HECO seeks state’s OK to revive 2 solar farms
Hawaiian Electric Co. has submitted plans to state regulators to revive two utility-scale solar farms.
The electrical utility said Tuesday it reached power purchase agreements for two of three solar farms with the facilities’ new owner, after terminating the contracts for the projects last year. HECO is still negotiating an agreement for the third farm but said all three projects are expected to come online in 2019.
Alan Oshima, Hawaiian Electric president and CEO, said in a statement the deal with the new owner of the projects, NRG Energy Inc., was “an important step forward” for Oahu to reach the state’s goal of achieving 100 percent renewable energy dependence by 2045.
The three solar projects combined will have the capacity to power more than 17,974 homes at peak, with a total of 109.6 megawatts of solar generation.
In February HECO backed out of its contract with Maryland Heights, Mo.-based SunEdison Inc. for the three utility-scale solar facilities, which were approved by the state Public Utilities Commission in July. NRG acquired the projects in November after SunEdison filed for bankruptcy in April.
HECO applied to buy the solar power produced by the 14.7-megawatt Lanikuhana Solar plant from NRG at 11.4 cents per kilowatt-hour. The utility applied to purchase power from the 45.9-MW Waipio Solar plant at 10.4 cents per kWh. The PUC’s approval is required for the projects to move forward.
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SunEdison’s facilities would have sold solar power to HECO for 13.5 cents a kilowatt-hour for the duration of their 22-year life spans.
NRG and Hawaiian Electric are still negotiating the power purchase agreement for the 49-MW Kawailoa Solar facility.
HECO said the prices depend on the project qualifying for a state tax credit. Hawaii offers a 35 percent tax credit off the total cost of the solar system. It is capped at $500,000 for every commercial system.
7 responses to “HECO seeks state’s OK to revive 2 solar farms”
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looks like heco was right on this. good job
cholo like.
I hope someone can help me understand what is the difference between getting power from “Solar PV Farms” and individual roof top solar PV systems feeding into the grid besides HECO making money off of one. I always hear that the individual roof top PV has to stop because the grid can’t handle the number of units. To be me there is not much difference of getting power between the two. Someone from HECO please explain.
first let cholo correct you on a common misconception. heco does not make money nor loses money off of any resold electricity. the customer bears that burden or benefit (as it is in most cases) as the cost is simply passed on intact. so if the going rate of electricity is 26 cents per kWh it would be advantageous for all customers that heco purchase power significantly cheaper than that. 10.4 cents and 11.4 cents per kWh is awesome and helps to lower the overall going rate.
now when heco buys excess electricity from those pv owners who have NEM agreements they resell that electricity the very same way like with any other IPP. if the going rate is 26 cents then they purchase that excess power for 26 cents (in the form of credits). then it is resold to everyone else at 26 cents. it’s to no one’s benefit but the pv owners with NEM agreements. this keeps the going rate for electricity high. excess pv power from NEM customers is the most expensive electricity fed into the grid other than what heco directly produces. the only time heco profits from this is when NEM customers produced so much excess electricity that they couldn’t use all of their credits before they expired.
as far as why heco favors solar pv farms rather than customer rooftop pv that is one big reason. solar pv farms benefit the majority of customers by lowering the going rate since solar farms produce far cheaper electricity, less than half of what customer rooftop pv costs which do nothing to lower the going rate. otherwise heco has more direct control over generation and transmission of electricity from solar farms compared to customer rooftop pv where that gets pretty technically involved.
cholo hopes this has helped you.
Cholo try. Cholo miss. One big cholo omission is not mentioning PPA. Its all about the money. I know solar industry folks who have now retired, after less than 10 years of solar projects, on the revenue stream they designed for the next 20+ years, with the PPA projects they have signed. Nice if you can get it.
http://www.forbes.com/sites/jamesconca/2015/07/30/which-is-cheaper-rooftop-solar-or-utility-scale-solar/#1b1b93e74f6d
It’s economies of scale… with a larger array you can afford the batteries for the system. The bigger batteries are much cheaper because they’re more efficient. IIRC the main reason is that the materials for the bigger batteries are cheaper and more rugged.
The farm would also help rather than hinder the instability problem because it can respond faster than a fossil fuel plant.
This is a good decision.
Surprised that the PUC is getting it right.