Time-of-Use Electricity Pricing: Implications of Hawai'i's Pilot Program

10 May 2023

We explore the implications of the Shift & Save time-of-use (TOU) pilot program soon to be introduced by Hawaiian Electric Company. Designed to reduce electricity prices during daylight hours when solar power is abundant and increase them during the evening when the sun sets, and demand rises, this initiative could reshape how 17,000 customers consume energy. If you’re chosen for the pilot program, you’ll be automatically enrolled unless you opt out. While the pilot might benefit many customers, those with roof-top solar, who are over-represented in the pilot, will likely see considerably higher bills unless they opt out. We find that more profound changes in rate design are needed to entice rooftop solar customers to participate in variable pricing programs and to limit the extent to which rooftop solar customers’ savings represent a cost shift to other customers.