Dive Brief:

The Hawaii legislature on Tuesday passed a bill that would set a 100% renewable portfolio standard by 2045.

The bill, House Bill 623, sets a goal of 30% renewables by 2020, 70% by 2040, and 100% by 2045.

The bill passed the Senate 24-1 and the House 50-1. It now heads to the desk of Governor David Ige, who is a Democrat.

Dive Insight:

The power sector is watching Hawaii closely because it is the one state where the economics of rooftop solar can beat the utility grid on price alone. That's because electricity prices in Hawaii are the highest in the country at nearly three times the national average.

State Representative Chris Lee, a Democrat who introduced House Bill 623, says that is a big reason why Hawaii needs to accelerate its transition to renewables. "Hawaii is proving to the rest of the country that renewable energy can be cheaper, cleaner and can help consumers to cut their electric bills down to near-zero,” he said. “Moving to 100 percent renewable energy will do more to reduce energy prices for local residents in the long term than almost anything else we could do."

If the Governor signs the bill, Hawaii would have the highest renewable portfolio standard in the country by far. Hawaii's 100% renewables goal would need to be met within the state's closed energy ecosystem — a caveat that many other states are not restricted to. Other states may use imported renewable energy from neighboring states, and they may also buy renewable energy credits that count towards portfolio standards.

Hawaii met 18% of its electricity needs with renewables in 2013, according to the Database of State Incentives for Renewable Energy (DSIRE). The Pacific Business Journal reports that Hawaii is now getting 21% of its electricity from renewables.

Hawaii is currently on track to meet a 65% renewables goal by 2030, which was set when the Hawaiian Electric Companies (HECO) filed a revised integrated resource plan with the Hawaii PUC last year. HECO reportedly attended an event in support of House Bill 623 on Tuesday, according to the Honululu Star Advertiser.

NextEra Energy has an agreement with HECO to purchase the utility holding company. Observers expect the acquisition to be approved by year's end. That appears to be a big part of the reason why this aggressive renewable portfolio standard was passed now as opposed to later, when NextEra could have more influence on the state's policy goals.