Albert Einstein was certainly known for having a bright idea or two. Arguably, one of his brightest ideas, the Photoelectric Effect, not only shed light on the electrifying nature of solar energy, but it also earned him the Nobel Prize in Physics in 1921. For those of us who didn't fare too well in high school physics, the Photoelectric Effect describes the process in which light shines onto a piece of metal, thereby emitting a small current of electricity, which then flows through the metal. Decades later, Einstein's illuminating theory of light energy has not only intrigued generations of science geeks, but it has also paved the way for a burgeoning solar industry; an industry that strives to revolutionize the way we use power and wean an oil-thirsty nation off of imported fossil fuels in the process.
For a sun-drenched state like Hawai'i, power generated from rooftop photovoltaic (PV) systems sounds like a logical solution to a very expensive problem, especially since Hawai'i has earned itself the dubious distinction of having the highest electricity rates in the nation. Not to mention, the state also relies on imported oil for more than 90 percent of its energy needsÜa percentage that causes environmentalists and economists alike to cringe. But while the advent of solar may seem like a welcome remedy to Hawai'i's energy woes, the state has yet to fully embrace PV as a renewable energy source. This hesitation has led many to believe that the state's utility, Hawaiian Electric Company (HECO), parent company of Maui Electric Company (MECO), is muddling efforts to allow more renewable energy distributed generation from PV systems, as well as wind-generated energy, to connect to its electric grid.
If you talk to Inter-Island Solar Supply President Rick Reed, you'll find yourself face-to-face with a "Solar Guru," as he has tracked Hawai'i's solar industry since it emerged in the early 1970s. According to Reed, around 2008, the industry gained popularity (at the same time the price of oil reached $147 a barrel), which led to a barrage of regulatory issues. "The development of the industry was relatively uniform until caps became an issue," he explains. "Now it's become a very complicated issue."
When net metering, the way most residential and small commercial solar systems tie into the grid, was first allowed in 2001, there were only two grid-interconnected PV systems on Maui. In 2008, there were 135 systems installed and in 2009, 298 systems were installed. By the end of 2009, Maui had 581 grid-interconnected PV systems, accounting for 4 MW of generation, or 2.5 percent of the island's power generation.
Citing potential grid reliability concerns for the ever-increasing amount of distributed generated energy coming into the grid, MECO set an annual cap of net-metered PV systems in Maui County, despite PV's increasing popularity. Once the annual cap of distributed energy has been met, permits to install new net-meter PV systems cannot be issued. In December 2008, the cap on net-metered systems was increased from 1 to 3 percent. In 2010, the demand to expand the cap on net-metered installations resulted in an increase to 4 percent, which allowed installations of net-metered systems to continue for the duration of the year. However, there is no guarantee that the cap increase will advance after the clock strikes midnight on December 31, 2010 and many believe that the 4 percent limit will be reached sometime in 2011.
On Maui, MECO has identified four "high saturation" distributed generation areas on its gridsÜwhich includes the densely populated areas of Lahaina, Ka'anapali, Kahului and PukalaniÜand contends that the overall grid may be getting "full" or "nearly full." As a result, the utility company says it is uncertain how much more customer-sited intermittent renewable energy it can accept onto the grid without disrupting its ability to reliably provide power to its customers.
"Generators have to run twenty-four-seven, so the utility has to use baseload power, because people still want cold beer and hot showers," says Reed. "The real debate is that the utility could use less of its baseload power and more intermittent renewablesÜas much as the grid could handle without causing chaos."
In Hawai'i, baseload power refers to a certain percentage of power generated by the large, diesel-fired generators that run constantly and can be adjusted by a utility system operator to meet increases or decreases in the demand for power on the grid. When it comes to solar, if the systems are small, they should have little or no measurable effect on the grid. With high rates of distribution, if its cloudy on one part of the island, its likely sunny somewhere else. But larger solar farms can create up to a 50 percent power loss in a matter of minutes due to clouding or a system failure. For the utilities sake, a high concentration of small PV distributed systems should be stabilizing to the grid, while larger solar farms can lead to grid fluctuations.
Although HECO has made the assumption that there is the potential for chaos, Reed says there is no definitive evidence to support that interconnection will impact grid reliability or stability. Meanwhile, PV installers, such as Maui's Rising Sun Solar & Electric and HNU Energy, are suffering the consequences of these restrictions, as the total number of PV systems only recently reached a 15 percent distribution circuit limit. These cap limits have forced MECO to tell many of its customers that they could not install any additional PV systemsÜa huge disappointment for solar customers.
Adding fuel to the proverbial fire, in February, HECO announced it had asked the state Public Utilities Commission (PUC) to impose a moratorium on PV installations throughout the state until it could determine howÜor ifÜthese systems would impact the reliability of its electric grids. Not surprisingly, this announcement was met by a collective gasp from businesses and residents across the state and within days, the company retracted its announcement, issuing an apology for causing "unnecessary and unintended alarm among PV developers" and assuring its plans to address "reliability concerns... while continuing without interruption to accept more renewable electricity from customer-sited PV systems."
Mark Duda, President of the Hawai'i Solar Energy Association and a principal in Distributed Energy Partners LLC, says MECO has failed to recognize a changing power dynamic. "The HECO Companies have traditionally taken positions at odds with the rapid deployment of distributed generation," he says, "We are now at the point where enough homeowners and businesses who are aware of the benefits of solar energy are demanding access to the grid."
Duda thinks the utility will eventually shift its policy, but it may take consumer action to facilitate change. "It's a policy-driven issue, but it's really about public interest. The utility is now up against not only homeowners and business owners, but also both labor unions and financiers from the capital markets so the usual 'either, or' rules don't apply." In addition, Duda warns that these grid access limitations could jeopardize Maui County'sÜand all of Hawai'i'sÜfledgling green workforce. "Most green jobs in Hawai'i today are in solar hot water and PV," he says. "Slowing the growth of the distributed generation will definitely have a negative effect on employment in the renewable sector."
Most importantly, such restrictions imposed by the utility limit a consumer's right to choose to install a PV system on his or her home or business. Reed agrees that this is one point that is often overlooked. "If people decide they want grid access, there should be no impediment to that," he says. "They should be able to get the best system they can, but just because you have sun, doesn°t necessarily mean you have a solar industry."
According to HECO, a compromise may soon be on the table. In a statement issued on February 26, 2010 HECO Executive Vice President Robbie Alm promised, "We are continuing to interconnect photovoltaic systems on all islands [and] we have a commitment to meet Hawai'i's 70 percent clean energy goal, so it is also in our best interest to ensure we can install as much renewable energy from all sources including solar as quickly as possible." He also said HECO's filing with the PUC was not meant as an immediate stop to solar instillations, but instead a signal that the industry and utility need to move promptly to address the issues of grid access to avoid future tough choices.
"We are committed to working promptly and openly with the solar developers and with other technical experts to address the potential reliability issue," said Alm. "What we are saying to the solar industry is, 'Let's get to work and together let's solve this.'"
If the offer is on the table, Duda is ready to negotiate. "The solar industry has been and continues to be ready to work with the utility," he says. "We are reasonable people and we would like to see HECO come meaningfully to the table so we can all move ahead."
Hawai'i's solar industry and HECO have already agreed to increase the distributed generation circuit limit from 10 to 15 percent statewide and the net metering limit from 3 to 4 percent on Maui and the Big Island. What does this mean for solar-hungry residents? According to Rising Sun Solar & Electric Founder Brad Albert, "For some time, maybe a year, Hawai'i residents will continue to have the opportunity to install PV systems, but the larger issues of how much intermittent, what type of renewable and who gets to do what and where, will continue to be debated in the PUC proceedings."
"It won't happen overnight," admitted Rick Reed. "Is solar the perfect solution? We might not know for sure until years from now, but you can't let waiting for that to get in the way of accomplishing something now." Given the price of imported oilÜand not just in terms of dollarsÜimmediate action is imperative, says Reed. "We need to get in the game now. There's nowhere to go but up."