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Hawaii’s New Feed-in Tariff for Solar PV Finding Limited Adoption So Far

Posted on Tuesday, January 4th, 2011 at 11:16 am by Paul Gipe

Expected interest in Hawaii’s feed-in tariff program has not materialized, says a report by the program’s independent observer.

Accion Group found that in the first month of operation, Hawaii’s long-awaited feed-in tariff policy had generated little activity, and much of the allocated capacity remains to be filled.

Hawaii’s experience contrasts markedly with successful programs in Ontario, Canada; Vermont; and Gainesville, Fla., where applicants, many for solar photovoltaic systems, overwhelmed administrators.

Of the total 80 megawatts allocated to the program among the three utilities, only 2.6 megawatts of solar PV applications have been filed, says Accion, a New Hampshire consulting company. Accion makes no determination of why the response to the program has been so lackluster.

In addition, 23 kilowatts of existing net-metered projects have converted to the feed-in tariff program. Twenty megawatts of capacity has been allocated to conversion from net-metering accounts through early 2011.

The Hawaii Public Utilities Commission approved Tier 1 and Tier 2 feed-in tariffs on Oct. 13, 2010. Tier 3, the final tier in the program, has not been approved and there is no definite date when it will be implemented.

Critics have charged that the program is limited and offers unattractive prices.

Hawaii Program ‘D’ Rated

In the World Future Council feed-in tariff grading system, Hawaii compares well to Vermont, though both share a “D” grade. Hawaii’s grade of 57 points is slightly higher than Vermont’s 54 points.

Hawaii’s program has two features that make it stand out in comparison to Vermont.

Hawaii is the first state in the nation with tariffs in dual tracks: one set of tariffs for those using one set of state subsidies, another set of tariffs for those who use a different state program.

Multiple Tariffs for Multiple Technologies

Vermont’s program offers two tariffs for wind energy: one for small wind, one for large. However, there are only single tariffs for all other technologies.

Hawaii, in contrast to Vermont, offers tariffs for four different technologies in two size “tiers,” as they are called. Tier 1 is for projects less than 20 kilowatts. Tier 2 is for varying amounts greater than 20 kilowatts, depending upon the island where the projects are located.

However, Hawaii’s program is far less robust than successful programs in other countries and the Canadian province of Ontario. In the World Future Council’s grading system, Ontario qualifies for an “A minus,” with 84 points.

Program Details

In implementing the program, Hawaii’s Public Utility Commission ruled that despite concerns, the program should be launched without further delay.

“The commission believes the better course is to proceed, learn from experience, and make any necessary changes and improvements upon the commission’s next opportunity to review the FIT program in two years,” the PUC said in its ruling on the program.

Following are some of the details of the Hawaii feed-in tariff:

Program review: 2 years

Program Cap: 80 MW in total

Oahu: 60 MW

Big Island:- 10 MW

Maui, Lanai, Molokai (combined): 10 MW

Project Size Tier 1: <20 kW on all islands

Project Size Tier 2: >20 kW as noted

PV: <500 kW on Oahu

PV: <250 KW on Maui and Hawaii (the Big Island)

PV: <100 kW on Lanai and Molokai

CSP: <500 kW Oahu, Maui, and Hawaii (the Big Island)

CSP: <100 kW on Lanai and Molokai

Wind: <100 kW on all islands

Hydro: <100 kW on all islands

Project Size Tier 3: <5 MW on Oahu

<2.72 MW on Maui and Hawaii

Or 1 percent of peak load

Wind: >100 kW excluded on Maui and Hawaii

Comparison of Hawaii Program

By international standards. the program is modest. Hawaii has a population of 1.3 million people. The 80-megawatt FIT program limit represents about 61 watts per capita, although there are other programs in the state for procuring renewables.

In contrast, Vermont has a significantly smaller population and a program cap of 50 megawatts, resulting in a higher relative limit of about 80 watts per capita.

Neither Hawaii’s nor Vermont’s state program compares favorably to Gainesville, Fla. Gainesville has set a soft target of 32 megawatts for a population of 100,000, for a relative program cap of 320 watts per capita — four times that of Vermont and more than five times that of Hawaii.

Insolation in Florida and Hawaii is similar and significantly more than in Vermont. If all the program capacity were developed with solar PV, Hawaii and Vermont would generate about 1 percent of their electricity with solar. In contrast, Gainesville would generate 2 percent of its supply with its program.

Gainesville installed nearly 4 megawatts of solar PV in 2010, the first full year of the program. or nearly twice the 2.6 megawatts of applications under Hawaii’s program.

Germany currently generates 2 percent of its more than 500 terawatt-hours per year per year from solar PV alone. Wind turbines in Germany produce another 7 percent of supply. Biomass and biogas generation bring total renewable generation to 16 percent of supply.

A discussion of Hawaii’s feed-in tariff on the website Energy Self-Reliant States notes the estimated prices needed for a solar PV system to yield an 8 percent return on investment. The website is a project of the Institute for Local Self-Reliance.

Read the original article on The Solar Home and Business Journal.

windenergybasics Paul Gipe is the author of Wind Energy Basics.

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