Thursday, October 22, 2015

Out of State Story on PUC's DER Order

Today's Utility Dive features a pretty comprehensive write-up of the Hawaii PUC's Distributed Energy Resources October 12 Decision & Order in Herman K. Trabish's article, "What comes after net metering: Hawaii's latest postcard from the future." 

While The Alliance for Solar Choice (TASC) yells foul and files a lawsuit, probably because its business model, third party ownership, is highly reliant on subsidization through net energy metering (NEM) and tax credits, other independent solar installers have a different view:

“It’s a good overall package of changes that needed to happen,” said Chris DeBone, Hawaii Energy Connection CEO and former president of the Hawaii Solar Energy Association. "Nobody likes change, but this is in the best interests of Hawaii.”
The technology advances driven by the new policies “will catalyze changes needed to get to 100% renewables,” DeBone added.
Also, while TASC is having a conniption fit, DeBone and Hawaii Island solar installer, Marco Mangelsdorf "independently agreed the new programs will not compromise the value proposition of a direct purchase of solar beyond viability. With NEM, they each said separately, the payback period has been between four and five years. Under the decision’s terms, the payback will be between six and seven years and will still attract buyers."

The article also sought comments from Hawaii economist, Dr. Makena Coffman:

The numbers show that people should still welcome the opportunity to install solar, said Makena Coffman, associate professor of urban and regional planning at the University of Hawaii Economic Research Organization.
Based on today’s Oahu electricity rate, an installed cost of $4/watt, an average 5 hours of daily sun, and a system life of 25 years, retail credit NEM would provide a “windfall” rate of return of 18%. Coffman calculated. “That is enormous.”
With the new grid credit, Coffman said the rate of return is between 7.5% and 9%, depending on the utility.
“That is still quite high,” the professor said. “My 401(k) is not getting 7.5%. Nobody’s is.”
The grid supply credit “is a much closer approximation of the value of the resource than the NEM credit was,” she added. “It is getting much closer to being a more efficient incentive system.”


  1. This comment has been removed by the author.

  2. Fascinating theater as the various players in the Hawaii renewable energy arena jockey for position, power and profit.

    Randy Iwase's comment on the TASC lawsuit and NEM is priceless: “We could’ve [ended it] as of September of last year, but we didn't’.”

    The PUC Chair resembles a deer caught in the headlights as he is betrayed by one of his allies.

    The gentleman recently brushed aside Senator Brian Schatz's concerns about the bandwidth available to the PUC staff given the size of its docket by saying:

    "We can multi-task".

    It would appear that multitasking whist regulating has resulted in a bit of an accident.

    Stay tuned.