Devise a better net-metering agreement for residential solar

A question for my undergraduate environmental economics students:

Navigate to http://www.uhero.hawaii.edu/news/view/274 and read about the costs and benefits of installing PV, from a household's perspective and from Hawaiian Electric's. Play around with the interactive calculator. Dick Rosenblum, the CEO of Hawaiian Electric, often complains about net metering agreements because homeowners get retail prices instead of wholesale prices for the energy their panels generate. (Also see this article by energy economist Severin Borenstein.) 

As the UHERO blog post points out, a side effect from current net metering agreements is that households over-install solar. As a result, they often pay a zero marginal price for electricity, which discourages conservation. 

Devise a different model for net metering agreements that can address both Dick Rosenblum's complaints and restore incentives for households with solar to conserve energy.

Feel free to help my students out by suggesting answers in the comment section ;-)

Pushing the limit of solar in Hawai'i

Sorry for the radio silence.  Way too much going on.

However, I am doing a little blogging for UHERO, focusing on Hawai'i's interesting electricity situation.  We have the highest electricity prices in the country, about 3.5 times those on the mainland.  That fact coupled with tax credits and a lot of sunshine has given us more solar penetration, by far, than anyplace in the country.  Most statistics you'll find tend to be a bit dated---there's more penetration here than most people know, and it's pushing the limit of our grid.

Anyhow, below are links to my first two posts about the situation.  More to come soon, I hope.

Is Monopoly a Barrier to Hawai'i's Ascent?

Why are Hawai'i's Electricity Prices So High?