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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.
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.”
JEREMY HOBSON, HOST:
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.
MEGHNA CHAKRABARTI, HOST:
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.