If things continue to progress at their current pace, more of Hawaii’s electric ratepayers soon will start to feel some warmth from the solar energy revolution, even if they own neither a roof nor a photovoltaic cell.
The timeline for the Community Based Renewable Energy (CBRE) project is uncertain. But the people at the helm seem confident that the doors to solar “subscribers” will start to open in a few months, not years.
Community solar, as it’s called less formally, is a way ratepayers can achieve some of the cost savings of PV installations without having their own private systems.
Instead, they share the electricity produced by a solar plant built elsewhere: Its generated power is sold to the utility, which then passes on a credit to the participant’s electric bill.
Renewable energy advocates are quick to point out that getting to this point has taken a three-year push, but all agree now that the prospects for the program look encouraging.
“Now we’re in a real partnership with the utility, which is great,” said Kyle Datta, general partner of Ulupono Initiative, an investment firm with renewable energy among its primary focus areas. It is one of the “joint parties,” including nonprofits such as Blue Planet Foundation, that have been involved in shaping the program.
Phase 1 of the CBRE program undertaken by Hawaiian Electric Companies is in progress, with a plan to produce 8 megawatts to start. The second phase is expected to add eight times that much power or more, although the final scope of the project will be reviewed by the state Public Utilities Commission and the agency’s Consumer Advocate after the test phase is done.
The utility won’t yet identify the applicants, but the pace of signups has been healthy, with projects proposed in sizes ranging from 200 kilowatts to 3 MW.
Kauai Island Utility Cooperative is separately owned and is not part of this project. Applications have come in from Oahu, Hawaii Island, Maui and Molokai — all the islands where HECO subsidiaries supply power, with the exception, so far, of Lanai.
There is no deadline for applications, said Shelee Kimura, the utility’s senior vice president, business development and strategy, so the hope is that at some point the full capacity of the phase can be achieved.
“I’m really excited about the way it’s rolling out,” Kimura said. “I think this is a really important game changer for the energy ecosystem.”
Already Oahu and Hawaii island are booked up with project plans that would exceed the islands’ current allotments of 5 MW and 1 MW, respectively, but Kimura said applications would continue, lining up backup plans.
This is a small launch, and the number of ratepayers to be accommodated will hinge on the business plans for the final projects. Power plants might be geared for a very limited number of large-scale power users, or for many smaller customers, Kimura said.
Right now HECO is reviewing the completion of the applications and then is conducting a technical review of each plan and its location, she said.
“We’re making sure that they’re going to meet the requirements of the program, which include that the systems be controllable,” Kimura added, a reference to the need for adjusting the amount of electricity to be funneled to the grid at any given time. “We need for the interconnection to be reliable, that at our side we have the right capacity on our line.”
This means that geography can come into play, as line capacity varies across the system, especially in more remote areas, she said.
When HECO initiated its plan, it proposed to handle the subscribers itself. But the final directive from the PUC was that the first phase must allow independent “subscriber organizations” to take the helm of the projects and control who would buy in and reap the credits on their electric bills.
In Phase 2, HECO will be able to do its own development, one that would be tailored largely for low- to moderate-income ratepayers. And in this phase, projects could include battery storage along with PV power generation.
But the basic mechanisms will be worked out on the small scale now. Here’s how it will work:
>> The subscriber, or customer, will buy a subscription from a subscriber organization handling a given project. This could be a one-time payment at the front end, or paid in increments, Kimura said.
She and others have taken pains to point out that subscribers are not “investors,” legally speaking, because then the deal would come under the review of the U.S. Securities and Exchange Commission and draw down a raft of federal regulations.
>> The subscriber organization — which could be anything from a business to a church or nonprofit — either develops the solar PV facility, or contracts that to a third party that would handle the financing and construction.
>> The organization signs a 20-year “interconnection agreement” with HECO.
>> The energy is delivered to HECO, with credit to the electric bill for each subscriber. The utility buys unsubscribed energy at the same bill-credit rate.
A simpler contrast
Crafting the agreement that organizations would sign with HECO presented a hurdle that ultimately was overcome, but only after the joint parties “made a bit of a fuss,” Datta said.
The original proposed standard contract, about 250 pages, was “dead on arrival,” said Will Giese, executive director of the Hawaii Solar Energy Association, because of its length and complexity, for starters.
“Also, it seemed to expose the subscriber organization to risk where it might not have needed to,” Giese said. “We needed to create a system and infrastructure for this program that will make the system successful.
“To HECO’s credit, they were amenable to suggestions, especially after PUC prodding,” he added.
The suggestion was to pattern the contract after one used for CBRE projects in Minnesota, which has a well-developed program, Datta said. That was closer to 20 pages in length.
Giese said thumbs-down reactions from within the industry started to turn upward when the revision was made. In the program as currently designed, each organization will have to enroll at least four subscribers, and no one subscriber can have access to more than 40 percent of the output, he said.
Isaac Moriwake, an attorney with Earthjustice, represented the solar association in those discussions.
“The joint parties went through this process to make the program easy to administer, easy to understand and allocated toward the people who needed the most,” Moriwake said.
An inclusive future
The joint parties also had hoped the initial phase could have been much larger, he said.
“That’s dipping a toe in the water,” he said. “Hopefully it gets us started, and we’ll be able to scale it up.”
Datta shares the general optimism that community solar will get off the ground, something prospective subscribers can look forward to. However, he underscored that ratepayers will need to shop around among whatever projects are delivered to ensure that they get the best deal.
He reminded them that they need to calculate their electricity savings only after factoring in what they paid for the subscription. Subscriber organizations will need to compete for their participation in the projects, Datta said.
Once the kinks are worked out in the system, look for it to expand to more of Hawaii’s renters, condo dwellers and lower-income households, said Melissa Miyashiro, chief of staff for Blue Planet.
“At the heart of the program is ensuring that nobody gets left behind on our journey to 100 percent clean energy,” Miyashiro said.