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Charting Hawaii's Spectacular Solar Energy Growth

Jeff St. John's picture
Greentech Media
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  • Feb 3, 2015

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Hawaii is officially a solar hot spot of national significance — and that makes it a fitting test bed for Department of Energy research meant to stretch the limits of rooftop PV penetration on island grids.

The U.S. Energy Information Administration (EIA) released a report on Hawaii’s solar status this week that lays out the state’s situation in graphic detail. Over the past five years, net-metered solar capacity has skyrocketed on the island of Oahu, and has grown significantly on the smaller, more constrained grids of Maui and the island of Hawaii (the “Big Island”).

Big wind farms and thousands of solar rooftops are changing the shape of Oahu’s energy supply-demand curve, in ways that threaten grid stability as well as the economics of generating most of its power with imported oil. DOE labs have been working with Hawaiian Electric, the company that runs utilities on Oahu, Maui, Molokai and Hawaii, to track these system effects, with results like these showing the telltale duck shape — or, as HECO has dubbed it, the “Nessie curve” — caused when midday solar exceeds demand, then drops off to leave the utility with steep ramps in demand to match with limited resources.

Hawaii faces local grid problems as well. On Oahu, solar penetration has increased to beyond daytime minimum load on many distribution grid circuits, meaning that there’s more solar power being generated than electricity consumed by customers on that section of the grid. That’s the problem that led HECO to slow down new permits last year — and prompted the Hawaii Public Utilities Commission to respond with a broad set of orders, demanding that the state’s primary utility make fundamental changes to how it manages distributed energy.

DOE’s National Renewable Energy Laboratory is helping out on this front by hosting tests of smart solar inverter capabilities with the Electric Power Research Institute and big third-party-solar provider SolarCity. That work led directly to HECO’s proposal this month to double the amount of solar it’s comfortable permitting on already-impacted circuits, from 120 percent to 250 percent of daytime minimum load, without causing grid-destabilizing voltage problems.

By easing the bottleneck on new solar projects, HECO also hopes to justify a concurrent plan to replace its lucrative net-metering tariff with a new set of credits that would pay roughly half as much for customer-generated power. But the implications of its fast-track move from R&D to policy proposal go beyond Hawaii’s shores. California has smart solar inverter pilot projects in the works, and utilities around the country are studying Hawaii to see what they might have to deal with if customer-owned solar starts to grow beyond their local distribution grid comfort zones. NextEra Energy, which is buying Hawaiian Electric Industries for $4.3 billion, will have to confront Hawaii’s solar situation head-on.

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Nathan Wilson's picture
Nathan Wilson on Feb 2, 2015

It is counter-intuitive, but the proposal to replace the Hawaiian solar net-metering system with a feed-in tarrif system is necessary to make big increases in the solar penetration on the islands.  Clearly it makes the whole system more economicaly scalable (for non-solar electricity customers and the utility), but as important, it provides an incentive to deploy batteries or other energy storage.

Specifically, under the existing system, customers on Oahu pay 31 ¢/kWh (according to this Greentech article about the proposed change).  That means that during the day, solar PV system owners sell excess power onto the grid for 31 ¢/kWh, then buy it back at night (from oil-fired generators) for the same 31 ¢/kWh, with no batteries involved.  Under the proposal, solar PV system owners could either sell excess daytime power into the grid for about 15 ¢/kWh, or store it themselves to avoid buying night time (oil-fired) power for 31 ¢/kWh.  Furthermore, the 31-15 ¢/kWh rate differential also provides a mechanism to pay for storage on the utility side of the meter (whether owned by the utility or by third parties), which could be dispatched in a way that reduces grid costs for everyone (i.e. by providing black-start capability, spinning reserves, and controlling ramp-rates to harden the grid against windpower and solar power fuctuations). 

Without the rate differential (whether it’s due to separate import & export tarrifs or time-of-use metering), there is simply no way to economically justify behind-the-meter batteries; and with net-metering, there is no-one who’s on-the-hook to pay for utility-side batteries.

So the change is good news for clean-energy (whether the PV vendors/installers like it not).

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