If you wonder why America’s utilities are rattled by the rapid growth in rooftop solar - and are pushing back - William Walker has a story for you.
Walker lives in Ewa Beach, a development on the sultry leeward coast of the Hawaiian island of Oahu. Standing in his driveway, he points to a ubiquitous neighborhood feature: solar panels on the roofs of five of six nearby houses.
Shade is scarce, and residents call homes “hot boxes” that require almost round-the-clock air conditioning. Hawaii, which imports pricey oil to power its electricity grid, has the highest utility rates in the nation at 37 cents a kilowatt-hour - more than double California’s and triple the national average.
With bills for 1,600-square-foot houses like these running as high as $400 a month, solar is seen as less a green statement than as an economic no-brainer given state and federal tax credits for as much as 65 percent of installation costs.
Walker and his wife, Mi Chong, bought a rooftop system: An 18-panel, $35,000 installation producing 5.9kilowatts of power financed for $305 a month. It would be connected to the grid under a system known as net metering that essentially lets residents deduct the value of their solar-produced electricity from their power bill and even be paid for electricity in excess of that.
Walker expected that his bill would drop most months to an $18 service charge, offsetting the loan payment, and figured the system could pay for itself in as little as five years.
That is until his utility, a subsidiary of Honolulu-based Hawaiian Electric Industries Inc., told the Walkers they couldn’t connect their system to the grid. They aren’t alone.Hawaiian solar installers estimate that hundreds if not thousands of state residents are being put in solar limbo by a virtual moratorium on new connections in many parts of the company’s service area.
The reason, according to the Hawaiian Electric Co.: So many Hawaiians are installing solar that circuits may become oversaturated, causing voltage spikes and damaging appliances, electronics and even the utility’s equipment. The company needs more time to study the matter.
The Walkers, who say they got no advance notice of the shutdown, are now paying both their power bill and their monthly rooftop loan. The utility recently told them they will eventually be allowed to join the grid without having to pay for expensive equipment upgrades but couldn’t say when.
Spurred by a drop in panel prices, robust government subsidies and a technology that no longer appears experimental to mainstream America, rooftop photovoltaic solar is bursting out everywhere. About 200,000 U.S. homes and businesses added rooftop solar in the past two years alone - about 3 gigawatts of power and enough to replace four or five conventionalsized coal plants.
The United States set a single-quarter record with 31,000 residential rooftop installations in the three months through Sept. 30. Solar represented 72 percent of all power added nationally in October.
Utilities, with about $360 billion a year in power sales and seeing a potential challenge to the conventional grid, are starting to fight back. Hawaiian Electric, despite criticism from Hawaii’s solar industry, denies the moratorium is anything more than an honest effort to address the technical challenges of integrating the solar flooding onto its grid.
The slowdown comes in a state where 9 percent of the utility’s residential customers on Oahu are already generating most of their power from the sun and where connections have doubled yearly since 2008.
In California, where solar already powers the equivalent of 626,000 homes, utilities continue to aggressively push for grid fees that would add about $120 a year to rooftop users’ bills and, solar advocates say, slow down solar adoptions.
Similar skirmishes have broken out in as many as a dozen of the 43 states that have adopted net-metering policies as part of their push to promote renewable energy.
In Colorado, Xcel Energy Inc. has proposed cutting the payments it makes for excess power generated by customers by about half, because it says higher payouts result in an unfair subsidy to solar users.
Last month in Arizona, 1,000 protesters swarmed the state capital while local and national solar advocates lobbied against an effort by utility Arizona Public Service to impose a $50 monthly fee on new solar adopters. Solar advocates said the charge would have crippled the state’s 10,000-worker solar industry and thwarted the desire of residents to have a choice in the power consumption.
State regulators, after two days of often contentious debate, voted to allow the state’s largest utility to charge customers about $4.90 a month for solar connections after Dec. 31 - less than 10 percent of what it was asking for.
Hawaiian Electric said the issue is that for about 20 percent of Oahu’s grid, there is so much solar connected that more can’t be added without further study because of the potential for reliability and safety issues. Solar advocates have said the figure is arbitrary.
Arbitrary or not, it means new solar customers must await engineering studies to determine if they can connect without causing surges that may damage appliances, electronics or utility equipment.
Some might have to pay for utility equipment upgrades that could cost thousands of dollars before getting approval to connect.
“This is about safety,” said Scott Seu, Hawaiian Electric’s vice president for energy resources and operations. “We are so far ahead of the rest of the nation as far as the amount of distributed rooftop solar in our neighborhoods that we are now at points where there are potential safety and operating liability issues.”
What’s mind-boggling to many of the stewards of America’s 3,200 utilities is how fast solar has mutated from a fringe power source to a technology being peddled today at outlets like IKEA Group and Home Depot Inc. Wal-Mart Stores Inc. expects 1,000 of its approximately 4,500 stores to be solar powered by 2020.
The fuss might seem overheated based on current numbers - solar power provides less than 1 percent of the nation’s energy needs. Yet it’s the rapid escalation of solar and the exponential long-term projections for its rollout that caused Fitch Ratings Ltd. in July of this year to warn that the solar juggernaut is “casting a shadow on U.S. utility-rate design.”
Moreover, solar’s potential is coming as escalating fossil fuel prices make it competitive - even without subsidies - with conventional electricity.
Jeff Guldner, senior vice president of customers and regulation for Arizona Public Service, echoes a familiar argument as to why solar users connected to the grid should help pay to maintain it.
While generous net-metering rules may have made sense at the outset of the solar revolution to get the party started, it will have enormous disruptive effects on the utilities that bear the burden of keeping the grid operating.
“Somebody has to pay for maintenance and upkeep,” Guldner said, and solar users in the current rate structure aren’t doing so.
Business, Pages 21 on 12/30/2013