The eagerness of Hawaii ratepayers to
reduce their electric bills has been a powerful motivator. State and federal policies lowering the costs of photovoltaic panels and a program to rebate customers for excess energy they produce has fueled rapid growth in the renewable energy industry’s rooftop solar sector.
Now, the state wants to turn off that fuel line — perhaps prematurely. And this is happening precisely when Hawaii is contemplating the sale of its largest utility to the Florida-based NextEra Energy Inc. — a company that has a stated preference for keeping energy production more centralized.
There are admittedly technological hurdles along Hawaii’s path toward its ambitious 100 percent green energy goal. But better energy policy planning is what’s needed to drive the innovation that can overcome those barriers.
Star-Advertiser writer Kathryn Mykleseth reported last week about the Public Utilities Commission’s quiet decision to cap the number of new rooftop solar installations connected to the Hawaiian Electric Industries grid. That call was made to spur better diversification of the state’s renewable-energy portfolio, officials said.
The commission announced it will cap new residential and commercial solar projects at 25 megawatts, which will be met when about 4,500 new systems are installed on Oahu.
Projections vary widely on when that cap will be reached.
The solar industry projects that its 115 companies will hit that ceiling as early as March 2016, given that there is now a firm limit set by the commission.
PUC Chairman Randy Iwase said that what he described as an “initial” cap will be revisited 18 months from now.
The commission has yet to make a broadly persuasive case that its analysis of solar-energy risks to the grid — based on assessments from HEI and its own staff — is correct.
Paired with the shrinking state incentives and the looming expiration of the federal tax credit at the end of 2016, the cap is likely to cause business to dry up for even the more successful companies — a distressing development for the industry’s 2,200 employees.
Richard Wallsgrove, program director at the nonprofit advocacy group Blue Planet Foundation, has said there is room on the grid well beyond the cap. Everyone seems to agree that the solution lies in faster deployment of energy storage capacity for the grid.
Battery storage, long described as a kind of “holy grail” for those favoring solar energy expansion, is the technical limitation here. Solving that, Wallsgrove correctly urged, should be the focus of state policy.
And that’s going to involve a more affirmative approach than simply imposing a PV cap with little advance notice.
The development of Hawaii’s rooftop solar sector is the result of such an affirmative program.
State tax incentives were implemented, a necessary step to drum up enough business to support the industry through its fledgling years.
Now those training wheels are being removed; they were never meant to be permanent.
But nothing similar has happened to incentivize the development of more economical battery storage, or to offset the price of systems for purchases now.
Lawmakers should look at such a program when they convene in January.
For their part, it’s time for out-of-the-box thinking by the companies themselves to find ways to finance battery-storage acquisition to put them within reach of more customers. This could include more options for leasing the battery systems, an approach that is gaining traction nationally.
Assuredly, the PUC has been juggling myriad radical changes. Formal hearings on the docket to approve NextEra’s purchase begin Monday. The credit paid to new PV system owners routing their excess energy to the grid has been adjusted downward, which was needed to share grid costs more fairly among those who can afford those systems and those who can’t.
Other green-energy sources do exist, and pursuing a diverse portfolio for the state, as Iwase explained, is one objective.
But it’s not the only one. The PUC must press for modernization of the grid to be one that can handle multiple energy producers more nimbly. The commission twice has ordered HEI to revise its business model more aggressively.
A too-sudden cap on rooftop solar hookups to the grid, without adequate battery storage options available, will unnecessarily hobble the industry the state sought to build through its energy policies.
That makes no sense. More innovation is crucial to prod the industry to adapt, but the state must offer it the carrot as well as the stick.
