The demise of the is­land so­lar power in­dustr y is fore­seen via a state cap on rooftop sys­tems

Honolulu Star-Advertiser - - FRONT PAGE - By Kathryn Myk­le­seth kmyk­le­seth@starad­ver­

Hawaii’s rooftop so­lar in­dus­try, al­ready strug­gling with a re­cent re­duc­tion in an in­cen­tive pro­gram, could come to a stand­still next year.

Last month, with lit­tle fan­fare, the state Pub­lic Util­i­ties Com­mis­sion an­nounced it will cap new res­i­den­tial and com­mer­cial so­lar projects at 25 megawatts or about 4,500 new sys­tems on Oahu. It’s likely the cap will be met by the mid­dle of next year, if not sooner. Once it is met, no ad­di­tional rooftop so­lar sys­tems will be ap­proved for con­nec­tion to the grid.

The PUC de­cided to halt new rooftop so­lar in­stal­la­tions to pre­vent dam­age to the grid and al­low other re­new­able en­ergy sources — such as wind and geo­ther­mal — to catch up with res­i­den­tial so


The cap puts in jeop­ardy an in­dus­try that has grown to 115 com­pa­nies with 2,200 employees, ac­cord­ing to the So­lar En­ergy In­dus­try As­so­ci­a­tion’s count as of Septem­ber.

“It will be gone in 2016,” said Chris De­Bone, man­ag­ing part­ner at Hawaii En­ergy Con­nec­tion, who expects the cap to be met by May or June.

PUC Chair­man Randy Iwase said the cap was nec­es­sary be­cause Hawaii needs a va­ri­ety of re­new­able en­ergy re­sources to achieve its goal of 100 per­cent re­new­able elec­tric power by 2045, and that prob­lems with HECO’s old grid leave lit­tle space for all re­sources to con­nect.

“I can tell you there is an is­sue with the grid,” Iwase said. “If we had not done what we did or what

If we had not done what we did or what we are do­ing … the grid would be sat­u­rated shortly. We would have to shut ev­ery­thing down if we put all of our eggs in the PV (pho­to­voltaic) bas­ket.” Randy Iwase Chair­man, PUC

Once grid sup­ply is gone or the cap has been met, then en­ergy stor­age or en­ergy man­age­ment is go­ing to be a ne­ces­sity, not an op­tion.” Chris De­Bone Man­ag­ing part­ner, Hawaii En­ergy Con­nec­tion

we are do­ing … the grid would be sat­u­rated shortly. We would have to shut ev­ery­thing down if we put all of our eggs in the PV (pho­to­voltaic) bas­ket.”

Iwase said it could take about a year and a half for the cap to be reached but that even­tu­ally, rooftop so­lar “will be halted.”

HAWAI­IAN ELEC­TRIC CO. has con­nected 51,000 rooftop so­lar sys­tems, or 272 megawatts, to its Oahu grid. So far this year, HECO has ap­proved more than 9,700 so­lar sys­tem ap­pli­ca­tions, or about 58 megawatts worth of power, for Oahu.

Rep­re­sen­ta­tives from the so­lar in­dus­try said the cap leaves room for 4,000 to 5,000 ad­di­tional sys­tems. The num­ber would be lower if com­mer­cial sys­tems are in­cluded.

Roy Sk­aggs, project de­vel­oper at Alternate En­ergy Inc., said the limit will be met by sum­mer. “It’s not long,” he said.

Drew Bradley, di­rec­tor of busi­ness de­vel­op­ment at REC So­lar, said it would be met within months.

“From the time it was an­nounced to the time it is fully sub­scribed, it is not more than three to six months, if that,” Bradley said.

Colin Yost, prin­ci­pal at RevoluSun, said he could see the so­lar in­dus­try hit­ting the limit as soon as March.

THE PUC said one ma­jor con­cern is the fu­ture of HECO’s large fos­sil fuel-pow­ered plants, which are less ef­fi­cient when turn­ing off and on to ad­just to fluc­tu­at­ing renewables on the grid.

So­lar ad­vo­cates say the de­vel­op­ment of cheap, safe and ef­fi­cient bat­tery sys­tems will go a long way to solv­ing the prob­lems caused by high lev­els of so­lar power on the grid.

De­Bone, of Hawaii En­ergy Con­nec­tion, said Hawaii needs to find a way to shift the ex­cess en­ergy cre­ated by pho­to­voltaic to the evenings to bal­ance out the work re­quired of the older fos­sil fuel-pow­ered plants.

“Putting more so­lar in dur­ing the day isn’t fix­ing that prob­lem,” he said.

Richard Walls­grove, pro­gram di­rec­tor at Blue Planet Foun­da­tion, said there are tech­ni­cal prob­lems with the grid but that faster en­ergy stor­age de­ploy­ment would help solve them.

“The tech­ni­cal prob­lems ex­ist but the so­lu­tions ex­ist,” Walls­grove said. “Ev­ery time we add a re­new­able en­ergy re­source to the grid, we have a tech­ni­cal is­sue to solve. As much as I think it is eas­ier for us to say there is cap on this be­cause of a tech­ni­cal prob­lem, we have to solve it at its core. It is really tech­ni­cal plan­ning and eco­nomic is­sues. There was a tech­ni­cal prob­lem three years ago when we didn’t have enough re­new­able en­ergy on the grid and the peak (elec­tric use) was at noon.”

Walls­grove said there is space avail­able for so­lar to con­nect be­yond the cap. “There is definitely more room on the grid than that,” he said.

THE 25-MEGAWATT CAP on so­lar was part of the PUC’s Oct. 12 or­der that roughly cut in half the credit rooftop so­lar own­ers get for power sent into the grid, and raised the min­i­mum monthly bill for so­lar cus­tomers to $25.

The cap ap­plies to ap­pli­ca­tions for ex­port­ing sys­tems that were sub­mit­ted on or af­ter Oct. 14.

Af­ter the cap is reached, HECO cus­tomers will still be able to add so­lar to their house but will not be able to send power to the grid. They will be able to take power from the grid when needed. Cus­tomers look­ing to in­stall so­lar will ei­ther need to cur­tail the ex­cess en­ergy their sys­tems pro­duce or get a bat­tery to pre­vent their ex­cess so­lar en­ergy from be­ing sent to the grid.

“Once grid sup­ply is gone or the cap has been met, then en­ergy stor­age or en­ergy man­age­ment is go­ing to be a ne­ces­sity, not an op­tion,” De­Bone said.

Yost, of RevoluSun, said the or­der was made with bad tim­ing be­cause bat­ter­ies are too ex­pen­sive for the av­er­age per­son, not­ing there is no state tax in­cen­tive for bat­ter­ies and that a 30 per­cent fed­eral tax credit will sun­set at the end of 2016.

“There are a num­ber of prob­lems of do­ing it the way they did,” Yost said. “One of them is there is no state credit for bat­tery stor­age. You try to push this mar­ket into ex­is­tence with a very short timetable with­out the in­cen­tives that ex­isted for PV. They are just push­ing very hard and very fast.”

IWASE SAID the “ini­tial” cap will be re­vis­ited in a year and a half.

“Noth­ing is set in stone,” Iwase said. “We re­al­ize there has to be mod­ern­iza­tion of the grid to ac­com­mo­date PVs and other things. We are hop­ing, an­tic­i­pat­ing that we will be pre­pared to face a Phase 2 de­ci­sion at that time.”

Iwase said the PUC is also push­ing the util­ity to mod­ern­ize the grid. The PUC or­dered HECO to im­prove the util­ity’s “Power Sup­ply Im­prove­ment Plan” ear­lier this month. The plan in­cludes a timeline for re­tir­ing fos­sil fuel plants, us­ing new tech­nol­ogy such as en­ergy stor­age and adding a di­verse port­fo­lio of low-cost renewables.

“Ev­ery­thing has to evolve,” Iwase said. “We have to evolve on the grid. We have to evolve on the kinds of pro­grams and ini­tia­tives if we are go­ing to achieve 100 per­cent re­new­able.”

Iwase said rooftop so­lar is not the only op­tion, but just one com­po­nent of the state’s 100 per­cent re­new­able plan.

“Is it im­por­tant? Yes, it is,” he said. “So is bat­tery stor­age res­i­den­tial, bat­tery stor­age util­ity grade and time of use (dif­fer­ent elec­tric rates for dif­fer­ent times of day).”

Iwase said he wanted to see more com­mu­nity so­lar, com­mu­nity wind farms, util­ity-scale bat­tery stor­age, hy­dro­gen fuel cells and geo­ther­mal de­vel­op­ment.

“All of that has to be com­bined,” he said.



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