A plan to install a system atop a HECO building is scuttled due to financial issues
POSTED: 01:30 a.m. HST, Jul 09, 2010
Hawaiian Electric Co. has canceled plans to install solar panels on the roof of its Ward Avenue facility because the company it contracted to do the project, Hoku Solar Inc., was unable to obtain the necessary financing.
The project had been on the drawing board since May 2007 when Hawaiian Electric agreed to have Hoku Solar install HECO's first utility-sited, large-scale photovoltaic project. Hoku was to have operated the system, selling the electricity to HECO.
The project was announced with some fanfare, billed as an example of HECO's response to public demand for solar power. However, the two sides agreed to pull the plug on the project when Hoku was unable to secure financing after receiving two consecutive six-month extensions from HECO.
The system originally was scheduled to be up and running on the roof of the Ward Avenue Archer substation by December 2008.
A Hoku spokesman said the company was unable to secure financing in the time allowed because of difficulty with terms and conditions specific to the HECO project along with a general shortage of credit following the financial market meltdown in the fall of 2008.
"In the end they decided to move on, although we were still trying to get financing," said Jerrod Schreck, chief strategy officer for Hoku Corp., the parent of Hoku Solar.
HECO notified the Public Utilities Commission last week of the decision to scuttle the project.
"Hawaiian Electric has decided not to rebid the Archer PV project at this time since the original project objectives can be achieved through various renewable energy project developments and procurement initiatives that are currently being pursued," HECO said in a letter to the PUC.
"Hawaiian Electric, will, however, continue to consider the potential deployment of renewable energy generation and integration technologies at Archer and other utility sites," the letter continued.
"Hawaiian Electric remains fully committed to renewable energy, including the development of ... PV projects."
Hoku and HECO had cleared several hurdles in the proposed project, including signing a purchase power agreement in May 2008 whereby HECO agreed to buy electricity from Hoku at a fixed rate of 19 cents per kilowatt-hour over a period of 20 years.
The generating capacity of the system would have ranged anywhere from 167 kilowatts to 300 kilowatts. At 167 kilowatts the system would have produced enough electricity to power the equivalent of 150 to 200 homes.
Hoku said adverse market conditions have not prevented it from completing other solar projects, including the installation of PV systems on the roofs at seven state airports. Hoku also recently signed a deal to install a PV system at the offices of Diagnostic Laboratory Services in Honolulu.