Hawaii Solar Industry Enters Uncharted Territory

Hawaii Solar Industry

5-05-2015 Hawaii Solar Industry Enters Uncharted Territory

In Hawaii, 12% of the electric utility’s users have rooftop solar. That’s more than 20 times the national average. However, there is a growing number of concerns that come with such a high rate of rooftop solar users. The Hawaii solar industry, and especially the utility companies, face uncharted territory.

The Question of Grid Safety

Hawaiian Electric Company (HECO), the state’s largest utility, has kept thousands of customers from installing and activating rooftop solar systems.

The main concern, HECO says, is the grid. With so much solar power flowing into the grid, the utility company isn’t sure that the outdated infrastructure can handle it. HECO’s grid, like many others across the nations, was built for one-way energy transmission.

However, rooftop solar demands a two-way energy transfer, from the utility to the customer and from the customer to the utility. HECO has been striving to transform itself as a company and carry out these changes in its grid, but the process has been slow.

Solar Eats Into Profits

Another issue that HECO faces is that of profit. The Hawaii solar industry is booming, and with 12% of its customers using solar, HECO is losing about $50 million dollars a year. The utility company has to pay solar customers for any extra electricity they produce at the full rate.

The utility’s expenses for maintaining the grid haven’t decreased because solar customers still use the grid for storing excess energy and for electricity at night. To remedy this situation, HECO is proposing cutting its customer payout rates in half, but nothing has come of that proposal yet.

HECO and the Hawaii solar industry is navigating uncharted waters. Whether it likes it or not, the utility is a pioneer in the Hawaii solar industry. It’s facing problems that no other utility has had to face. Utilities nationwide will be watching HECO to see how it reacts to the growth of rooftop solar, and they’ll be taking notes.

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Why Are Hawaiians Going Solar?

Part of the problem that HECO faces could easily be solved if so many Hawaiians stopped going solar. However, it’s highly unlikely that Hawaiians are going to stop installing rooftop solar on their houses. It all comes down to economics.

Hawaiians may care about the environment, but they care about their wallets even more. Hawaiians are subject to some of the highest energy bills in the country. It’s not uncommon for a Hawaiian to pay $700 or $800 a month in energy bills during the summer.

Homeowners who have rooftop solar only pay a fraction of that amount. Sometimes, during the sunniest months, they don’t pay anything.

For many Hawaiians, solar is more about freeing themselves from the high prices of the utility than saving the planet.

The Future of the Hawaii Solar Industry

Utility companies nationwide will be watching the Hawaii solar industry very carefully over the next few months to see what happens. HECO could create a new, successful business model that other utilities might follow. It could also crash and burn, a warning to utilities not to follow in their footsteps.

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