More consumers in sunny Hawaii are turning to solar panels to help curb their electrical costs
POSTED: 1:30 a.m. HST, Aug 22, 2010
LAST UPDATED: 2:37 a.m. HST, Aug 22, 2010
The same summertime sun that beats down on their St. Louis Heights home, driving up their air-conditioning bill, will soon be paying dividends for Glen Robinson and his family.
With their electrical bill shooting up from about $150 a month in the winter months to about $250-$300 in the summer, the Robinsons decided it was time to take the photovoltaic plunge.
The Robinsons are among a growing number of local homeowners and businesses taking advantage of Hawaii's nearly constant sunshine by using electricity-generating solar panels to power their homes.
The upfront costs to convert to PV are not cheap, roughly $26,000 to $35,000 for a system large enough to supply 600 kilowatt-hours per month — what Hawaiian Electric Co. considers typical usage for a Honolulu household. But with tax credits — 35 percent from the state and 30 percent from the federal government -- the price can be brought down to the point where a system can pay for itself in five to six years. The state tax credit has a cap of $5,000 a year, while the federal credit has none.
The combination of the islands' premium sunlight, high electricity prices and tax incentives make the payback period here among the shortest in the country.
That is a reality not lost on the Robinsons.
"We did our homework. A cost analysis showed that we would have a fairly quick payback," Robinson said. "We get really high sun exposure, and the AC is running continuously in the summer. It didn't seem right to be sending all our money to HECO."
TIME FOR SOME PAYBACKThe payback period for a photovoltaic system depends on several variables, including the cost of the system, the amount of sun received and the cost of electricity from the grid. The break-even point would be about 5 1/2 years under the following scenario:
» System size: A 4.7-kilowatt PV system, which would be sufficient to supply the electrical needs of a typical Oahu household using 600 kilowatt-hours a month.
The Robinsons' 7.4-kilowatt system was designed to provide electricity for two houses on the property, and consists of 32 panels producing 230 watts of electricity each.
Robinson said he also insulated both homes with expandable foam and painted the roof of his tenant's house with a reflective coating as part of his effort to cut his electricity bill.
At a little more than $8,000 per kilowatt installed, the Robinsons' project comes with a hefty price tag of about $60,000. But the state and federal tax breaks brought the cost down to about $21,000, an amount Robinson figures he can recover in five years by cutting the electric bill on his two homes.
Sunetric, which installed the system, said the Robinsons can conservatively expect to cut the monthly electrical bill for the two homes by $290 with the system.
Installation of photovoltaic systems has exploded in the past five years, providing a boost to the local solar industry that was previously limited largely to installing solar hot water systems.
A record of 7,300 kilowatts of photovoltaic power was installed in Hawaii last year, compared with just 167 kilowatts in 2005, according to the Hawaii Solar Energy Association. Installations are on track this year to easily surpass 2009, said Mark Duda, association president and one of the founders of Distributed Energy Partners.
Installations or planned installations on Oahu through this month totaled 4,650 kilowatts, up from 2,849 kilowatts for all of 2009, Duda said.
Food wholesaler Y. Hata is preparing to install a 600-kilowatt system on its Sand Island warehouse, the largest such project on Oahu this year.
The economics of photovoltaic power makes more sense in Hawaii than just about any place in the nation, Duda said.
The state gets high ratings for insolation, a measure of solar radiation used in the energy industry to determine the size of a solar collector that is required. Advanced Energy Group, a mainland energy consulting company, calculated Honolulu's average sun hours per day at 6.02. Besides Hawaii, most of the cities that were rated higher than 6 sun hours per day were in the Southwest. Phoenix, for example, was rated at 6.58 sun hours, while Chicago was rated at 3.15.
However, many photovoltaic installers in Hawaii use a more conservative estimate of sun hours when projecting how much electricity a PV panel will produce. Several companies use models assuming 5.2 sun hours a day.
"We have microclimates in Hawaii that you don't have in other places," said Alex Tiller, Sunetric's chief executive officer.
"In a place like Death Valley, you get more consistent solar output with less cloud cover. But our Leeward Coast is on par with any of those areas. In areas like the Windward side, it will be less."
The other part of the economic equation is Hawaii's electricity prices, which are consistently ranked as the highest in the country by the U.S. Energy Information Administration.
Those two factors mean a homeowner or business in Hawaii will recover the cost of their initial PV investment more quickly than in just about any other place in the nation. Installers emphasize that the variables involved in the equation make it difficult to come up with an average payback period. Most companies give a range, usually from four to seven years.
"It's a tricky equation," Tiller said. "Someone with one palm tree shading their panel will see a variance in their payback."
The boom in solar electricity generation in the past five years was driven by a confluence of factors, including the growth of tax incentives, rising oil prices, the state's Clean Energy Initiative and the availability of cheaper Chinese-made PV panels, Duda said.
"We definitely got a lot more interest when oil hit $147 a barrel," Duda said.
The increased demand for PV also has fueled a rapid expansion in companies doing installations, he said. Five years ago there were just a handful of companies in the business, and now there are more than 100, he said.
Last year the Legislature amended the rebate law to make the 35 percent tax credit refundable. As a result homeowners and businesses that do not have a tax liability can be reimbursed directly by the state.
"The ability to take state tax credit as a refundable credit is enormous," Duda said.