WHT reported Dec.6 on one of Hawaii Electric Light Company’s community hearings, seeking input for its 2013 Integrated Resource Planning PUC Docket 2012-0036, on how to expand clean, renewable electricity and reduce kWh rates. This summary of a submission to
WHT reported Dec.6 on one of Hawaii Electric Light Company’s community hearings, seeking input for its 2013 Integrated Resource Planning PUC Docket 2012-0036, on how to expand clean, renewable electricity and reduce kWh rates. This summary of a submission to PUC suggests a HELCO business model based on many small, individual photo voltaic plus battery backup systems to realize: electricity rates below 20 cents/kWh with proven technology; uninterrupted power during grid outages; elimination of imports of oil or liquified natural gas for electricity; preserving HELCO’s transmission, metering and billing infrastructure; increased economic activity, jobs and sales in Hawaii; about same net state and county tax revenue despite subsidies and meeting state clean energy goals, while reducing air pollution effects and obviate undersea power-cable connections.
The problem: As HELCO electricity rates increase, more and more households and businesses may join the folks who generate their own electricity on-grid or off-grid via PV plus battery backup systems. There are reportedly more than 200 applications for feed-in tariff contracts waiting for approval by HELCO. In the past, HELCO has expressed little interest in on-site, distributed battery backup to enable more distributed PV, while such backup would reduce grid-load, and has demonstrated satisfactory operation in off-grid households for decades. Large numbers of net-energy metering or feed-in tariff PV contracts without on-site battery backup are not economically nor technically viable for the utility. But numbers of net and feed-in tariff contracts become viable for both consumers and HELCO with on-site storage.
One solution: PV plus battery backup systems would not require new bio-mass, geothermal or power plants near anyone’s backyard, but may enable HELCO to join contractors with financing (if needed), possibly owning, and/or installing distributed HELCO PV plus battery backup systems on homes and businesses; would preserve its transmission (for excess PV power and for trickle-charging home batteries) distribution, metering, and billing; and be a win-win for consumers, our economy, HELCO and government. A shining example for businesses is the 250-kW-PV system, backed by 250-kWh of Li-battery storage, with a number of net contract now supplying electricity to the West Hawaii Civic Center at 20 cents/kWh. Primary PV backup,(i.e. battery storage worth about 15-20 hours of average consumption), would be located on-site and integrated with all newly installed PV plus battery backup systems. Numbers of net or net-energy metering contracts would feed surplus electricity to the grid as done today, although rate-independent net-energy metering contracts would be preferred.
An analysis of installing such systems for all of the approximately 73,000 homes in Hawaii County looked at 30-year leveled cost benefits for:
a. Consumers: Battery additions for PV systems raise their total cost, but provide uninterruptible power and are affordable now — about the cost of som SUVs or pickup trucks. With total costs of $12.33/W(peak) before subsidies, the payback is 16.5 years, but approximately 8.3 years with present subsidies. Such a subsidized PV installation results in 30-year levelized rates of 16 cents/kWh, or 19 cents/kWh without the state subsidy, compared to a projected 30-year leveled HELCO rate of 59 cents/kWh, if rates escalate only 2 percent a year.
Without the federal subsidy (which may expire in 2016), the 19 cents/kWh rate would rise to 27 cents/kWh, but come down to 18 cents/kWh, including interest, if low installation costs were also achieved here, with support from high-volume pricing for thousands of PV installations, below today’s $6.7/W(peak) after subsidies.
b. The total imports for electricity generation (equipment plus fuel) for the county’s 73,000 households, over a 30-year period would drop by a factor of 3.7, from $5 to $1.4 billion, despite the initial approximately 10 times higher import costs of PV plus battery backup systems hardware.
Moreover, the money saved on oil and on reduced electricity rates, which frees up discretionary household money, would increase economic activity by the above factor times an economic multiplier, that in turn depends on the fraction of those savings used on local versus imported products and services, for which we assumed 70 percent.
c. HELCO is supplying some 438 GWh a year to about 73,000 “average” homes, out of about 1,100 GWh a year total sales. If PV and battery systems are installed in all those homes, HELCO would only need to deliver, on average, an estimated 2 percent or 8.8 GWh a year trickle charge to those homes, saving about 40 million gallons a year of fuel, but losing electricity sales of about 430 GWh a year. However, HELCO would increase its income from the minimum monthly charge (now $20 a month) to over $17 million a year, and derive additional income from sales of the excess free or discounted electricity from net-energy metering and feed contracts, respectively.
Grid loads would be starkly reduced, whether for trickle charging or for handling noon-time surplus power.
d. State tax revenue: The 30-year leveled state and county tax revenue (about $18 million a year for conventional generation hardware and oil imports, and electricity sales) may experience a no change or even a small increase, over the 30-year PV service life period, to about $20 million a year, after including the present levelized state PV subsidy, thanks to an increase by $27 million a year in tax revenue from the above increased economic activity.
Based upon the above preliminary analysis results: Hawaii County should join hands with HELCO and solar contractors to ensure no willing household or business is left without a PV and battery system, for financial reasons; the state should emulate the low PV installation costs in Germany and harmonize the insurance and tax requirements of the more onerous feed-in tariff contracts with those now in place with net-energy metering contracts.
HELCO should expand its business model to finance and install distributed PV plus battery backup systems on homes and businesses, jointly with contractors, whether retaining ownership or not.
Ulrich Bonne is a Kailua-Kona resident.
