The state Public Utilities Commission has raised a cap that limits the size and amount of photovoltaic and other renewable energy systems that can feed electricity into Hawai'i utilities' grids, allowing their owners to get credit against their electric bills.

But some say the decision, almost two years in the making, will be outdated by the end of this year on some of the Neighbor Islands. They say resident and businesses installations will soon hit the cap's ceiling.

"It's sort of become obsolete because things are moving so quickly," said Brad Albert, head of Maui-based Rising Sun Solar LLC and the Hawaii PV Coalition, a nonprofit group that encourages the use of photovoltaic systems.

"People are installing systems in greater numbers than they ever have."

The state PUC earlier this month issued new limits for the net-energy metering, a program under which homeowners and residents get credit for unused electricity they send into the utility's electrical grid for use by other customers. At the end of the month, the contribution is offset against the customer's bill for energy they used.

The program has become more important as electrical customers throughout the state install their own photovoltaic and other generating systems to get away from rising electricity costs. Hawai'i's residents and commercial electricity customers pay the highest average rates in the nation, according to the U.S. Energy Information Administration.

In November, the statewide residential average in Hawai'i was 28.27 cents per kilowatt-hour, while the commercial statewide average was 25.64 percent. The national averages were 10.31 cents and 9.41 cents, respectively. Rates on O'ahu are generally lower than those on the Neighbor Islands.

In the past year, there's been explosive growth in such systems because of rising utility rates, tax credits and the ability to recoup some of the costs through net energy metering.

Hawaiian Electric Co. said on O'ahu there were 73 new net metering agreements signed last year, or more than the previous five years combined. Through the first two and a half months of 2008, there have been 20 new O'ahu applications with another 121 in the application process.

The PUC's decision increases the limit on system sizes to 100 kilowatts from 50 kilowatts of peak generating capacity for O'ahu, Maui and the Big Island.

It also increases the cap on total capacity under net energy metering agreements to 1 percent of peak system demand from 0.5 percent for each customer.

There are still other provisions reserving some of the cap for small systems used by residential customers.

Erik Kvam, head of solar power system company Zero Emissions Leasing LLC and a participant in the PUC proceedings, said the decision should have allowed bigger systems and a larger percentage of peak system demand.

He said a dozen states in the Mainland already allow systems with peak generating capacity of 1 megawatt (1,000 kilowatts) or more. Kvam said several have no limits on how many systems can be tied into a grid.

The PUC decision is "kind of a stop gap," Kvam said.

"The decision does extend net energy metering, but they're going to be bumping up against that 1 percent limit on the Neighbor Islands."

Albert said Maui's peak generating capacity is now about 2.2 megawatts of generating capacity.

But Albert said his firm alone has enough work in the pipeline and potential customers to eat up much of the cap by itself.

Albert said he'd like the cap set at 2 percent of peak generating capacity. He said the program doesn't cost the state anything and fits with its goal of getting 20 percent of its energy from renewable resources by the year 2020.

Hawaiian Electric spokesman Peter Rosegg said his company is willing to talk about raising the cap tied to peak generating capacity if space under the limit starts running out. The utility has been supportive of renewable energy ventures, in part because they cut the need to build more generating capacity.

"I don't doubt that as these projects start piling up that we'll be back at the PUC asking them to raise the cap," Rosegg said.

"We're committed to staying ahead of the increase."

Moreover, the recent PUC decision also includes a mechanism for the utilities to raise the limits through their integrated resource planning.

The PUC also approved a pilot program allowing the use of a limited number of larger generating units with capacities of 100 kilowatts to 500 kilowatts.

Rosegg said the utility will be putting together its proposal for a pilot program and that bumping up the net energy metering caps in steps helps everyone understand implications of it, including operation with more independent producers on its grid and how it can affect other rate payers.

Meanwhile, Hawaiian Electric will have its own photovoltaic project installed on its Ward Avenue facility by Hoku Scientific as it tries to learn the ins and outs of the systems.

"It's clearly a wave that's coming. We just want to do it in the right way," Rosegg said.

"If there's a need to increase those limits, I'm sure there will be plenty of motivation to do that."