HECO could charge more for solar

Hawaii's solar energy boom has grown to the point where rooftop photo­voltaic panels are providing all of the electricity consumed during some daylight hours in about 13 percent of Oahu neighborhoods, the Hawaiian Electric Co. said.

The high level of PV penetration, far beyond what is occurring anywhere on the mainland, is the result of a doubling of solar power generating capacity in Hawaii nearly every year since 2005. The rapid growth has put Hawaii at the forefront of an evolving effort by utilities nationally to accept greater amounts of intermittent solar energy into their electrical grids.

While HECO is taking steps to integrate more solar energy, that could result in added costs for some new solar customers. If HECO determines improvements are needed in a certain area to accommodate additional amounts of solar energy, new solar customers may have to bear the cost.

This week HECO began contacting its Oahu customers planning on installing PV systems, as well as PV contractors, to make sure the customers are informed of any equipment upgrades they may have to pay for.

The upgrades to the Oahu grid are necessary, HECO says, because of the rapid growth in solar installations.

The latest numbers from HECO, unthinkable just a few years ago, show that solar energy provides all of the minimum daytime power needs for 54 circuits, or neighborhoods, out of the 416 circuits on Oahu. The threshold has been reached on 26 out of Maui's 132 circuits and 17 of 143 circuits on Hawaii island.

"Those are impressive figures. Saturation on some of those circuits is higher than any other area in the country," said Tim Lindl, attorney for the nonprofit Interstate Renewable Energy Council based in Latham, N.Y.

Roughly 5 percent of HECO's customers on Oahu and Maui, and 4 percent of its customers on Hawaii island, have installed PV systems, according to data from the utility. That compares with about 1.5 percent of the customers served by California's two largest electric utilities, Pacific Gas and Electric Co. and Southern California Edison.

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Two weeks ago, this column covered concerns on the part of consumers that had contracted to install solar systems and on the part of industry leadership. In the meantime, the state Legislature held an informational hearing during which it questioned HECO about its procedural changes and also heard testimony from the Interstate Renewable Energy Council, the Hawaii Solar Energy Association and the Hawaii PV Coalition, ending with a directive to work on a solution and report back next month.

HECO acknowledged that the transition to new procedures on Sept. 6 left many customers that had followed all the company's rules in what the solar industry calls "solar limbo." This then caused a significant slowdown for many solar installers.

HECO announced on Sept. 6 that consumers wanting to install solar systems first had to get HECO to confirm that the grid in their neighborhood could handle the added solar power. HECO said if the grid needed an upgrade to handle more solar power, the consumers installing new solar systems would have to pay for those upgrades.

This week, I had the opportunity to interview Peter Rosegg, a spokesman for HECO. He said that at the informational hearing, all parties agreed that safety cannot be compromised. Responsible solar installers also acknowledged the utility's statement that too much solar on a circuit without proper protective equipment risks the safety of customers and utility crews and damage to customer electronics and utility equipment such as lines, transformers and substations. Still, many solar industry leaders are skeptical, saying that HECO is heavily overplaying concerns about safety, reliability and grid penetration.

Delays both for HECO customers and the solar industry are frustrating and costly. The impact of the changed procedures, from the solar industry's point of view, include 30 percent to 75 percent of their jobs postponed; "millions" lost in revenue; "millions" in commitments to vendors; warehouses full; lost hours for employees; continued payment so as not to lose skilled and hard-to-find electrical journeymen; and six weeks of confusion.

In response, and in an effort to work with the Hawaii Solar Energy Association and PV Coalition, HECO has pledged to try to help some 1,000 customers who may have committed to bank loans, obtained building permits and ordered solar equipment but had not yet notified the utility in advance as is now required.

While HECO is a major reason for the slowdown, the solar industry is also in the midst of an inevitable industry consolidation. The combination of federal and state tax credits together with bonus depreciation in recent years has fueled a dramatic, unsustainable proliferation in the number of companies in the market. Concurrently, as the Great Recession resolves, investment capital, once vying for solar projects, may be pulling back in favor of other competing opportunities.

During the last legislative session, strong consideration was given to reducing state credits now in place. It didn't happen. Legislators should let it go. Federal credits begin to phase down at the end of 2016. Tapering state credits now while HECO is also in transition on its policies and its grid is a dangerous prospect. The phasing out of additional federal Safe Harbor and bonus depreciation benefits together with industry consolidation portend substantial headwinds for solar.

The big picture is that modern civilization is quickly realizing that the health of the planet and its inhabitants is, in part, dependent on our collective ability to move beyond petroleum toward a consortium of clean, renewable energy options including not only solar, but also wind, geothermal and hydroelectric sources. HECO's ability to support this transition to the maximum extent possible is a critical step. The task is huge, but essential. As a society, we will get there in time.