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Solar Gives Hawaii Utilities A Run For Their Money

At least 10 percent of Hawaiians are now using solar and the number is growing. In this photo, solar panels cover the roof of one of the hotel units at Paniolo Greens in Hawaii. (ShellVacationsHospitality/Flickr)

At least 10 percent of Hawaiians are now using solar and the number is growing. In this photo, solar panels cover the roof of one of the hotel units at Paniolo Greens in Hawaii. (ShellVacationsHospitality/Flickr)

Hawaii has lots of sunshine and also the highest electricity rates in the country. That makes the Hawaiian Islands an attractive place for solar energy.

At least 10 percent of Hawaiians are now using solar and the number is growing. But access to the electrical grid is proving to be problem in some cases. The utility company, which is tasked with connecting rooftop solar installations to their electric grid, has told some residents they can’t connect.

The utility is becoming concerned about solar customers who use little traditional electricity and therefore pay little for access to the grid.

Meantime, Hawaii and other states are grappling with how to convert residents to solar — and who will pay to connect it to the grid — the utilities, residents or the state.

Duane Shimogawa of Pacific Business News joins Here & Now’s Jeremy Hobson with details.

Interview Highlights: Duane Shimogawa

On why solar energy is so popular in Hawaii

“Number one, we have some of the highest electricity prices in the country, so automatically, people are looking at other ways to bring those prices down. The second thing is, it’s Hawaii — we’ve got a lot of sunshine throughout the year. And, you know, the third thing is help from the state and our policy makers who have created tax breaks and subsidies. And so you corral those three things together, and you’ve got the perfect storm, although, as you’ve noted, it has led to some issues, especially with integrating to our utilities grid here.”

On the energy savings by Hawaiians who switch to solar

“If you go solar, your bill will drop — you know, whether you have a several hundred dollar [electric] bill, or some bills are in the thousands of dollars range, depends how big of a family you have. The average bill after you go solar, though, is around $15-17, so even if your bill is about a hundred bucks a month, I mean, that’s quite a savings in itself.”

On how the grid infrastructure updates will get paid for

“It’s a tough dilemma, and I think our Public Utilities Commission is, you know, right in the middle of it, you know, in trying to make sure it’s fair. You know, it’s a process that is involved, all the stakeholders, so we can figure out a way, you know, a fair way for the grid improvements to be done. That’s something that we’re currently going through right now, and to, you know, who gets to pay for all those improvements. There are some costs that the utility does pass on to the customers, and just recently, they came out with a bill increase, and that’s specifically for renewable energy improvements, and so that’s starting to happen as well.”




It's HERE AND NOW. And if you drive south on Interstate 15 from Las Vegas, right after you cross the border into California, you will come across a huge solar plant. You can't miss it on a sunny day because it's so bright. It is the largest solar thermal project in the world and it was completed earlier this year. And it's one reason why energy analysts think what is already happening in Hawaii will soon happen in California and Arizona and perhaps the rest of the country.

Hawaii has by far the most residents who get their energy from rooftop solar panels. And the utility company there is struggling to deal with that because they say they'd have to make expensive upgrades to the grid to handle all the excess energy. Joining us to talk about this is Duane Shimogawa. He's the energy reporter for Pacific Business News. He's with us from Honolulu. Duane, aloha.

DUANE SHIMOGAWA: Aloha, how are you?

HOBSON: I'm doing well. And tell us first of all why solar is so much more popular in Hawaii than anywhere else in the country - already, we read, that about 10 percent of the residents there have rooftop solar panels.

SHIMOGAWA: You are correct. And there are several reasons, actually. Number one and first and foremost, we have some of the highest electricity prices in the country. So automatically, people are looking at other ways to bring those prices down. The second thing is it's Hawaii. We've got a lot of sunshine throughout the year.

And, you know, the third thing is that help from the states and our policymakers who have created tax breaks and subsidies. And so you corral those three things together and you've got the perfect storm. Although, as you've noted, it has led to some issues, especially with integrating into our utilities grid here.

HOBSON: And we'll get to that. But first of all, let's talk about the choice that consumers have. What kind of economic sense does it make to make to put solar panels on your roof as opposed to paying these high electricity rates? What's the financial difference?

SHIMOGAWA: Well, if you go solar, your bill will drop, you know, whether you have several hundred dollar bill to - some bills are in the thousands of dollars range, depends on how big of a family you have. The average bill after you go solar though is around $15 to $17. So even if your bill is about a hundred bucks a month, I mean, that's quite a savings in itself.

HOBSON: And for people who don't have solar panels on their roof in Hawaii or are not getting their electricity from solar - where are they getting it from? What's the other power source?

SHIMOGAWA: Just an oil fire generator. Yeah - imported oil, which, you know, we are an island state obviously, so we ship everything in, including oil. And besides solar it's just oil.

HOBSON: Well, how is the industry - the utility industry in Hawaii - responding to all of these residents going solar?

SHIMOGAWA: It is a pretty big challenge, number one. And a lot of the circuits - it's reaching capacity. The electricity circuits and the solar penetration levels are at astronomical levels because of all the solar that's been integrated.

And so now they're taking a look at these areas and looking at other technologies to increase the capacity. It has caused, you know, quite a stir in the community. You know, a lot of the solar companies feel that Hawaiian Electric is slowing this down, you know, for whatever reason.

And they mention the profits part - they're not profiting enough (laughing). And the utility is - is trying to do its best. I mean, it's - in a way, you know, you have to realize that the utility, you know, they have to find ways to integrate more. And you have to trust them that they will.

HOBSON: Although you've got people like the former Energy Secretary Steven Chu telling Forbes that the argument that more people coming onto the grid with their solar energy threatens stability, he calls that a BS argument.

SHIMOGAWA: Yeah, it got quite a reaction from, obviously, the utility as well here. And yeah, that is something where they realize - they're in a very interesting, you know, point in their future as well. They're - this has never been done before.

And so they're actually discovering new things and trying to find ways that no one else in the country is actually looking into. So this is kind of groundbreaking, where the rest of the country can maybe look at and learn from Hawaii and not make the same mistakes.

HOBSON: Well, and then the question becomes who should pay to upgrade the infrastructure so that they can integrate more people into the grid with their solar energy? And should that be the government? Should it be other customers of the utility? Or should it be the utility itself?

SHIMOGAWA: Yeah, it's a tough dilemma. And I think our Public Utilities Commission is, you know, right in the middle of it, you know, in trying to make sure it's fair. It's -you know, it's a process that everyone is involved - all the stakeholders.

So we can figure out a way, you know, a fair way for the grid improvements to be done. That's something that we're currently going through right now. And to - you know, who gets to pay for all of those improvements?

There are some costs that the utility does pass on to the customers. And just recently, they came out with, you know, a bill increase. And that's specifically for renewable energy improvements. And so that's starting to happen as well.

HOBSON: What is at stake for the utilities in all of this right now - because if you look at what Barclays is saying in its research - note it's saying that U.S. electric utilities in general are under a solar threat - that their businesses could completely change because of what's already happening in Hawaii and what they expect will soon happen in states across the United States.

SHIMOGAWA: Yeah, it is. The change is already happening. And I think the utility is becoming more of a kind of a provider of different types of services and renewable energies. And Richard Rosenblum, the head of our utility here, you know, made a little comment about how the Hawaiian Electric is becoming kind of like the Amazon, you know, of utilities just because of the way it's transforming, offering different types of services, different types of renewables.

And so people now have the choice, rather than just straight imported oil to, you know, like solar, like the other types of renewable energies like the battery storage systems we're - you know, we're about to get smart meters. So there's a lot of options out there besides just the imported oil.

HOBSON: But there's also the option to not go with the utility at all to make your own energy.

SHIMOGAWA: That's it. And that's the, you know, getting off the grid. That's the battery storage systems. That's the other types of technology that we don't even know about yet. But that is something that more and more people are starting to ask and realize that it can happen.

It's just - I think the biggest obstacle obviously is the cost. I mean, it's not cheap. And obviously, you know, a lot of people want to be connected to the grid just because - in case of their system going down - so there's a backup, right? So it's a huge dilemma. It's a very interesting time.

I think a lot of people here in the industry are very, I guess, excited, but in a way kind of worried as well because there's a lot of unknowns out there. And the utility here admits that as well.

HOBSON: Duane Shimogawa covers energy for Pacific Business News in Honolulu. Duane, thanks for joining us.

SHIMOGAWA: Thank you so much have a great day.

HOBSON: And we're going to continue this conversation tomorrow with an energy analyst who says this boost in solar power may end up increasing income inequality. But right now Meghna, already a lot of comments on our Facebook page about this.


Exactly. We asked whether people think solar is a big threat to utility companies. And Adam Brabont (ph) writes, I sure do hope so. Jonathan Maher (ph) also said that that shouldn't matter. It's called saving our planet and moving forward into the future. Well, you can weigh in at our Facebook page facebook.com/hereandnowradio or at our website hereandnow.org. You're listening to HERE AND NOW. Transcript provided by NPR, Copyright NPR.

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  • http://neilblanchard.blogspot.com/ Neil Blanchard

    Hawaii should move to ocean wave power generation systems. There are at least 3 companies around the world who make these – one is in New Jersey, one in Scotland, and the other is in the Netherlands.

    These use the vertical motion of ocean wave to generate electricity. They are not based on a new technology.

    • jonathanpulliam

      People are using those waves, blowhole.

      • http://neilblanchard.blogspot.com/ Neil Blanchard

        Wave power systems are quite productive, and surfers, etc. can still use ‘em.

        What does marine mammal’s breathing have to do with anything?

        • j o n a t h a n p u l l i a m

          Neil, your posts are incredibly stupid. You offer not a scintilla of evidence to back your craptacular ideas. “take advantage of geothermal”, you advise. That’s pretty dumb. If EVERYONE tapped into geothermal, we’d have more rapid earth core cooling, increased rate of loss of the magnetosphere, which is a likelier culprit to modern “global warming” than burning fossil fuels. It’s clear to me you flat out don’t know what you’re talking about. The amazing “go solar guy” who pretends the sun is somehow static. Dumb, dumb, dumb.

          • http://neilblanchard.blogspot.com/ Neil Blanchard

            Jonathan, you are showing your true self. I am sorry you are so bitter, and that you feel okay criticizing someone you don’t know.

            In case you hadn’t noticed, Hawaii is not like many other places – a bit more heat extracted from the molten rock won’t make a bit of difference.

            The sun will be around for approximately another 5 Billion years; at which point it will expand outward to about where Jupiter is. Until then, we can predict the general trend. It is a fusion reactor, all fueled up and pumping out the energy, transmitting it for free – and it is the single largest source of energy – that already supports all life everywhere, all the time. The moon orbiting the earth is the other major source of energy, and eventually, the ocean tides will dampen the earth’s oscillation (equal and opposite to the moon orbiting) – until the moon moves away from the earth too much to stay in orbit, and it flings away …

            Your proclamations of the actual cause of climate change are baseless. You are grasping at straws.

            The earth’s tectonic plates (you accept they exist, right?) will be affected by the melting ice caps and the warming oceans, too. This is because the mass of the ice caps presses the earth down under them, by a fair bit. Antarctica is being pressed down by almost 1/2 mile. Warmer water is less dense, and it will be spread out more (covering more land) so it will exert slightly less pressure on the earth under it, and this cannot help from changing the forces on the tectonic plates.

            Also, the mass of the ice caps, and large mountain ranges, affect the gravitational pull of those areas of the earth – and they raise the ocean level around them. This is why the oblate spheroid the spinning earth forms is “sagging” toward the southern hemisphere – Mount Chimborazo in Ecuador is actually closer to space/farther from the center of the earth than Mount Everest, because of the “extra” gravitational pull of the ice on Antarctica.


            Guess what? Once Antarctica’s ice melts (and it sure looks like it will – if we humans don’t use our big brains and stop burning fossil fuels!) – then not only will climate change raise the ocean level by hundreds of feet, it will change the shape of the earth, which will change the pressures on the tectonic plates – it will also affect spin of the earth and the orbit of the moon, too.

  • Pleiades

    Through a micro-hydro system, a wind turbine and a solar array I produce enough energy to energize five homes beside my home continuously. The TVA local energy provider is not at all happy that the my state energy commission is forcing them to buy power from me at the same rate they pay Duke Energy because of my capacity.

  • rmt_co

    My understanding is that in some areas of Hawaii the existing power distribution infrastructure is on the verge of being overtaxed when too much surplus solar power is being put on the grid. As a result, I believe that new solar installations may be prevented from tying into the grid in those areas where solar installations are already well built-out.

    • Robert Thomas

      I’m an electrical engineer who is NOT a power systems engineer. I, too, have read the lay description of this problem, it being described using words like “overloaded” and “overtaxed” and so on. I’m puzzled by this. I do understand particular technical aspects of equipment in use by the handful of friends (also engineers, as it happens) I have here in California who have installed rooftop solar collection at their homes.

      I am curious whether it’s really the inability of the utility to always switch a paying load to the solar collector owners that’s the problem, rather than a problem of connection fabric equipment, per se. This would seem a likely cause for comparatively small, isolated markets such as the Hawaiian islands.

      • rmt_co
        • Robert Thomas

          Thanks for the link. While I’m somewhat skeptical that the limitation of “daytime minimum load” is positively a limit on capacity for “neighborhood circuits” and not a reflection of economic imperatives, it seems likely that a proper course would be as this article describes, to recognize that each home’s line-facing inverter (electronics that, during periods when a home’s collector produces more energy than the home requires, feeds home-generated energy – converted to alternating current amperes – back to the local line) are well able to detect and ameliorate voltage spikes (within a fraction of a cycle).

          To a degree, these objections and concerns recall the Bell System’s prohibition of third-party connection equipment that ended in 1968, with FCC ruling 13 F.C.C.2d 420.

          • j o n a t h a n p u l l i a m

            Really, Robert, you and Neil ought to start a circus. There are deal-breakers with photovoltaic cells you appear to wish to conceal to wit:

            a.) Today’s most modern PV cells still requires more energy expenditure to manufacture the cell itself than the cell will ever return during its entire service life-span.

            b.) Today’s most advanced batteries, if widely or routinely used by our entire populace, amount to an environmental catastrophe of toxicity and pollutants. For every ton of lead in lead-acid batteries, for example, two tons of highly toxic lead is lost into the eco-system during the course of mining, ore transport, and smelting operations. Lithium cells use difficult to obtain rare earth lithium, not produced in the U.S., but only in remote, politically unstable areas of the world.

            c.) Inverters, batteries, and copper wiring which must be employed to have any pretense of a “24/7″ electricity-use capability are inordinately energy-intensive to manufacture, install, and maintain, and must routinely be secured against theft. Moreover, installation of these ancillary requirements remain too capital/energy intensive to be considered economically viable, and their maintenance is costly as well.

            d.) Just because President Obama is a contempible clown who throws cronyism-directed taxpayer largesse at big contributors like Solyndra pushing phony panaceas, doesn’t mean you have to be.

          • http://neilblanchard.blogspot.com/ Neil Blanchard

            You are misinformed on the energy overhead of PV panels. They create far more electricity in their lifetimes, than it takes to make them. It takes 2-3 years to reach that point, as I understand it.

            Lithium batteries are not usually toxic at all. Lead acid batteries are deadly, however, and we have been recycling them for years.

            Come back when you have something to contribute other than insults.

          • j o n a t h a n p u l l i a m

            “It takes 2-3 years to reach that point, as I understand it.”

            But that’s the problem, Neil, you DON’T understand it. You routinely parrot false claims of efficiency that are self evidently false, for if economizations were possible, they would already be the predominant alternative, which they most assuredly are not. You are not even a good propagandist.

          • http://neilblanchard.blogspot.com/ Neil Blanchard

            Solar PV is growing quite rapidly, thank you very much. I have a very good understanding of a lot of things. Solar photovoltaic panels are already the second lowest cost source of electricity; land based wind being the lowest.

            If we account for the total real costs of burning fossil fuels, they will be running a huge deficit. We will pay far more in money, health, and long term environmental damage – and people in the future will curse us.

  • Robert Thomas

    If individuals can economically collect a joule either for their own use or to sell to others, increasing numbers will do this.

    If the same individuals want to enjoy the security and convenience of connection to a common fabric, they’ll continue to pay to do that, though market forces may render that service increasingly expensive.

    My experience of Hawaii is that it’s lovely and that often, the weather is cloudy.

    • http://neilblanchard.blogspot.com/ Neil Blanchard

      Solar PV panels still produce power when it is cloudy, and even in the rain.

      We may have to rethink how we work our power grid. Private companies only make money when they generate the electricity, and they maintain the grid only so they can sell electricity. They are complaining because they no longer make as much money when solar PV systems are feeding into the grid – though they do save money because they do not have to fire up their peaker plants – because solar PV almost perfectly matches the highest demand, which is usually for A/C. Which is exactly when the output from solar PV is highest.

      Maybe, we need to go (back) to municipal utilities, that are not-for-profit? Then we all would share in the costs of the grid, and only those who don’t generate electricity pay for that.

      • Robert Thomas

        They sure do, but not as much. Less insolation means less generation. The figure of merit followed by the PV collector industry includes a goal of less than 1% loss of conversion efficiency at low insolation, not the ability. Collectors intended for frequently occluded locations may even exhibit increased efficiency at lower light levels. On a cloudy summer day, a typical collector will yield twenty to forty percent of it sunny-condition energy (something like that) with a much greater moment-to-moment variation in generation.

      • Robert Thomas

        Commercial power companies make money when rate payers pay their power bills. Utility commissions and their utility districts usually set rules for what utilities can charge for their generation costs and their services.

        My electric utility is Silicon Valley Power (formerly Santa Clara Power) which is a utility long owned by the municipality of Santa Clara, the third-largest city in Santa Clara Valley, after San Jose and Sunnyvale at a population of about 120,000. My electric rates have been consistently comfortably lower than my Sunnyvale neighbors = Pacific Gas & Electric customers mere yards from my home – for thirty-five years. I recommend the establishment of well-operated municipal electric utilities.

        Obviously, demand profile varies with region and with user type; my neighborhood’s highest usage is at early evening and lowest in the early morning and midmorning to midday. In order to ameliorate traffic congestion, efficiently use land and provide dwellings to sell for less than $1M, many homes here are stacked two to four high and occupy reduced solar “headprints”.

        It is folly to harbor fantasies that evil electric utilities will “finally get theirs”, and so on, due to the advent of distributed, user-owned energy generation. In the great majority of municipalities and neighborhoods, a reliable, functional power connection fabric will still be paid for because its services will continue to be demanded. Whether that business continues to have the same economic profile is another matter, of course. States, regions and municipalities and their utility regulators will, as you describe, have to accommodate this shift. I, for one, don’t know why all municipalities don’t operate their own electric utilities as many more do with their water and sewer districts.

  • Ray

    Here in the Intermountain West (Idaho/Utah) the utility companies in both states are fighting alternative energy sources primarily wind and solar. Both have tried or are trying assess a fee to the home solar providers who provide excess to the grid. In addition they are overtly and covertly fighting commercial wind generation. This while both are pro-coal. I don’t believe capacity of the grid is the issue as in Hawaii. In Idaho they try argue they shouldn’t have to subsidize home owner power generation regardless if that prevents their need to build additional traditional power plants. Seems to me in hot summer climates, having energy produced during the peak period of use(cooling/irrigation pumping) is what power companies need.

    • Robert Thomas

      If those who generate their own power have no use for the convenience and security of the distribution fabric, they can disconnect themselves from it. They may find that they pay for a portion of it’s maintenance indirectly, through taxes or fees or other charges and through the cost of goods they buy from sources that remain connected. Their particular burden will also depend on their utility district’s contracts with commercial providers. In my case, my electricity is provided by a municipally owned and operated utility, so that situation would be a little different.

      If individuals continue to want to enjoy the convenience and security I mention above, they should properly pay for the cost of operating and maintaining that service.

      It’s the new task of public utilities institutions to fairly and accurately assess the proportion of an electric utility’s costs associated with the extension and maintenance of the distribution fabric on the one hand and the cost of generation on the other hand and to fairly assign those costs to rate payers. Undoubtedly, commercial providers will advocate for their own best advantage.

      It’s useful to note that here in California (and likely, too, in some areas in the intermountain West), those who succeed in reducing their water usage nevertheless sometimes find themselves paying higher rates for water. Even when fairly and accurately accounted, a utility will need to charge according to both usage and its fixed costs.

  • surfcow

    Rural Northern PA has an ancient power gris, but they have been buying excess solar electricity from consumers for at least 20 years, probably longer.

  • Thinkfreeer

    If solar is so great, why do they need to be connected to commercial power lines?

    • L Coffman

      Photovoltaic solar panels produce DC electricity but unless a battery system is installed to store the energy, the power goes directly back into the grid. Battery storage adds cost to the system therefore most people prefer to remain tied into the power grid and get a credit for the solar energy they have produced.

    • 5man

      Given the technology’s current output per meter squared, solar PV is typically not able to provide all of a building’s energy needs. So staying tied to the grid is necessary. Batteries, once they come down in cost, could alleviate or avoid this problem, but we’re not there yet (except maybe for commercial buildings in Hawaii). Keep in mind that like semiconductors, yields on solar PV will only get better over time.

      Further, buildings rarely consume electricity consistently throughout the day (e.g. in the middle of the night, or when the building is vacant), so there will be times when the panels are generating more power than that which is used. So you will be generating excess power onsite. You want to monetize this extra power and the only way to do that is to remain connected to the grid (i.e., sell it back to the grid and receive a credit for future electricity purchases). Otherwise, it’s wasted money, which hurts your return on investment.

  • L Coffman

    It was not mentioned in your interview that the utility companies absorb the solar energy output by the homeowners thereby reducing the need to purchase or produce energy from other sources. One would think that the increase in residential and commercial solar would mitigate their energy production costs allowing them to fund necessary grid improvements. Perhaps I am oversimplifying this but the corruption during the Energy Crisis of 2000/2001 is still fresh in my mind.

  • Ray Boggs

    Hawaiisolar.com is what’s going to give the utilities in Hawaii a run for their money with their much lower system pricing.

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