Solar Applications in Limbo

Sixty-five applications for rooftop solar on Molokai currently remain in limbo at the hands of Maui Electric Company (MECO), according to company Communications Director Kau`i Awai-Dickson.

Most rooftop solar panels in the state are installed under a program called Net Energy Metering (NEM), which pays customers the retail electric rate for excess energy generated from their panels.

At 51 percent, Molokai has the highest percentage in Hawaii of rooftop solar compared to the island’s peak demand.

“Hawaii leads the nation as far as rooftop [solar], and Molokai leads the state,” said Mat McNeff, MECO manager of engineering, at a meeting on Molokai last month.

However, with that high percentage comes challenges for the island’s small electric grid. And those challenges are holding up the solar applications of Molokai residents who want to install photovoltaic (PV) panels on their roofs. McNeff said because the high volume of solar generation on Molokai could cause fluctuations in electric frequency resulting in potential island-wide power outages, MECO is no longer able to accept new rooftop photovoltaic (PV) systems under the NEM program.

“Right now, the [Public Utilities] Commission has said NEM will continue but not at the expense of system reliability,” said McNeff last month. “So that being the case, we have a reliability issue here on Molokai, and … there’s a technical issue on Molokai that we need to address.”

Matt Yamashita, an independent solar sales representative on Molokai, said the challenges and delays could result in the loss of jobs for those in the island’s solar industry within a couple of months.

“Sadly, the shutdown of solar net [energy] metering on Molokai is putting many residents out of work and prevents others from experiencing the savings that come with producing their own renewable energy,” he said, via email.

Denials or Delays

The utility company filed an application in January with the Public Utilities Commission (PUC) to end the NEM program. Last month, PUC chairperson and the president of Hawaiian Electric signed an agreement on Feb. 27 stating that NEM applications will continue to be approved in Hawaii, except “where that project does not affect circuit or system level security of reliability.”

MECO officials said at a Molokai meeting last month that currently, the entire island falls under that exception category.

“We’re not saying we can’t take any more photovoltaic, we just can’t take it under the Net Energy Metering program because some of the rules and restrictions that exist don’t allow us to control the systems,” said McNeff at the Molokai meeting.

The control he refers to was proposed under the utility’s Transitional Distributed Generation program, filed in a PUC application on Jan. 20. It would allow MECO to control the excess electricity generated through PV. McNeff said the normal period of peak PV generation is between 1 and 3 p.m. During those hours, the utility would be able to limit the amount of solar entering the grid, if MECO’s proposal is approved. The current NEM program doesn’t allow that type of energy regulation, which would help stabilize the flow of excess PV energy and ensure more system reliability, according to MECO.

Whether or not MECO will approve NEM applications on Molokai remains unclear.

“We continue to accept and review applications for net energy metering on Molokai and are following the process we agreed to with the PUC,” said Awai-Dickson, via email. “The high levels of photovoltaic penetration on Molokai’s small system have created concerns about the stability of the island grid. We are reviewing applications in light of these circumstances and will consult with the PUC before taking any actions to address these service reliability concerns.”

The Feb. 27 agreement states that letters of the utility’s denial or delay for rooftop PV systems must first be submitted to the PUC.

As of last Friday, Deborah Kwan, PUC chief of consumer affairs and compliance, said none have been received.

“We haven’t received any letters from MECO denying applications on Molokai to my knowledge,” she said.

She also pointed out that the Feb. 27 agreement is just that – an agreement – and is not a legally binding order from the PUC.

As far as the pending Molokai applications, their fate remains unclear.

“Maui Electric has not denied any applications for Molokai,” said Awai-Dickson. “We have 65 recent applications for which we informed customers that we will be following up with them as soon as possible regarding the status of their application.”

Molokai Mana`o

For Yamashita, the outlook is grim.

“The economic impact to our island is significant,” he said via email, referring to the apparent closure of the NEM program. “The solar industry has created many jobs on Molokai and, through monthly household savings for hundreds of solar customers, allows tens of thousands of dollars to remain in our local economy…”

At last month’s meeting, McNeff gave a presentation sharing a graph that showed how Molokai’s high PV levels are causing challenges unique to our grid.

“Maui has an electric usage pretty typical of other Hawaiian islands,” said McNeff. “The minimum for people using power is usually around 3 in the morning. People are sleeping, there’s not a lot going on. The peak usually occurs around 8 p.m. People come home, they start cooking, they take a shower, and that’s usually when people have the largest usage.”

The line graph for Molokai, however, is inverted.

“On Molokai, the lowest usage is during the middle of the day, and that is a result of the high installed capacity of PV on the island… atypical of a typical Hawaii usage,” explained McNeff.

He then showed how the dashed line representing solar generation dips below the minimum operating level of the diesel generators, as well as the electric frequency needed to maintain reliable service.

“This slide illustrates that we can’t take any more PV that doesn’t have controls on it,” said McNeff. 

Molokai residents responded to the presentation with grunts of irony and words of honesty.

Bev Furgeson, an east Molokai resident with solar under NEM, said the program not only made economic sense for them at the time, but they felt good about generating more energy than they used to give back to the island.

“We waited, saved up for it, had to wait and we love it,” she said. “We felt that we were doing something positive for the community… now I want to apologize for actually being a burden on the system… I feel offended, frankly.”

MECO President Sharon Suzuki responded, saying offending customers was not the company’s intention.

“I do want to apologize and it was certainly not meant to be offensive, and we do appreciate you investing in PV systems…. We all share the goal of a clean energy future, not just on Molokai but in Maui County and in Hawaii,” she said.

Suzuki added that the agreements for all existing NEM customers will be honored moving forward.

The Options

For those interested in installing PV on Molokai now, the options are slim.

In a Feb. 20 NEM denial letter to a Molokai customer, MECO suggested a program called the Standard Interconnection Agreement (SIA) as an alternative means to obtain rooftop solar.

However, the SIA doesn’t offer the same financial benefits to customers as NEM.

Under SIA, residents don’t get paid for excess energy generated from their rooftop solar panels the way they do with an NEM agreement.

“Under SIA, you have to rethink that,” said McNeff. “There isn’t a provision to get paid for excess – you want to either make it lower than your max usage [install fewer panels than your electric demand] or maybe install a battery on the side to store the excess.”

Yamashita said it’s a bad deal for most people.

“It seems to me the SIA is just you’re paying us less and selling it back for a lot more,” one meeting attendee told MECO.

Molokai electric customer Walter Mendes was frustrated that prior to Jan. 20, when MECO filed the PUC application to end NEM and determined that Molokai could no longer accept NEM applications, no notice was given to customers.

That was around the time Mendes said he took off his old solar panels.

“This was the first solar system in the state – had three of them, two on Oahu and one on Molokai,” he said. “I figured I’d sign up [for an updated system], and in irony, mine was one denied… So now I’m stuck here because I’m denied.”

Suzuki apologized to Mendes but said MECO had a duty to let the PUC know as soon as the challenges on Molokai became apparent, and acted as soon as possible.

“The reason we had to raise this… [is] we have an obligation under our franchise to provide reliable power to all customers who want it,” she said. “We take that very seriously… I apologize to those in the holding pattern now.”

Suzuki said the company wants to collaborate with those in the solar industry working on Molokai, like Yamashita, to come up with solutions.

“I really, really hope you guys can figure out the best solutions for our community and solutions that also allow MECO to continue to survive and be a part of our community…” said Yamashita. “My grandfather helped build this power plant when there was nothing… and my father was also a manager here.”

He explained that with the dropping cost of battery storage systems that allow customers to go off the grid, many are looking seriously into those options.

“We were looking at [those options] today because our guys, they’re going to be out of work in two months,” said Yamashita last month. “[Customers are] going to say, ‘let’s go off-grid,’ because it makes more sense economically. I’m not saying that’s a great solution, because it’s going to hurt you guys [MECO], and what my grandfather helped build is going to fail one day if that’s the road we gotta go down.”

An Electrifying Future

Looking forward, MECO officials say the company is developing a plan to carry them forward through 2030, including the highly contested proposed merger with Florida-based company NextEra.

McNeff said next year, MECO plans to roll out a smart grid program, which will update the system and give customers more power to control their own electric usage. McNeff said smart meters would provide earlier detection of power outages and incorporate automation into the grid to more quickly stabilize the system.

In 2018, McNeff said they have plans for a 10 megawatt (MW) battery to be installed on the island, which would assist with grid stability, as well as an 8 MW centralized solar system for Molokai, he added.

The same year, the company will convert half of its generation units on Molokai from diesel to liquefied natural gas (LNG), which could offer potential cost savings that would be passed on to customers, said McNeff. The other half of the generators would be converted to biofuel in 2023, according to the plan.

“By that time, we would have little to no diesel use on Molokai,” said McNeff.

He added that the company also plans to expand PV.

“Overall, we plan to triple the amount of PV in 2013 by 2030,” he said, or 3.2 MW of distributed PV by 2030. “So far we have 1.6 MW installed already and another roughly 1 MW pre-approved to be installed so we’re actually ahead of schedule as far as our forecast.”

Some meeting attendees expressed great concern about the environmental ramifications of LNG, including fracking policies and carbon dioxide emission involved in its production. They wondered if the cost of conversion is worthwhile, when it’s considered a “bridge” fuel for short-term use until other alternatives become more readily available.

Some of those questions may be able to be answered at a joint open house held with MECO and NextEra this week, on Thursday, April 9. The event, with staff from both companies available to meet residents, will take place at Kaunakakai Elementary School Cafeteria from 5 to 8 p.m.

The PUC’s Kwan said before the Commission makes a decision on the proposed merger, PUC listening sessions will be held on every island, though a schedule has not yet been set.

In the meantime, Molokai residents remain frustrated as dozens of PV applications await a response.

“Maui Electric and Hawaiian Electric are initiating additional studies for Molokai to determine how best to address the stability and service reliability issues caused by the high levels of PV on Molokai’s small electrical grid,” said Awai-Dickson last week.  “We are in the process of scheduling meetings with solar contractors on Molokai and are looking into testing non-export/smart-export technologies which could help better support the system.”

She gave no timeframe on the pending applications.