, Lanai and Molokai customers may voluntarily enroll in the TOU rates. (  

 Following this pilot is the introduction of the new DER Tariff programs beginning March 1st, 2024.  Here’s your comprehensive guide to navigate these changes.  


Smart DER Tariff:  

Smart DER Tariff Overview:  

The Smart DER Tariff establishes a program framework allowing customers to connect Distributed Energy Resources (DERs) to Hawaiian Electric’s grid. Designed as the new standard, new DER customers are required to enroll in this program, while existing CGS, CGS+, and Smart Export customers are REQUIRED to switch to the Smart DER Export program seven (7) years after your current contract start date.  However, can switch earlier if desired. Options include exporting energy to the grid through the Export Rider or utilizing DERs without exporting energy via the Non-Export Rider. Notably, customers enrolled in the smart DER Tariff under the Export Rider are afforded the additional opportunity to participate in the BYOD program, opening avenues for compensation by contributing services to the grid.  

Export vs. Non-Export:  

The key differences between Export and Non-Export Riders are primarily related to whether the system can provide energy to the grid and receive a credit for export. Here’s a breakdown:  

Receive credit for energy exported. Credit rates vary based on time of day.  Energy export is not allowed. No credit will be provided.  
Not required to enroll in Time of Use rates.  Not required to enroll in Time of Use rates. 

In essence, the choice between Export and Non-Export riders provides consumers with options based on their preferences, whether its actively supporting the grid and receiving credits for exports or using solar energy for personal consumption without exporting.  

Proposed Smart DER Tariff Export Rider Rates ($/kWh) 

Island  Overnight  




Evening Peak  


Oahu  $0.189  $0.135  $0.329 
Hawaii Island  $0.148  $0.106  $0.231 
Maui  $0.131  $0.066  $0.182 
Lanai  $0.259  $0.267  $0.408 
Molokai  $0.174  $0.179  $0.272 

Bring Your Own Device (BYOD) Tariff 

BYOD Tariff Overview: 

The BYOD Tariff is designed to establish an advanced DER program that compensates customers for providing grid services beyond their underlying DER tariff terms. Designed to be a long-term initiative with provisions allowing regular updates to the credit and compensation rates to reflect evolving grid needs. The BYOD Tariff is available to all DER customers regardless of underlying tariff enrollment and to all load-shaping devices that can provide grid services.  

Tiered Structure:  

  • The BYOD Tariff consists of three Riders—Level 1, Level 2, and Level 3—offering different incentives based on the value of the services provided to the grid. 

BYOD Riders – Broken Down: 

Level 1 Rider: Flexible User Dispatch 

  • Objective: Customers discharge their battery energy storage system daily for a customer-chosen two-hour (consecutive) duration. 
  • Flexibility: Customers choose the time within provided options that aligns with their load profile. 

Level 2 Rider: Utility DispatchTemporarily Suspended 

  • Objective: Customers provide grid support during utility-initiated events lasting up to one hour. 
  • Event Initiation: Events are remotely dispatched by the utility with a 24-hour advance notice (except for emergencies), usually during typical evening peak periods. 
  • Flexibility vs. Level 1: Less flexible than Level 1 Rider but offers fewer events and shorter durations. 
  • Event Frequency: Up to 156 events per year, with an opt-out option for three events without penalties. 

Level 3 Rider: System Grid Service ProgramTemporarily Suspended 

  • Objective: Customers contribute to grid services for up to two consecutive hours per event, capped at a total of 365 events per year. 
  • Dispatch Mechanism: Remote dispatch by Hawaiian Electric with a 24-hour advance notice. 
  • Event Frequency: Generally limited to one event per day, allowing customers sufficient time to respond. 
  • Incentives: Higher incentives compared to Levels 1 and 2 due to the additional grid services and longer event participation required. 

BYOD Participant Eligibility: 

The BYOD Tariff is open to consumers who want to contribute to the electricity grid using their own energy devices. Here’s what you need to know:  

  • Participants require advanced metering installation 
  • Available to all DER customers regardless of underlying tariff enrollment. 
  • Open to load-shaping devices that can provide grid services, excluding non-renewable devices. 
  • Participants must enroll with a minimum capacity (e.g., 1 kW or 1 kWh) determined by Hawaiian Electric. 
  • Concurrent enrollment in other demand response programs is allowed, ensuring the total commitment doesn’t surpass the participant’s system capacity. 
  • Rider Transition: Participants can switch between Riders once a year. 

Incentive Structure for the BYOD Tariff:  

Upfront Incentives: 

  • There is an upfront incentive of $100/kW of Projected Capacity, capped at $500 per customer, specifically for new device installations. $1,000 for customers with low and moderate incomes.  

Monthly Capacity Performance Incentives: 

  • Monthly incentives of $5/kW for Level 1, $5/kW for Level 2, and $10/kW for Level 3 Riders.  

Credit for Controlled Energy Exports: 

  • Compensation for controlled energy exports at the Smart DER Tariff’s evening peak export rate, regardless of export time. 

Customer Incentives: 

  • Compensates customers for energy exports during BYOD events at the evening peak rate. 

Monitoring and Performance Measurement: 

  • Performance Monitoring: Uses an annual performance measurement structure defined by Hawaiian Electric to ensure enrolled devices meet BYOD Tariff terms, either through self-consumption or grid export. 
  • Aim: Introduces additional value streams for DER customers beyond self-consumption. 

Low-and Moderate – Income (LMI) Adder  

The LMI Adder is an initiative designed to support and encourage participation in the BYOD Tariff program by individuals and households falling within the LMI category. It offers an additional financial incentive to alleviate some of the initial costs associated with installing Distributed Energy Resource Systems (DERS). 

Purpose and Benefits: 

  • Financial Assistance: The LMI Adder provides an extra financial incentive of $100/kW of Projected Capacity, capped at a maximum of $500 per customer, or $1,000 when combined with the upfront incentive. This effectively doubles the initial incentive for LMI customers, reducing the financial burden associated with the installation of these systems. 
  • Reduced Barriers to Participation: For many LMI individuals or families, the upfront costs of installing DERS could be a significant barrier to their participation in such programs. The LMI Adder aims to mitigate that barrier by providing additional financial support. 
  • Equitable Access: Historically, LMI customers have had limited access to and benefit from Distributed Energy Resource Systems due to financial constraints. The LMI Adder seeks to address this imbalance by providing extra incentives specifically tailored to their financial circumstances. 

Additional information for these programs can be found on Hawaiian Electric’s website. . If you have any questions regarding these programs and their specific details we highly recommend reaching out to HECO themselves. Contact information can be found here,