Hawaiian Electric customers on Oahu can help ensure sufficiency of the island’s power supply — and get paid for it — by adding battery storage to existing or new rooftop solar systems.

The utility Monday began accepting applications for a new program created to avoid potential power shortages in the next year or two after Oahu’s largest power plant is retired.

The “Battery Bonus” program will provide customers a one-time payment between $500 and $850 per kilowatt of new battery storage.

Battery system costs vary widely. But in some cases the incentive payment could cover half the cost of a basic 5-kilowatt battery at the high end of the payment range not including federal or state tax credits, while the customer also receives compensation for any electricity the utility pulls from the battery during a daily peak-use period.

“This is exciting,” said Rocky Mould, executive director of the Hawaii Solar Energy Association. “The average homeowner is part of the solution to keeping the lights on.”

The Hawaii Public Utilities Commission, a state agency that regulates Hawaiian Electric, approved the program in June as an emergency effort to avoid a potential power shortfall when a coal-fired power plant owned by AES Corp. is slated for retirement in September 2022.

There is concern that enough planned new utility- scale power from renewable energy sources won’t be developed in time to offset the loss of the 180-megawatt AES plant at Campbell Industrial Park, which provides around 16% of Oahu’s electricity during peak evening hours.

At the same time, Hawaiian Electric has had to limit rooftop solar systems if they don’t have battery storage because too much power can flow to the grid during the day when energy production is high and use is lower.

Hawaiian Electric’s battery incentive program allows up to 50 megawatts of new battery storage connected to rooftop solar systems of residential and commercial customers.

Total incentive payments are expected to cost up to $34 million, which ultimately will be paid for by utility ratepayers.

Hawaiian Electric estimates that a residential customer using 500 kilowatts of energy a month will pay an additional $1.37 a month to pay for Battery Bonus.

Robert Harris, a spokesman for the Hawaii PV Coalition, said the program was the product of an intense and reasonably collaborative effort between the utility, the PUC and other stakeholders.

“It’s a pretty innovative, thoughtful solution,” he said.

Hawaiian Electric said the program, which could provide the utility with power for 10 years, will address the short-term AES plant retirement issue and also help reach Hawaii’s longer-term goal of having 100% clean energy by 2045.

“This one-time offer is an excellent opportunity for new or existing solar customers to enjoy the added benefits of home energy storage, support the grid that serves all customers and move us closer to our 100% clean energy for electricity goal by 2045,” Yoh Kawanami, the company’s co-director of customer energy resources, said in a statement.

Under the program, customers can add any amount of battery storage to new or existing rooftop solar systems, and owners of existing systems also are allowed to add up to 5 kilowatts of new photovoltaic panels.

Hawaiian Electric will pay more to those who participate more quickly. Participants who help provide an initial 15 megawatts of battery storage will receive $850 per kilowatt. The payment drops to $750 per kilowatt for the next 15 megawatts of battery additions and then to $500 per kilowatt.

The benefit to the grid is that battery systems in the program will provide electricity used by the system owner or the grid each evening for two hours between the peak use period of 6 to 8:30 p.m.

If energy from a battery goes to the grid, Hawaiian Electric pays for that power under one of the various rooftop solar program arrangements it has with a customer.

Applications are being accepted through June 23, 2023, or until the 50-megawatt cap is reached.

An initial term of battery power use lasts through the end of 2023 when Hawaiian Electric expects to have more new utility-scale renewable energy facilities online.

After that, program participants will have an option to transition to a subsequent phase of the program that has yet to be defined by the PUC for the remainder of the 10-year term.

Program participants also have an option to exit the program early if they notify the utility and repay a prorated portion of the incentive, which for tax purposes is treated as income.

FIND OUT MORE

Program details, including permitting requirements, are available at 808ne.ws/3rjGSiV.