Hawaiian Utility Fights Solar Industry Over Private Installations

U.S. Utilities Make Their Own Plays for Control of Distributed Power

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If Hawaii’s largest utility gets its way, the islands’ abundant sunshine may be wasted.

In February, the Hawaiian Electric Company (HECO) proposed a ban on a booming industry of rooftop solar installations, claiming that too much distributed power generation could destabilize the islands’ isolated power grids. It was forced to back off by the public backlash, but environmental groups and the solar industry say the utility is trying other tactics that will stifle the growth of renewable energy in the state.

“Although HECO is backing away from doomsday for the local renewable industry at this point, all they did was defer the problem,” said Isaac Moriwake, an attorney for Earthjustice who is representing the Hawaii Solar Energy Association.

“Instead of looking at the renewable energy companies going out of business immediately, we’re looking at that happening maybe in half a year or toward the end of the year. Now they’re facing the prospect of a slow strangulation instead of a shot to the head.”

The battle over the islands’ energy is just one example of efforts by some utility companies to control distributed power and its potential to eat into their profits.

Hawaii, which currently gets more than 90 percent of its power from fossil fuels, has adopted some of the strongest renewable energy standards in the country. In 2008, the legislature approved a renewable portfolio standard requiring 40 percent of electricity to be produced by renewable sources by 2030. The state and the utilities entered into an agreement that same year that will require 40 percent of total electricity generation be from renewables, as well as 70 percent of all energy, including transportation, by 2030.

Two renewable energy programs are at the heart of HECO’s attempt to block installations. One, the net energy metering program, has been running since 2001 and allows customers who install solar panels to offset the cost of their entire power bill. Another project under consideration is a feed-in tariffs program like those already running in Europe; customers who produce more power than they need through solar installations would feed it back into the grid and earn money for that electricity.

According to Moriwake, HECO has proposed scaling back the net energy metering program, backing off a promise to move the cap on power produced under that umbrella from 3 percent of the total to 4 percent.

“As far as the feed-in tariff program, they’re declaring it dead-on-arrival” in some of the islands, he said. “So after spending more than a year trying to develop the program — and realize, they were the ones that proposed that program in the first place — they’re boarding it before it begins.”

Destabilizing the Grid?

HECO argues that adding too much intermittent distributed generation into the grid could result in destabilization issues, affecting the power supply to customers.

“We do believe that we need to work quickly with our partners in the renewable energy industry to resolve some of these technical issues, because it is really in all of our best interest to get as much renewable energy serving our customers on the grid as possible,” said Darren Pai, a spokesperson for HECO. He added that solar installations are indeed now continuing on all islands.

Others say that there is a point at which too much distributed power might disrupt the grid, but Hawaii is still far from reaching that point.

“This isn’t a problem they invented out of nowhere. The issue is just at what point you start encountering this problem,” said Mark Duda, president of the Hawaii Solar Energy Association.

There is some indication that when distributed power accounts for 10 percent of the total on the grid that it might create a problem, he said, but on most of the Hawaiian Islands the amount is currently closer to 5 percent.

Stephen Connors, an expert on transmission and grid issues at the MIT Laboratory for Energy and the Environment, said that specific weather patterns on the Hawaiian Islands could make solar panel outputs more varied than in other locations, and it is that rapid variation that could be destabilizing.

“If the local grid company cannot or does not upgrade the distribution system fast enough to handle this increase in dynamics, then they might — or should — put a moratorium on distributed generation until they make the investment to handle the new operating mode,” he said.

Connors noted, though, that there are solutions to these issues.

“I can’t believe ‘no more photovoltaics — ever’ is their answer,” he said. Adding control systems to allow turning off the solar systems at certain times could help, as could investments in electricity storage connected to the island grid to absorb short-term surpluses of power.

In proposing the ban on new solar installations, HECO recommended forming a study group to pinpoint exactly where the potential grid problems would occur and how best to address them. Opponents of the ban say the issues are far enough away that such an effort can be carried out while continuing to install new systems.

“This is far too important a problem as far as the climate crisis we’re facing, the energy crisis we’re facing, for them to backburner this issue and study it to death,” Moriwake said.

Pai, of HECO, did not have an estimate for how long the study group would take to come to any specific conclusions or solutions.

Aside from setting back the pace of clean energy adoption in Hawaii, limiting new installations would have the additional effect of putting many solar technology companies in the state out of business, said Robert Harris, of the Sierra Club’s Hawaii chapter. Harris said the subsequent decision to back off the proposed ban by HECO could be considered a victory, but the issue is not forgotten easily.

“I think, whenever you make such a strong statement, one that literally could kill the renewable industry here in Hawaii, it is not the type of statement you make lightly,” he said.

“You have this wonderful movement, I think we’ve adopted some of the strongest renewable energy standards in the U.S., and then you have something like this, and it can really pull the rug out from under all we’ve accomplished.”

Utilities Taking Up the Fight

Duda, of the Hawaiian Solar Energy Association, said he sees the HECO moves as part of a larger trend of utility companies around the U.S. starting to fight against distributed power generation, which is “gnawing into rate base all over the country.”

“I think what’s going on is utilities all over the place are figuring out that they need to fight this, and they’re stumbling in various ways and with varying degrees of effectiveness into that battle,” he said.

Harris of the Sierra Club agreed.

“I generally have heard that this is kind of a consistent problem. I don’t think that anyone has done it as bluntly or, frankly, as badly as our utility did,” he said.

There have been varying attempts by utilities to fight the economic threat of privately owned distributed power.

Some are pushing to own the distributed power sources themselves. Los Angeles’ municipal utility, the Los Angeles Department of Water and Power, tried to push through a ballot measure last year calling for 400 MW of rooftop solar — which it would own and install at ratepayer expense; the measure was defeated as opponents argued that privately owned solar would do the same thing, and do it cheaper.

In North Carolina, where state law will require utilities to get 12.5 percent of their power from renewable sources by 2021, Duke Energy is piloting a project in which it would also own the solar equipment and power and would lease the rooftops, starting with four corporate roofs this year.

APS, Arizona’s largest utility, proposed a similar pilot last year in Flagstaff, offering a partially reduced rate on electricity for homes and businesses that opted in. This week, the Arizona Corporation Commission approved an APS plan to install 100 MW of solar photovoltaics over the next four years, paid for by ratepayers, which the utility will own.

A bill in the Arizona legislature could have slowed solar’s expansion in the state, but the governor announced last week that it would be withdrawn. In 2009, the state Legislature passed a strong standard requiring utilities to produce 25 percent of their power from renewable sources. The bill would have redefined nuclear power as a renewable source; notably, APS already gets more than 25 percent of its total power from a nuclear facility, making any new solar or wind installations unnecessary. The original standard would have been basically rendered meaningless.

HECO’s effort in Hawaii does seem more direct in comparison, and the backlash it created pushed for the quick response and has maybe drawn enough attention to keep the utility from forcing its goals further.

“All we can gather from this is an underlying, deep-seated bias against distributed renewables,” Moriwake said. “There is no other way to make sense of this except that. We’re hoping that’s not the case, because this is one of the few success stories — if not the only success story — we have in Hawaii right now, as far as renewables.”


See also:

China’s Trina Solar Bets on America’s Thriving Photovoltaics Market

Start-Ups Rise to Push Solar on College Campuses

IBM Breakthrough Could Deliver Low-Cost Efficient Solar


(Photo: 28685147@N04/ / CC BY-NC-ND 2.0)