The state Public Utilities Commission said Monday it denied three utility-scale solar projects on Oahu due to concerns about cost-effectiveness and the location of the facilities.

“We are looking ahead and the cost factor may drop,” PUC Chairman Randy Iwase said. “We have to be cautious with an eye at the future.”

In an order filed Friday, the PUC denied power purchasing agreements between Hawaiian Electric Co. and the three photovoltaic farms.

Iwase said the PUC was concerned that the proximity of some solar facilities could have an effect on the grid. He also said the 22-year term of the contracts could prevent cheaper solar projects from connecting in the future.

“What we don’t want is to fill up the whole grid with solar farms for the next 22 years with these solar prices when we’ll have projects that will come in far less than the 13.5-cents costs that were approved in these prices,” Iwase said.

The denied projects were by Hoohana Solar 1 LLC, SunE Waiawa Solar LLC and Ka La Nui Solar LLC. One of the companies, Ka La Nui Solar, is owned by NextEra Energy Inc., the company looking to purchase HECO’s parent company, Hawaiian Electric Industries.

The decision comes after the PUC announced earlier this month it approved the power purchase agreements for four utility-scale solar projects.

The four approved projects collectively could produce 137.2 megawatts of renewable energy, which at their peak could power more than 22,000 homes. The denied solar projects collectively could have produced 82.8 megawatts of renewable energy.

One major concern was the impact multiple solar projects in one area would have on the grid, Iwase said.

“You don’t want to put all of your solar farms in one location so that (the grid) is more susceptible to the weather,” Iwase said. “If there is a cloud now over the Central Oahu region but not over the Waianae region, the whole solar system doesn’t shut down.”

The locations of the denied facilities were Waipahu, Waiawa and Waianae.

The approved projects include EE Waianae Solar, to be built near Waianae High School; Kawailoa Solar, to be built in Haleiwa; Lanikuhana Solar, to be built southwest of Mililani; and Waiawa PV.

HECO contracted with several solar companies to build the projects and asked the PUC last year to waive the usual requirement for competitive bidding to speed up the approval process.

“We, of course, had hoped all would be approved,” HECO spokesman Darren Pai said. “In a thorough process, we carefully screened more than two dozen competitive proposals to negotiate contracts only with the best available. We ultimately negotiated contracts at unprecedented lower and stable pricing for Oahu. And we’ll keep working to secure a diverse portfolio of low-cost renewable resources and making the grid improvements needed to move to a 100 percent renewable energy future for Hawaii.”