Rooftop Solar in Oahu Crashes With Loss of Net Metering, Lack of Self-Supply Installs

The state of Hawaii's solar industry today shows what happens when a net energy metering program is abruptly removed.

NEM went into effect in Hawaii in 2001, paying rooftop solar owners the retail rate for power sent back to the grid. NEM was responsible for a stark increase in installed photovoltaic (and solar hot water) systems.

Solar penetration reached the unprecedented territory of 16 percent on some of Hawaii's islands. The market had essentially doubled every year from 2010 to 2013.   

But Hawaii’s energy provider, Hawaii Electric Industries (HEI), was struggling to cope with the growth in solar, claiming that its circuits couldn’t handle the increase in daytime solar production.

In October 2015, after contentious debate, the program was shut down. “This is necessary to ensure a smooth transition to a redesigned market-based structure for distributed resources in Hawaii, and the state’s commitment to meet a 100 [percent] renewable portfolio standard by 2050,” according to a filing. That 2050 target has since been moved up to 2040.

As GTM's Julia Pyper reported, the filing approved new “self-supply” and “grid-supply” tariffs for customers to interconnect distributed energy resources to HECO’s electric grids.

Under the self-supply option, PV customers with energy storage in areas of high PV penetration are eligible for an expedited review and approval of their systems. These customers are limited in the amount of electricity they can send back to the grid and do not receive any compensation for their solar power exports.

Under the grid-supply option, PV customers will be compensated at the wholesale rate for electricity exported to the grid. Wholesale prices range from roughly 15 cents per kilowatt-hour to 28 cents per kilowatt-hour, which is about half of the state's average retail electricity rates. To help cover fixed costs, residential PV customers connected to the grid will pay a minimum monthly bill of $25.

So how has that worked out?

Marco Mangelsdorf, president of ProVision Technologies and founder of the Hawaii PV Coalition, has regularly compiled permitting activity since 2012. “Last month the City and County of Honolulu Department of Planning and Permitting issued 194 PV permits, the [smallest] number in the past five years. Compared to January 2016, [that's] a drop of 52 percent,” said Mangelsdorf.

Source: Marco Mangelsdorf, president of ProVision Technologies

“Hawaii’s solar installers have already been forced to lay off thousands of workers because of a steep decline in permitted projects over the past two years,” he continued.

“We in [Hawaii's] solar electric industry are on the bleeding edge of what everyone else talks about in the abstract. NEM is gone. Interconnect agreements that allow for export of surplus PV power are gone, Mangelsdorf said. “Self-supply and battery storage are here and now, in our faces whether we’re ready or not. And we’re not ready, if the present and near-term likely adoption rate is any indication.”

It's understandable to want to look for a scapegoat in this situation, but according to Mangelsdorf, “There are no villains in this drama. Hawaii has an unprecedented amount of DG PV feeding into our isolated island grids,” he said. “There are limits to what today’s grids can accommodate, and no amount of wishful thinking or dreaming of disruptive smart grid technologies or spin and hype from battery peddlers can change that in the short term.”

“And for all the focus on self-supply being some kind of evolutionary end state, where residential energy storage changes the face of utilities as we know them, [that] doesn’t take into account an important fact: Self-supply systems are not without impacts on the grid,” Mangelsdorf added. “Even if surplus power does not feed back into the grid, more and more self-supply systems effectively reduce the daytime load firm generation needed for those impacted circuits, and there are limits as to just how low combustion generators can be ramped down.”

“We in the industry in the Aloha State are afraid,” he concluded.

from GTM Solar https://www.greentechmedia.com/articles/read/Rooftop-Solar-in-Hawaii-Crashes-With-Loss-of-Net-Metering-Lack-Self-Supply

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