Large-Scale Solar Moves Forward

A solar array built by Half Moon Ventures at another location. Photo courtesy of HMV.

A large-scale solar and battery storage project on Molokai has moved one step closer to reality after an agreement was reached between Maui Electric and Molokai New Energy Partners, a division of Chicago-based renewable energy company Half Moon Ventures. The 2.7-megawatt project would supply 41 percent of the island’s electricity usage. It consists of 37 acres of solar panels on industrial land near Maui Electric’s Pala`au Power Plant and a three megawatt battery energy storage system. If all goes as planned, the project is anticipated to in service by the end of 2019, and would operate under a 22-year contract.

Under the agreement, Maui Electric would buy power from Molokai New Energy Partners (MNEP), which will build and own the infrastructure. To move forward, the deal still needs to be approved by the Public Utilities Commission (PUC).

“This agreement is an important step as we continue to work with the Molokai community in reaching 100 percent renewable energy for the island,” said Sharon Suzuki, president of Maui Electric. “As part of these efforts, our goal is to always look for lower prices for clean energy that will benefit all of our customers over the life of our contracts.”

The project has been in discussion for several years, originally proposed as a pumped hydro system. Most recently, Half Moon Ventures (HMV) held a meeting to share their plans with the Molokai community last October. One of residents’ main questions was whether the project would lower their electric bills.

“The project would provide savings to the island’s 3,200 customers every year of the life of the 22-year contract,” stated a Maui Electric press release last week. “The project would provide energy from its solar array and battery at a rate of about 17 cents per kilowatt hour (kWh), less than the present cost of diesel generation.”

Though the hope for the project is that it will lower customers’ bills, neither Maui Electric nor HMV could guarantee it.

Charles Magolske, MNEP team leader, said currently, about 50 percent of Maui Electric bills are services charges — or the cost of maintaining the electric grid — while the other 50 percent is generation costs, largely fuel. When the cost of oil goes up, so do electric bills. According to HMV, for every $10 per barrel of oil increase, the rate per kWh increase by $0.022. Magolske said energy generated by the project will be a couple pennies per kWh cheaper than the recent diesel generation costs, and significantly cheaper if the price of oil rises — so it would help prevent future bill increases due to fuel cost hikes.

The project will be funded by HMV with the help of federal New Markets Tax Credit provided by Punawai `O Pu`uhonua, a Hawaii-based community development entity that administers the tax credits to support the creation of jobs, goods and services in lower-income communities throughout the state.

“We’re grateful to support the community of Molokai, Maui Electric and Molokai New Energy Partners with an allocation of New Markets Tax Credits for this project,” said Pono Shim, manager of Punawai `O Pu`uhonua. “We’re also excited to be a partnership that recognizes the privilege of being in the Molokai community.”

Shim attended HMV’s October meeting on Molokai to gauge community interest in the project and said he wouldn’t consider funding it if it didn’t have the community’s support.

“I, as a community member, don’t want to see us lose this project,” said resident Matt Yamashita in October. “I don’t want to get kicked to the back of the line because we’re not ready for this. We are ready for this.”

Yamashita said he’s been following the development of the project when HMV first came to Molokai as Princeton Energy several years ago.

“They got grilled pretty hard, but they came back and worked really hard [make changes to their proposal] based on community feedback,” he said.

“The investment is for our younger generation, that’s the benefit,” said homesteader Bob Danner at the October meeting. “Move our energy supply in the direction that we want to see for our children. It’s awesome to see. It’s a perfect storm. If we don’t see the benefit, I guarantee our children will, or the lack of it if we fail to do anything.”

Maui Electric says the project is one step towards improving the reliability of Molokai’s electric grid as well as reaching its goal of 100 percent renewable energy for the island.

“In recent years, Molokai’s small island grid has seen one of the highest amounts of solar penetration in the state, raising issues of system reliability,” stated the Maui Electric press release. “The Molokai New Energy Partners’ proposed battery system has the potential to store the energy produced from the project’s solar array and discharge it during peak demand periods, such as the early evening hours, or when needed.”

Though the project will supplement, not eliminate, the island’s diesel generators, Magolske called it “huge step” for getting off diesel fuel. HMV has said it intends to use local labor and source locally for installation of the project when possible, while long term, the project will be staffed by several local residents.

In addition to lowering energy costs, some Molokai residents are lobbying for community ownership of the project. At the October meeting, Maui Electric’s Mahina Martin said those options could be considered.

“Community ownership is always a healthy conversation to have, but it cannot be guaranteed,” she said, adding that a buy-out option would have to be negotiated.

Emillia Noordhoek of local nonprofit Sust`aina ble Molokai said she feels more transparency is needed regarding what the project will truly bring to the community, and said it’s important for residents to be invested in the process.

“A more exact definition of community-owned renewable energy or community energy refers to projects where a community group initiates, develops, operates and/or benefits from a renewable energy resource or energy efficiency initiative,” she said, via email. “There are many innovative models we can use for a more fairer distribution of the benefits from our clean energy transition. However, it needs to come from a process that has broad participation from the community of Molokai.”

In hopes of further exploring community ownership of energy, Noordhoek is organizing a gathering of international community leaders who who have achieved shared energy ownership in their small, rural communities. The Feb. 19 meeting is open to the public, and Noordhoek said she hopes it will inspire Molokai residents to further explore the options and unify their energy goals.

Separate from the proposed renewable energy project with MNEP, Maui Electric has filed for a rate increase with the PUC, which held a rate hearing on Molokai last week. The company is requested a 9.26 percent increase in revenues, or $30,062,000, to “help recover the necessary investments to continue to maintain and modernize its electrical infrastructure, provide responsive and reliable customer service and support the integration of higher levels of renewable energy.”

To provide comments to the PUC on the MNEP solar project or Maui Electric’s rate increase, visit puc.hawaii.gov/contact/public-comments/ or mail them to:

State of Hawaii
Public Utilities Commission
465 South King Street, Room 103
Honolulu, Hawaii 96813