A growing number of Hawaiian Electric Co. customers who want to install electricity-generating solar panels on their homes and businesses are being forced to scrap their plans because they are located in areas where high penetration of existing photovoltaic systems means they could be required to pay for an expensive study before connecting to the grid.

HECO, like many electric utilities in the United States, has set a 15 percent threshold for the amount of solar power that can be put on a single circuit during peak load before flags are raised regarding grid stability. In Hawaii, which has the highest per capita amount of solar energy linked to the power grid, that threshold is being reached far more frequently than in other areas.

High levels of customer-generated solar power on the grid can be problematic for utilities because the generation systems are outside their control, and the source of the energy — the sun — fluctuates with cloud cover. Those factors can potentially upset the balance between electricity production and consumption that is needed to keep the grid operating smoothly.

Once the 15 percent level is reached on Oahu, Maui, Hawaii island, Molokai and Lanai, customers of HECO and its subsidiary utilities can be required to conduct an expensive study before installing solar panels.

Some solar companies say just the possibility of having to undertake such a study, which can run from several thousand dollars for a small residential system to $16,000 or more for a larger commercial projects, is enough to keep some customers from ever approaching HECO to start the process.

The purpose of the study is to determine whether the solar project can be safely hooked up without adversely affecting other customers on the circuit. The 15 percent threshold was set by Public Utility Commission in what is know as its "Rule 14H." The PUC increased the threshold in May 2010 to 15 percent from 10 percent.

HECO says the threshold is not an absolute cap and that the final decision on whether a study will be needed depends on the size of the solar system being proposed and the characteristics of other solar systems on the same circuit.

Still, customers — especially large customers — can be put off if a study is required under Rule 14H.

"Roughly half of our potential commercial projects end up throttled by Rule 14H," said Todd Georgopapadakos, principal with Hono­lulu-based RevoluSun. "The most common response to running into the specter of triggering a … study is for the customer to give up on their ambitions for renewable energy," he said.

"The 15 percent threshold is the single largest impediment we face in our mission to be a catalyst in the state’s transition from fossil fuels to renewable energy," Georgopapadakos added.

Solar installations have soared in recent years in Honolulu, Maui and Hawaii counties, where HECO and its subsidiaries operate the power grids.

In the first half of this year, solar installations nearly matched what was done in all of 2010, itself a record year.

There were 7,114 kilowatts of generating capacity installed on Oahu and linked to the HECO grid through the first six months of 2011. That nearly equaled the 7,286 kilowatts installed in 2010. And the 2010 total was up sharply from the 2,849 kilowatts installed in 2009.

The highest solar penetration in the areas served by HECO companies is on Hawaii island, where 23 of the 140 circuits have passed the 15 percent threshold for distributed generation. On Oahu 15 of the 465 circuits are affected, and on Maui that’s the case for four of the island’s 128 circuits. On Molokai two of the five circuits have hit 15 percent, and on Lanai one of three circuits has passed the threshold.

To date, only a handful of the studies required by Rule 14H have been done on each of the islands that the HECO companies serve, according to the utility. Ten such studies are in progress on Hawaii island, five are in progress on Oahu and two have been requested but not yet started on Maui. HECO does not track how many customers decline to pursue a solar project after they are told they will have to conduct a study.

One solar installer on Hawaii island said the HECO subsidiary there, Hawaii Electric Light Co., has not shown any flexibility when it comes to new installations on circuits that are already at the 15 percent level.

"I’m seeing more circuit capacity checks from HELCO coming back with the following kind of language: ‘Due to the high distributed generation-to-load ration on the feeder, an interconnection requirement study is required for this system,’" said Marco Manglesdorf, president of ProVision Solar Inc.

HECO said it is simply trying to ensure grid stability as the utility absorbs more solar energy generating capacity.

"Hawaiian Electric’s goal is to ensure that PV (photovoltaic) installations can continue at their record pace while keeping service reliable for all of our customers. This is why a technical review — this is not a limit or a cap — may be needed when the amount of intermittent PV power on a neighborhood circuit reaches 15 percent," said Peter Rosegg, HECO spokes­man.

"The purpose is to determine if any steps must be taken to ensure service remains reliable for all customers on that circuit when adding more solar," he said. "This is consistent with California’s standard and is approved by the Public Utilities Commission. We want to add more solar and keep service reliable at the same time."

Hoku Solar, a Honolulu-based company that designs and installs mostly commercial and utility-scale PV systems, said many of its projects trigger Rule 14H studies because of their large size.

"We feel like we’ve been able to work collaboratively with HECO to resolve their concerns with respect to the interconnection of these PV systems," said Jerrod Schreck, Hoku Solar president. "And in certain cases we’ve been able to avoid the requirement of an interconnection study just by working collaboratively and openly with the utility," said Schreck, who also is chief strategy officer of Hoku Corp., the parent of Hoku Solar.

There is possible relief on the horizon for solar installers who feel restricted by the 15 percent threshold.

The PUC, along with HECO and solar industry representatives, is working on changes to Rule 14H that could lessen the impact of the "overly conservative" 15 percent threshold, said Brad Alpert, president of the Hawaii PV Coalition.

"Under the proposal the utility and the industry are working on a new process that would enable us to fast-track projects and bring more PV online," he said.