POSTED: 1:30 a.m. HST, Aug 14, 2011
After a slow start to a program allowing people to sell renewable energy to Hawaii's power grid, it's being revamped to attract more interest and reduce the state's dependence on imported oil.
Only a handful of solar power projects have gone online since the highly anticipated program started last November, causing the state Public Utilities Commission to consider solutions that would make the initiative more attractive to independent producers.
The program, called a feed-in tariff, sets standard rates at which businesses and residents can sell their power to the utility, Hawaiian Electric Co.
Renewable energy advocates said the program has been hindered because Hawaiian Electric isn't required to purchase power fed to the grid, and because the utility may request that a power developer complete an interconnectivity study costing tens of thousands of dollars.
Proposals for improving the feed-in tariff for large-scale projects up to 5 megawatts are due Sept. 6, and regulators would then consider the recommendations and possibly enact them later.
"It needs to have upfront obligations of the utility that they will interconnect systems and purchase all of the electricity produced by the systems," said Erik Kvam, CEO for Zero Emissions Leasing, a solar power developer. "No developer with any sense is going to go out and find investment money for a project when they don't have a commitment from the utility up front."
The program had a "tepid response" in its first five months, with only three projects launched in that time, according to an April report by Harold Judd of Accion Group, the independent observer overseeing the program. A few more projects have started since then.
But the feed-in tariff is picking up steam, said Hawaiian Electric spokesman Peter Rosegg. Seventy applications are pending for Oahu, which would produce 10.3 megawatts of electricity when installed, he said.
"We want to get the most possible customer-sited renewable energy on our system while maintaining reliability," Rosegg said.
One potential solution would preserve the utility's concerns about reliability while providing assurances to solar power developers that they would get paid.
Renewable power producers should be financially compensated when Hawaiian Electric decides it won't accept their power onto the grid, said Mike Champley, a consultant for Blue Planet Foundation, whose mission is to make Hawaii energy independent.
"Curtailment or the threat thereof is so overwhelming that it makes these projects basically unfinanceable. It causes uncertainty of the revenue stream," said Champley, a retired executive from Detroit utility DTE Energy who now lives on Maui. "If there were more certainty, one could plan or adjust accordingly."
Businesses need assurances that their renewable power will reach the grid before they make investments, said Doug Codiga, an energy and environmental lawyer representing Blue Planet.
"One of the terms you would expect from a feed-in tariff … is a very simple statement saying, ‘If you sign this contract, we will accept the power,'" Codiga said. "Curtailment is perhaps the most critical issue that is slowing the implementation of the feed-in tariff program in Hawaii."
A separate energy program aimed at smaller renewable power producers — such as homes and businesses with solar panels on their roofs — has met with much greater success, Rosegg said.
Net energy metering allows customers to subtract the amount of power they feed to the grid from their bills, but the system is limited to projects smaller than 100 kilowatts each.
About 3,600 net energy metering installations are generating more than 20 megawatts of electricity on Oahu, Rosegg said.