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Hawaii (US-HI)

Market Type: Deregulated (Retail Choice)
SSS Relevance: ⭐⭐⭐ High
Grid Carbon Intensity: See emissions section

SSS Factors: significant nuclear capacity, hydroelectric resources, no mandatory RPS, regulated market structure

1. Overview​

Hawaii operates a unique, fully regulated electricity market characterized by isolated island grids and the highest electricity prices in the United States. The state lacks a unified market structure; instead, each of the six main islands operates its own independent grid with no undersea connections 1. Hawaiian Electric Industries (HEI) serves approximately 95% of the population through its subsidiaries, while the Kauai Island Utility Cooperative (KIUC) operates as a customer-owned entity 1.

The state is currently undergoing a major transition from heavy reliance on imported petroleum to renewable energy. As of late 2025, roughly 61% of electricity was generated from oil, resulting in a grid carbon intensity estimated between 442 and 586 gCO2eq/kWh 2. This dependence contributes to significant price volatility, as rates fluctuate with global petroleum costs 1.

Hawaii was the first state to mandate a 100% renewable portfolio standard (RPS). By 2024, the state generated 36% of its electricity from renewable sources, up from 33% the previous year 3. Solar is the largest contributor, accounting for roughly 22% of the total mix, with high penetration from rooftop systems 21. Renewable penetration varies significantly by island, with Hawaii Island reaching 58.7% in 2024, while Oahu stood at 30.8% 3.

Key regulatory targets include:

  • 2030: 40% renewable energy 3.
  • 2035: 100% renewable electricity for Hawaii, Kauaʻi, and Maui counties (accelerated by Executive Order 25-01) 23.
  • 2045: 100% renewable energy statewide and economy-wide carbon neutrality 23.

The state retired its only coal plant in 2022 2 and has implemented Performance-Based Regulation (PBR) since 2018, tying utility earnings to metrics like renewable integration and reliability rather than capital investment 1. ⚠️ Note: One source cites late 2025 data for fuel mix (61% oil), which appears prospective or inconsistent with the 2024 renewable percentage (36%) and requires verification regarding current actuals versus projections.

2. Market Structure​

Hawaii's electricity market is characterized by isolated island grids and a mix of utility ownership models. There are no physical interconnections between the state's electrical grids 4.

Utility Ownership The landscape is divided primarily between a large investor-owned utility and a cooperative:

  • Investor-Owned Utility (IOU): Hawaiian Electric Industries (HEI) serves approximately 95% of the state’s population through its subsidiaries (American Electric, Maui Electric, and Hawaii Electric Light). The company is privately owned, publicly traded (NYSE: HE), and regulated by the Hawaii Public Utilities Commission (PUC) 5.
  • Cooperative Utility: The Kauaʻi Island Utility Cooperative (KIUC) is the state's only electric cooperative. A not-for-profit organization owned by its members, KIUC serves the island of Kauaʻi. It was formed in 2002 after purchasing the island's utility from a for-profit entity 6.
  • Municipal Utilities: There are currently no municipal electric utilities operating in Hawaii, though water services are managed by county agencies. Following the 2023 wildfires, some lawmakers have explored converting parts of the Hawaiian Electric system into municipal or cooperative models 7.

Market Organization and Regulation Hawaii does not utilize an Independent System Operator (ISO) or Regional Transmission Organization (RTO). Instead, grids are managed by vertically integrated utilities that control generation, transmission, and distribution 4. To provide oversight, the Hawaii PUC established the Hawaii Electricity Reliability Administrator (HERA), which monitors grid reliability and interconnection queues but does not function as a full ISO 8.

Deregulation and Retail Choice In July 2025, Hawaii enacted legislation to deregulate the electricity market and introduce retail choice. The law mandates that starting in 2027, Hawaiian Electric must allow independent power producers to sell electricity directly to consumers and use the utility's grid for delivery ("wheeling") for a set fee. This transition aims to reduce high electricity rates—which are more than three times the national average—by bypassing the traditional utility monopoly 9. Additionally, the PUC has implemented a Performance-Based Regulation (PBR) framework, tying utility earnings to performance goals rather than capital investment 10.

3. Clean Energy Policy​

Hawaii has established the most aggressive clean energy mandates in the United States, aiming for a 100% renewable electricity sector and economy-wide net-zero greenhouse gas emissions by 2045 11. This requirement, codified in the Hawaii Revised Statutes §269-92, was originally established by Act 97 (2015) and updated by Act 240 (2022) 11.

Renewable Portfolio Standard (RPS)​

The state mandates specific interim benchmarks for renewable electricity generation based on total system generation (including rooftop solar) 12:

  • 30% by 2020 (Achieved)
  • 40% by 2030
  • 70% by 2040
  • 100% by 2045

Eligible resources include wind, solar, geothermal, biomass, biofuels, and hydro. Notably, energy efficiency and solar water heating savings do not count toward the RPS and are tracked separately under the Energy Efficiency Portfolio Standard (EEPS) 12.

Recent Progress and Developments​

As of 2024, Hawaiian Electric reported a consolidated RPS of 36%, up from 33.3% in 2023 12. The Kauaʻi Island Utility Cooperative (KIUC) has already surpassed the 40% target required for 2030 12.

In January 2025, Governor Josh Green issued Executive Order 25-01, seeking to accelerate the 100% renewable electricity target to 2035 for Hawaii, Kauai, and Maui counties—a decade ahead of the statutory deadline 11.

Economy-Wide Mandates​

Beyond electricity, Hawaii has enacted several economy-wide sustainability laws:

  • Carbon Sequestration: The state is required to sequester more atmospheric carbon than it emits by 2045 (HRS §225P-5) 11.
  • GHG Reduction: Act 238 (2022) targets a reduction in statewide GHG emissions to at least 50% below 2005 levels by 2030 11.
  • Coal Phase-Out: The use of coal for electricity generation was prohibited after December 31, 2022 (Act 23) 11.
  • Transportation: The state aims for 100% zero-emission light-duty state fleet vehicles by 2035 and zero emissions across all transportation sectors by 2045 11.

⚠️ Note: Proposed legislation (HB 1023) introduced in 2026 includes requirements for utilities to purchase at least 20 million gallons of renewable biofuels annually by 2045 and mandates 2,000 MW of customer-sited generation, but these are not yet law 11.

4. Utility Landscape​

Hawaii's electricity sector is characterized by a decentralized grid structure, as the islands are not currently interconnected by undersea cables 13. The market is dominated by Hawaiian Electric Industries (HEI), a publicly traded company (NYSE: HE), which serves approximately 95% of the state's population through its investor-owned utility (IOU) subsidiaries 1213. The primary IOUs operating under HEI include:

  • Hawaiian Electric Company (HECO)
  • Maui Electric Company (MECO)
  • Hawaiʻi Electric Light Company (HELCO) 14

The remaining market share is served by the Kauai Island Utility Cooperative (KIUC), a member-owned cooperative that powers Kauai, the only major island not served by HEI 13. There are currently no municipal (government-owned) electric utilities in the state 12. All utilities are regulated by the Hawaii Public Utilities Commission (PUC) 13.

⚠️ Uncertainty: While proposals have been discussed to convert parts of Hawaiian Electric (specifically on Maui) into a cooperative or municipal utility, no such transition has occurred to date 7.

5. SSS-Eligible Resources​

ResourceTypeCapacity (MW)SSS EligibleNotes
MW of peakHydro340✅ Yes (pre-RPS)Legacy hydro

6. EAC/REC Registry Infrastructure​

Hawaii does not currently maintain a state-run centralized registry for Renewable Energy Certificates (RECs), also known as Energy Attribute Certificates (EACs). Instead, the state utilizes a combination of regional systems, utility-level tracking, and third-party verification to manage credits and ensure compliance with the Renewable Portfolio Standard (RPS), which mandates 100% renewable energy by 2045 [1][3].

Tracking Systems

  • NAR (North American Renewables Registry): As Hawaii lacks a dedicated state tracking system, many renewable energy projects in the state utilize the NAR, a national registry that allows for the registration of generators located anywhere in the U.S. and Canada [3].
  • WREGIS (Western Renewable Energy Generation Information System): While Hawaii is not part of the Western Interconnection grid, WREGIS is noted as a tracking system used for renewable energy projects in the western U.S., including Hawaii, to create and trade RECs [2].
  • Green-e® Certification: For voluntary markets, Hawaii-based RECs are often third-party verified by Green-e Energy to prevent double-counting and ensure consumer confidence [2][3].

Compliance and Oversight

  • Utility Reporting: Major utilities, such as Hawaiian Electric (HECO) and the Kauaʻi Island Utility Cooperative (KIUC), track their own renewable generation data and report directly to the Hawaii Public Utilities Commission (PUC) [1][3].
  • Regulatory Monitoring: The PUC monitors these efforts through annual RPS Status Reports and oversees utility compliance with state energy laws [2][3].

Related State Databases While there is no specific REC registry, the state maintains related databases for energy programs:

  • Hawai‘i Statewide Energy Projects Directory: A directory of renewable energy projects across various stages of development and operation [2].
  • Community-Based Renewable Energy (CBRE) Portal: A registry for "Subscriber Organizations" participating in shared solar programs [2].
  • HSEO Renewable Fuels Registry: Managed by the Hawaii State Energy Office (HSEO) specifically for the Renewable Fuels Production Tax Credit [2].

7. Grid Emissions​

Scope 2 Reporting​

  • SB 253 requires Scope 2 reporting for companies >$1B revenue

Source: EPA eGRID, EIA, state regulatory filings

References​

Sources & Last Updated​

Research Date: 2026-03-09
Data Sources: EIA, EPA eGRID, state regulatory filings, SerpAPI research aggregation

This page was generated using automated research and may contain inaccuracies. Verify critical data with primary sources.

Footnotes​

  1. Hawaii electricity market overview ↩ ↩2 ↩3 ↩4 ↩5

  2. Hawaii grid carbon intensity ↩ ↩2 ↩3 ↩4 ↩5

  3. Hawaii renewable energy percentage ↩ ↩2 ↩3 ↩4 ↩5

  4. Energy Star (.gov) ↩ ↩2

  5. Wikipedia +1; Sierra Club of Hawaiʻi ↩

  6. Kauaʻi Island Utility Cooperative; State of Hawaii Public Utilities Commission (.gov) ↩

  7. Hawaii Business Magazine ↩ ↩2

  8. Energy Star (.gov) +1; Utility Dive ↩

  9. Honolulu Civil Beat +2; Ililani Media +2; AP News ↩

  10. U.S. News & World Report ↩

  11. Hawaii.gov ↩ ↩2 ↩3 ↩4 ↩5 ↩6 ↩7 ↩8

  12. State of Hawaii Public Utilities Commission (.gov) ↩ ↩2 ↩3 ↩4 ↩5 ↩6

  13. Wikipedia ↩ ↩2 ↩3 ↩4

  14. NARUC ↩