by NICHOLA GROOM, Reuters, via Chicago Tribune, December 16, 2013
A view of houses with solar panels in the Mililani neighbourhood on the island of Oahu in Mililani, Hawaii
Photo: Hugh Gentry, Reuters
Source: www.chicagotribune.com
(Reuters) – When Gloria Adams signed a contract to install a rooftop solar power system on her Oahu home in late August, she looked forward to lower electric bills and a return on her investment in the years ahead.
She never dreamed that she would have to stop the project, get the Hawaiian Electric Company’s permission before she could proceed, and possibly help pay for any upgrades to her neighborhood’s electricity circuits to handle the extra load.
Her home improvement ran afoul of a rule that went into effect in September.
The regulation requires homeowners on Oahu – Hawaii’s most populous island – to get the utility’s approval before installing photovoltaic (PV) rooftop solar systems.
In areas like Mililani, where Adams lives, the utility’s power circuits have reached a threshold where it would be dangerous to add PV systems without investing in upgrades to the distribution system.
“We didn’t anticipate having to pay HECO when we took this on,” Adams said. “They are acting like they got caught with their pants down, saying, ‘We don’t know how to deal with this.’”
What’s happening in Hawaii is a sign of battles to come in the rest of the United States, solar industry and electric utility executives said. The conflict is the latest variation on what was a controversial issue this year in top solar markets California and Arizona. It was a hot topic at a solar industry conference last week: how to foster the growth of rooftop solar power while easing the concerns of regulated utilities that see its rise as a threat.
The Oahu rule created a dispute between the island’s solar power companies and Hawaiian Electric.
Charles Wang, co-owner of Hawaii ECO Project, a small solar company, told a conference in California last week that the clouds over Oahu’s rooftop solar growth foreshadow conflicts between the solar power industry and regulated utilities on the U.S. mainland.
“I am from the future,” Wang told solar executives gathered for the U.S. Solar Market Insight Conference in a packed hotel ballroom in San Diego. He said he was there to tell “a cautionary tale” about the difficulties of fighting a monolithic utility.
Since the Oahu rule went into effect three months ago, it has hurt business and “deflated the movement,” Wang said. The rule led to a 50 percent drop in business in this quarter at many solar installers, according to interviews with many in Hawaii’s solar industry.
Residential rooftop solar permits on Oahu are being issued at about half the rate they were just a few months ago, according to the City and County of Honolulu’s Department of Planning and Permitting.
That slide is an about-face for a state accustomed to more than doubling its solar installations every year since 2010. Hawaii’s percentage of homes with rooftop solar systems far surpasses that in any other state.
Safety and the power supply
Hawaiian Electric, an investor-owned utility, has serious concerns. The inconsistent power generated by so many rooftop solar systems threatens the safety and reliability of its small, independent power grids, a Hawaiian Electric executive said.
The utility, which must balance generation supplies with demand, has no control over the power flowing from the roughly 200 megawatts of rooftop systems on Oahu. Unlike large power projects that the utility owns and operates, there is no mechanism in place for the company to see how much electricity the rooftop PV systems are sending to the grid at any given moment.
“It’s almost like you have a 200 MW power plant … and you don’t know what it’s going to do,” Scott Seu, Hawaiian Electric’s vice president for energy resources and operations, said in an interview.
On cloudy days, for example, there are big swings in the amount of energy that photovoltaic solar systems generate. Those fluctuations are tougher to manage on a small grid that is entirely self-sufficient.
Seu compared the growth of rooftop PV in Hawaii to a rock that makes a small ripple when thrown in an ocean, but a large wave if tossed into a very small pond.
The risk is that rapid voltage spikes could damage home appliances or worse – injure crews working on the distribution circuit.
“This is not about the electric company trying to put barriers in front of people,” Seu said.
Hawaiian Electric, serving Oahu, is a subsidiary of Hawaiian Electric Industries, which owns two other utilities supplying power to other Hawaiian islands.
To solve the problem, both the utility and the solar industry are looking at better monitoring and forecasting tools as well as adding battery storage to the grid. More advanced inverters, which convert a solar system’s electrical output into a current that can be fed into the grid and can be disconnected quickly from the distribution system, could provide better and faster control of a rooftop solar system’s output.
Although Hawaii’s problems are specific to the way its small independent power grids work, the issue offers a window into the challenges other states may face as they bring more and more rooftop solar onto their grids.
“I see us as really the Petri dish out here in Hawaii,” said Leslie Cole-Brooks, executive director of the Hawaii Solar Energy Association. “Everyone is going to get to this point.”
She said that unlike in other parts of the country, the utility supports renewable energy and works “in good faith” on solutions. But she added that the solar industry feels unfairly blindsided by the abruptness of the recent rule change.
Power struggle in paradise
Hawaii, with its sunny weather and sky-high electricity rates, is one of the world’s best markets for solar power. The island state burns pricey fuel oil imported from Asia for most of its power generation. That means a homeowner who installs a PV rooftop solar system costing tens of thousands of dollars can see a payback several years sooner than in the rest of the country.
More dependent on fossil fuels for electricity than any other state, Hawaii has the most aggressive renewable energy target in the United States. It aims to generate 40 percent of its power from renewable energy sources by 2030. Only some of that will come from distributed solar. Utility-scale geothermal, wind and biomass projects, as well as large solar plants, will play a big part.
The recent tensions between Hawaiian Electric and the solar industry resembled high-stakes battles this year over a major solar incentive in California, Arizona and elsewhere. In those states, utilities argued that increasing numbers of homeowners going solar – and getting paid by the utility for the excess power their systems generate, under a policy known as net energy metering – will force ratepayers without solar systems to shoulder the cost of maintaining the power grid.
The solar industry fought back, saying utilities are afraid of losing market share to non-centralized, or distributed, power sources.
By year end, nearly 10 percent of Hawaiian Electric customers will generate their own electricity with solar panels, the utility said. That is far above the 1.4 percent of households in California, which has more solar installed than any other U.S. state.
At those levels, about a quarter of Hawaiian Electric’s neighborhood electricity circuits have reached a threshold that is dangerous to surpass without investing in upgrades to the distribution system. Customers who want to install solar in those areas now need to wait for safety and reliability studies to be performed. They ultimately would be required to pay for any upgrades needed to allow more solar.
On the other Hawaiian islands, customers have had to get approval before installing PV systems for awhile and it hasn’t been a problem. But the requirement caused resentment on Oahu, home to 75 percent of the state’s population and the island that has driven Hawaii’s solar boom.
The number of solar installers in Hawaii has soared to 300 from just a few dozen five years ago. Those businesses are scrambling to adjust to a reality that will cause the market to shrink in 2014 after years of super-charged growth, according to forecasts from GTM Research, which compiles data on the U.S. solar industry.
R&R Solar Supply, a 25-year-old distributor of solar panels to installers statewide, recently rented nine 40-foot (12-meter) containers to store panels meant to go on Hawaiian rooftops in the fourth quarter – typically the industry’s busiest time of year. Its Honolulu warehouse is “packed to the gills,” said Chief Executive Officer Rolf Christ, adding his panel business is down 50 percent.
(Reporting by Nichola Groom in Los Angeles and San Diego; Additional reporting by Malia Mattoch McManus in Honolulu; Editing by Frances Kerry and Jan Paschal)