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 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.
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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)
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