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Gridlocked by the power grid: Why Hawaii’s solar energy industry is at a crossroads

April 11, 2015 at 11:23 AM EDT
In some parts of Hawaii, where many homeowners have installed rooftop panels to capitalize on federal and state tax credits for using solar energy, the local utility company has slowed down approvals of new solar systems, saying that abundant users may threaten the safety and reliability of the power grid. As the popularity of rooftop solar spreads, many Americans could soon enter the same gridlock. NewsHour special correspondent Mike Taibbi reports.
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MIKE TAIBBI: They’re everywhere on Oahu: on the roofs of businesses, libraries, and one house after another.

The amount of rooftop solar now accounts for 12 percent of the electric utility’s users. That’s more than 20 times the national average. It’s by far the highest penetration of individual rooftop solar in the country.

But in this tropical state, where the combination of sky-high energy prices, abundant sunshine, and federal and state tax credits makes going solar a no-brainer, the very popularity of these panels has become a problem.

MIKE TAIBBI: So we drive up and you have these lovely solar panels on your roof. How’s that workin out for you?

CARLTON HO: It’s not!

MIKE TAIBBI: Not working out because by the time aircraft mechanic Carlton Ho joined the rooftop solar parade in September 2013, there were so many people in his area that had installed panels that the local utility company told him  ‘don’t turn on that switch yet.

MIKE TAIBBI: So it’s just a question of turning the switch on and you have juice.

CARLTON HO: Yeah.

MIKE TAIBBI: From your own roof.

CARLTON HO: And everything is awesome!

MIKE TAIBBI: But it’s not that simple.

When you install solar panels, you’re still reliant on the local utility. When it’s dark or when the sun isn’t shining, you need the grid to provide electricity.   Even so, solar customers have a fundamentally different relationship with the utility. Because when the sun is shining any extra energy their panels generate is supplied back to the grid. That earns a credit, further reducing their electric bill.

But in areas of Oahu, with so many homeowners going solar, the utility said the safety and reliability of the grid could be threatened and slowed to a crawl the approval of new systems.

COLTON CHING: We’ve made a lot of progress but we know there is still a lot to do as we increase rooftop solar.

MIKE TAIBBI: Colton Ching is Vice President for Energy Delivery at Hawaiian Electric Company or HECO as the utility is known.

COLTON CHING: What was happening was that power, which normally flows from the grid to our customers was now beginning to flow back into those substations. Substations which were not 30, 40 years ago designed to operate in that manner.

MIKE TAIBBI: In addition, HECO had a hard time measuring all that solar.

COLTON CHING:  Right now we don’t know exactly how much power rooftop solar is producing at any given moment.

MIKE TAIBBI: So you can’t see at all what 10 to 20 percent of your customer base is producing?

COLTON CHING: We cannot. We cannot see that.

MIKE TAIBBI: But while HECO studied the problem, homeowners like Carlton Ho were left waiting. It had been a year and a half that his system had sat unused.

MIKE TAIBBI: It’s got to be frustrating.

CARLTON HO:  Yes. Like you come home, you look at the panels on your ceiling nad you know you can’t do anything with it. The bill comes every month. You know you’ve got two bills because I still have my financing. I have to pay for that. I have my electric bills. So.

MIKE TAIBBI: Ho was left paying his regular electric bill: about $150 a month. Plus another $240 a month in payments for the $23,000 solar panels he’d bought but couldn’t use.

COLTON CHING: Hawaiian Electric needs to and has taken steps to work with our customers to find solutions that work for them and work for the grid. And we haven’t been perfect. It hasn’t been a perfectly smooth process.

MIKE TAIBBI: There have been some ugly moments, frankly.

COLTON CHING: There have been some very very tough moments. It’s been learning moments for us within the utility.

MIKE TAIBBI: And for the solar industry which took a big hit when the utility slowed new approvals: There were hundreds of layoffs and stockpiles of solar equipment.

But those solar customers waiting to turn on their systems or even get permission to start construction knew that going solar would still be a good deal— a system up and running would reduce their energy bills dramatically.

In the meantime, non-solar customers– still the majority– were paying much more to maintain the public grid than those with their own panels on the roof– a disparity HECO suggested could be unfair.

HECO PROMOTIONAL VIDEO: it makes sense that everyone who uses the grid should pay their share to maintain and improve it because everyone benefits from it.

MIKE TAIBBI: HECO says that non-solar customers have in a sense been subsidizing those with rooftop solar when it comes to keep the grid humming. A cost shift estimated at more than $50 million dollars.

All these problems – delays, questions about grid reliability, and fairness – could soon be seen all across the country as the penetration of rooftop solar continues to increase. Solar panels are no longer just for sunbelt states…even the White House had panels installed last May.

PRESIDENT BARACK OBAMA [MAY 2014] : Over the past few years, the cost of solar panels have fallen by 60 percent. Solar installations have increased by 500 percent.

MIKE TAIBBI: But rooftop solar on a massive scale has consequences still being measured.

MARCO MANGELSDORF: States on the mainland will eventually be having to deal with some of the issues that we’re dealing with here.

MIKE TAIBBI: Dr. Marco Mangelsdorf is a solar contractor who also teaches energy politics. Hawaii has been called a “postcard from the future” because of how much rooftop solar is already out here.

MARCO MANGELSDORF: We are on the new frontier in Hawaii as far as trying to come up with a practical, safe answer to a very, very difficult question which does not have a definitive answer.

MIKE TAIBBI: Namely, how much rooftop solar can the grid accomodate. And while delays for rooftop solar customers have angered many in Hawaii, Mangelsdorf argues that the caution shown by the utility is warranted.

MARCO MANGELSDORF: You cannot allow a free for all, anybody and everybody to connect to a utility grid without any type of requirements or monitoring. Just as you can’t have anybody and everybody get on a freeway with a bicycle with a horse, with a buggy, with a moped. I mean the utility grid is a public good, public infrastructure that must be maintained.

MIKE TAIBBI: But some say delays in approving rooftop solar are less about prudence and more about profit and about preserving the utility’s century old business model as a monopoly.

ROBERT HARRIS: The problem is that they inherently don’t want to see more of this rooftop solar, and yet they are also arbiters of what power can come on or what’s reliable and what’s safe.

MIKE TAIBBI: Robert Harris is director of public policy for SunRun, another solar contractor. He says utilities are cautious by nature, but that they can’t ignore the changing landscape around rooftop solar.

ROBERT HARRIS: The comparison would be, for example, the typewriter industry trying to stop computers because they want to preserve their own business model. And here you could argue that there’s a better model out there that’s going to be cheaper and cleaner. You know, we need to be working hard and trying to make that work better, not just trying to stop it.

MIKE TAIBBI: Did HECO fail in some fundamental way to see the future?

COLTON CHING: I don’t think we failed. I do, in hindsight, believe that we could have seen it sooner. We are undergoing a literal transformation process as we speak. It is this change in relationship, the change in the compact between the utility and its customers. It’s no longer the monopoly that’s making all of the decisions and passing it down to its customers.

MIKE TAIBBI: HECO has pledged to get approvals for rooftop solar moving again and hopes to triple the amount of rooftop solar by 2030.

But it may not be in a position to decide.

Last December, HECO announced it was being sold to NextEra, a Florida-based utility giant.

MIKE TAIBBI: If the deal with NextEra does go through, Hawaii’s electricity consumers will be serviced by a company that says it is committed to renewable energy sources. At this point, primarily utility-scale solar and wind installations.

That means big solar and wind farms, which today produce more renewable energy across the country than the small-scale rooftop systems that are so popular on Hawaii.   Still the old model though: a utility producing all the power, just using a different source, and selling it virtually as a monopoly. That is not the Hawaii way or at least the way many here have said they insist on going:  to have a choice.

CARLTON HO: Once we get this thing powered, yeah. A year and a half of frustration, we’ll get over it.

MIKE TAIBBI: For Carlton Ho and his family that day finally arrived after a year and a half of waiting, They got permission to turn that switch on last month and their solar system is now up and running.

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