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Hawaii’s New Feed-In-Tariff For Solar PV Not Having Big Impact Yet

Reginald Norris's picture
, Clean Energy Experts

Prior to joining Clean Energy Experts, Reggie ran operations for the first completely carbon-neutral water company in the U.S., Nika Water Company that donates 100% of its profits to support...

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  • Jan 12, 2011

Recently, Hawaii adopted a feed-in-tariff to support the adoption of solar power in Hawaii. Already a leader in solar thermal, Hawaii is on the progressive edge in the U.S. with the adoption of its program. As a refresher, a feed-in-tarrif is essentially where your utility company has to pay you cash for the amount of energy your solar system produces above the amount you consume. Currently in Hawaii, participating utility companies (HECO, MECO and HELCO) are paying $0.218/kWh for solar panel systems that are less than or equal to 20 kilowatts (kW); and $0.189/kWh for solar panel systems that are greater than 20 kW and less than or equal to 500 kW. Hawaii has not set rates for systems that are greater than 500 kW just yet.

However, recently, a report by the program’s independent observer, Accion Group, a New Hampshire consulting firm, has shown that in the first months of the programs operation, it has generated very little in the way of new solar adoption. Of the total 80 megawatts allocated to the program among the three participating utilities (HECO, MECO and HELCO), only 2.6 megawatts of solar PV applications have been filed.

While the Accion Group does not ascribe blame as to the tepid performance of the feed-in-tariff program, the program’s critics have charged that the program is limited and offers unattractive prices. In fact, the World Future Council feed-in tariff grading system, gives Hawaii a “D” grade with 57 points. Much of this is due to the fact that Hawaii’s program is split into two tracks: systems less than and then greater than 20 megawatts. In addition, Hawaii’s program is not as robust as those programs that have seen huge success such as in Ontario.

Nevertheless, Hawaii’s Public Utility Commission ruled that despite concerns, the program should be launched without further delay to help Oahu solar companies and other solar companies in Hawaii. “The commission believes the better course is to proceed, learn from experience, and make any necessary changes and improvements upon the commission’s next opportunity to review the FIT program in two years,” the PUC said in its ruling on the program.


Geoffrey Styles's picture
Geoffrey Styles on Jan 13, 2011

The problem with all of these approaches comes down to who pays.  Under the utility rebates and buy-backs, it’s other ratepayers, including many who can’t afford to take advantage of these schemes themselves.  The more people that sign up, the bigger the cost and the bigger the burden of the regressive wealth transfer.  Having said that, I have a lot fewer objections to someone paying $0.20/kWh for solar-generated power in Hawaii or Arizona than the foolishness of paying $0.80/kWh in Ontario or some similarly unsunny place where that’s what it takes to make the economics work at current solar equipment costs. 

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