Remember when renewable energy was expensive and solar energy only worked when the sun was shining? That was so last decade. Recent solar projects across the state are showing us that our resilient clean energy future is arriving faster and at lower cost than anyone expected.
Earlier this month, Hawaiian Electric announced contracts for seven large solar and battery projects at record low prices, proving it is possible to generate clean electricity far cheaper than from fossil fuels. These projects, distributed across three islands, will boost our total installed solar capacity by nearly 30 percent, propelling us toward the state’s goal of 100 percent renewable electricity.
It is hard to overstate the significance of these projects, which are currently pending approval at the Public Utilities Commission (PUC). First, the power from these projects will be as low as 8 cents per kilowatt-hour (kWh), with most coming in below 10 cents per kWh.
Even the highest-priced project is substantially lower than the 15 cents per kWh average cost to produce electricity from fossil fuels.
It’s incredible to think that, just a few years ago, Hawaii was entertaining importing liquefied natural gas — another fossil fuel — which at the time was expected to generate electricity for 15 to 20 cents per kWh. When it comes to the cost of electricity, clean energy has emerged as the hands-down winner.
Second, these projects aren’t just for solar energy; they are for solar plus batteries, which can store a large amount of the energy generated for a number of hours until that energy is needed on the grid — even if it’s not needed until after the sun goes down.
Kauai led the way by being the first to deploy this technology at a large scale, and now over half of that island’s energy comes from renewable sources. The multi-hour energy storage provides the utility the flexibility to use the renewable energy exactly when customers require it — not just when the sun supplies it.
What’s particularly exciting is that these solar and battery projects are priced at less than half the cost forecasted for these technologies just a couple of years ago. We can reach our clean energy future faster and at lower cost than we previously imagined.
While robust competition and falling technology costs help explain these lower prices, they do not tell the full story. Behind the scenes, the cumbersome process of bidding and contracting for solar projects in Hawaii has improved. At the urging of Blue Planet Foundation and other clean energy allies, the PUC and Hawaiian Electric have simplified the steps for new projects, and removed unnecessary risks that the previous process placed on solar developers.
The most significant of these was the “curtailment risk” — a substantial cost risk that solar developers face if clean solar capacity, once built, is wasted because the utility “curtails” or doesn’t use the solar facility during sunny times, choosing instead to get electricity from other power plants. The reduction in curtailment risk, combined with a more streamlined and transparent bidding process, is transforming the renewable energy landscape in Hawaii, to the benefit of ratepayers and the climate.
Of course, reaching our carbon-free future will require a portfolio of energy options in all shapes and sizes. While procuring low-cost large-scale solar, the utility must also continue to work to enable opportunities for more rooftop solar, community renewables and other clean energy projects.
The overwhelming threat of climate change forces us to make some tough choices. Fortunately, these low-cost solar projects prove that renewable energy isn’t one of them.
Jeff Mikulina is executive director and Kamal Kapadia is communications lead at Blue Planet Foundation, which works to accelerate Hawaii toward 100 percent clean energy.
