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Hawaiian Telcom plans solar upgrade on Big Island

Updated: 
March 31, 2014 - 8:35am

Hawaiian Telcom Inc. plans to install rooftop solar on 24 of its buildings around the Big Island as part of a larger, 7.5-megawatt effort to cut its energy costs across the state.

As detailed in a March 21 filing with the Hawaii Public Utilities Commission, Hawaiian Telcom seeks to enter into a 25-year lease agreement with Honolulu-based contractor TSWG Solar and Kailua-based Sunetric to install and maintain rooftop photovoltaics for facilities on Oahu, Hawaii, Maui and Kauai. The first phase of the installations is planned for Oahu, with later phases including the Neighbor Islands.

“Hawaiian Telcom is proud to support clean energy through this initiative to install solar energy systems on 78 of our buildings throughout the state,” wrote the company’s Corporate Communications senior manager, Ann Nishida Fry, in response to questions.

According to the filing, the company has long considered pursuing solar energy as a means of cutting its electric bill. The company had considered installing and maintaining the photovoltaic (PV) systems on its facilities itself, but ultimately decided it would be more cost effective to enter into an agreement with either a solar company or an investor who would own the PV systems on its premises and sell the PV-generated electricity back to Hawaiian Telcom pursuant to a power purchase agreement.

“After considering the estimated cost of PV panels alone, purchasing and owning the PV Systems (even with the tax credits) was deemed to be less favorable than entering in the Lease Arrangements,” the filing reads.

The company would agree to purchase from TSWG 100 percent of the energy produced by the photovoltaic systems at a pre-arranged rate that would include fixed annual increases. Nishida Fry said the company estimates the total energy to be generated could be between 1 and 1.3 megawatts, if all 24 sites on the Big Island are operating.

The exact rates stipulated in the power purchase agreement were redacted from the filing, with the company requesting a protective order from the PUC to prevent the release of the confidential information. However, Hawaiian Telcom did say that it anticipated an immediate return on the agreement.

“Based on HECO’s effective electric rates as of March 1 … it is anticipated that HTI will realize an immediate reduction in its monthly electric energy charges for the Phase 1 sites,” the filing says.

Hawaiian Telcom adds that, because the fixed energy rate in the power purchase agreement will be the same regardless of the location of the PV systems, “the energy savings will be even greater on the Neighbor Islands, as those rates have consistently been higher than Oahu rates.”

According to Nishida Fry, most of the 24 buildings identified on the Big Island are central offices.

“Central offices house telephone switching equipment and are located across the island,” she wrote. “In general, the rooftops of our central offices are fairly small, so we don’t anticipate generating excess energy to sell back to the electric company. However, we do plan to enter into Net Energy Metering agreements with HELCO.”

As many Big Isle residents and businesses have discovered over the last few years, Hawaii Electric Light Co. — as well as its sister companies, Hawaiian Electric Co. on Oahu and Maui Electric Co. — is facing a growing problem with oversaturation of photovoltaic energy being fed back into the grid on various circuits around the island. Many customers have been left hanging as HELCO works to find solutions to keep them connected to the grid while allowing them to sell excess energy back to the utility at the same rate it charges for electricity through net energy metering agreements.

The filing says that some site designations for the solar installations on the Neighbor Islands could be contingent on energy saturation levels. The company plans for the installations to be done in phases, with Phase 1 tentatively planned to begin on June 30, consisting of 11 sites on Oahu. Phase 2 would include up to 33 sites located on the various neighbor islands.

“Future Phase site designations beyond those identified in Phases 1 and 2 will depend on specific site conditions, electric utility renewable energy saturation levels on the circuit serving the site, and the continued availability of tax credits to TSWG,” the PUC filing reads.