By Herman K. Trabish, Utility DIVE | August 27, 2015 (abbreviated)
There is a simple way to resolve the solar war in Hawaii and all the stakeholders in the struggle have called for it in one way or another.
The fight is over what solar owners will be paid for the electricity their systems send to the grid. Most agree today’s net energy metering (NEM), which remunerates at the retail electricity rate, no longer works with solar on 12% of the state’s roofs, penetration increasing rapidly, and residents paying the nation's highest electric rates.
The solar wars began when advocates clamored for the state's electric utilities to increase the speed of the transition to distributed solar and the utilities pushed back, arguing for a change in the NEM policy.
“Pricing is key. If you don’t get real about variable pricing and allow prices to vary throughout the day in a flexible way, associated with the true value of the electricity, you get a lot of inefficiency,” explained report coauthor and UHERO Associate Professor of Economics Michael J. Roberts.
An extreme example of the waste from current pricing is what is happening on Maui, Roberts said. The island’s wind generation often exceeds the system’s ability to use it, even with Hawaii’s aging and inflexible thermal plants cycled down as low as possible. The turbines are therefore turned away from the wind, wasting free electricity, while Maui residents continue to pay over $0.40 per kWh for their electricity and some four times the national average, according to Roberts.
Solar is approaching a level, the paper warns, where similar curtailment of residential system owners could be an issue.
“On Maui, the marginal cost for the wind-generated electricity is nearly zero but the price signal doesn’t drop,” explained UHERO Associate Professor of Urban and Regional Planning and paper co-author Makena
Coffman. “That is the inefficiency. If the price dropped, that would be a signal to customers and they would respond over time by shifting the load.”
“It would be better to use the electricity from the wind when it is blowing and there must be people who would use it,” Roberts said. “You could make that happen naturally by letting prices vary.”
One is for any type of customer. It would provide “hourly prices that reflect the continuous variation in supply and demand of electricity.” It would condition customers to price signals. It would also “open a door to innovative ideas for storing electricity or otherwise shifting loads over time.”
(full text available online)

AP/IB Economics
Commentary Outline for “Is variable pricing the way out of Hawaii's solar wars”
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Your assignment is to write a news article commentary limited to 750 words including the elements of the IB Commentary Rubric (detailed rubric attached):
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B.
Diagrams: the appropriate one for the issue, used correctly, titled
Terminology: be technical, use econ vocabulary, define properly
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Application: link to the real world (phrases from the article)
Analysis: link to textbook theory (concepts from the chapter)
Evaluation: the big BUT; balanced good/bad, agree/disagree, short-run/long-run, winner/loser, be sure to use the signal words “but” or “however” or “on the other hand,” etc.
(*intro paragraph should ask a question related to your evaluation paragraph at the end)
Read the article.
As you read the article, highlight any key economic terms. Brainstorm other related economic ideas and diagrams. Look in your textbook and notes. Use all these things to make a concept map.
Write your opening paragraph. You should summarize the article in 2-3 sentences and end with a question related to your final evaluation paragraph(s).
Provide citations for any definitions, diagrams, or quotes you use. You can create digital diagrams online and insert them into your commentary: http://www.mhhe.com/economics/econgk.mhtml
This commentary is due in two weeks:
You will submit it to turnitin.com.
If you have not yet registered on turnitin.com, you will need visit the website and “create a user profile”. If you have already registered, you will need to log on and “enroll in a class”. The class
ID/password is on my homework site.

IB Internal Assessment Criteria (commentaries)
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Criterion A: Diagrams: This criterion assesses your ability construct and use diagrams.
1 Relevant diagrams are included but not explained, or the explanations are incorrect.
Relevant, accurate and correctly labeled diagrams are included, with a limited explanation.
Relevant, accurate and correctly labeled diagrams are included, with a full explanation.
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Clear title with axes fully labeled
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Arrows showing direction of any shifts or changes
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Full explanations of how the diagram relates to dynamic changes in your article
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Criterion B: Terminology: This criterion assesses your ability use appropriate economic terminology.
Terminology relevant to the article is included in the commentary.
Some key terms are defined, or they are defined incorrectly.
Terminology relevant to the article is used appropriately throughout the commentary.
All key terms are defined correctly.
Criterion C: Application: This criterion assesses your ability to recognize, understand and apply economic information in the context of the article.
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Relevant economic concepts and/or theories are applied to the article.
Relevant economic concepts and/or theories are applied to the article appropriately throughout the commentary.
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Criterion D: Analysis: This criterion assesses your ability to explain and develop appropriate economic theories and/or concepts in the context of the article.
There is limited economic analysis relating to the article.
There is appropriate economic analysis relating to the article.
There is effective economic analysis relating to the article.
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Criterion E: Evaluation: This criterion assesses your ability to synthesize your analysis in order to make judgments that are supported by reasoned arguments.
Judgments are made that are unsupported, or supported, by incorrect reasoning.
Judgments are made that are supported by limited reasoning.
Judgments are made that are supported by appropriate reasoning.
Judgments are made that are supported by effective and balanced reasoning.
 look at both sides of an issue, the big BUT, good/bad, agree/disagree
 consider short-run / long-run consequences
 examine the impact on different stakeholders, i.e.; winners / losers
 discuss advantages / disadvantages
 prioritize better solutions.