Hawaii’s Solar Market Is Booming; Why This Is a Very Bad Thing


In June 2001, when Hawaii became the 35th state to adopt a Net Energy Metering (NEM) law to promote the installation of small renewable energy grid-connected systems, it probably seemed like one of those “duh” moments. All that sun power waiting to be harnessed would certainly transform the state into one blazing hot solar market.

But things started out slowly. In a recent article for the Honolulu Civil Beat, Marco Mangelsdorf, who is president of ProVision Solar and also teaches energy politics at University of Hawaii at Hilo, noted that from 2001 through 2007 a total of only 386 NEM systems were installed across the state. By 2011, that number had risen to 9,625 and this explosive growth has had unexpected consequences.

The Los Angeles Times reports that Hawaii’s homeowners and businesses are now producing nearly 140 megawatts of their own power, or the equivalent of a medium-size power plant. This has the Hawaiian Electric company worried that all this do-it-yourself solar power could threaten parts of the electrical grid if the power generated by homeowners in some areas starts to exceed the output from power plants.

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Part of the problem is that each island has its own separate power grid, so it’s not easy to quickly compensate with power generated elsewhere. The Times reported that, “The result, if not carefully managed, can be computer-killing power surges (in cases of excess generation), flickering lights, isolated blackouts or worse,” and quoted Robert Alm, executive vice president of Hawaiian Electric, as saying, "It can crash the entire system."

“The electric utilities will not let the system crash,” Mangelsdorf told TakePart. “In principle, it’s not that complicated: the grid is finite. Therefore, the amount of power, from whatever sources, feeding into the grid has to be finite. The big debate is over the mix. Any typical power grid must have a certain percentage of what they call ‘firm’ power, i.e., not solar or wind non-firm, variable power.”

He added that, “While there’s interesting stuff going on in the labs as far as this ambiguous thing called a ‘smart grid,’ I don’t believe that any techno fixes are going to keep up with the reality on the ground as far as circuit after circuit reaching saturation and being closed to more DG [distributed generation] penetration. Others appear to have more faith than I do in the practicality and timeliness of the techno fixes.”

Power surges aside, elected officials are also concerned about the effect of the state’s renewable-energy tax credit on overall revenue forecasts. Hawaii offers a 35 percent state income tax credit for homeowners and businesses that install PV systems, and that incentive can be used in combination with a 30 percent federal tax credit. The Honolulu Star Advertiser stated last month that the cost of the state tax credit has grown from $34.7 million in 2010 to $173.8 million in 2012.”

In fact, the Civil Beat reported earlier this month that the Hawaii Department of Taxation has issued new rules that “effectively restrict the number of tax credits that homeowners and solar companies can claim on solar arrays.” And they predict that the fight against the tax department’s new rules is certain to be a focus of lawmakers when their legislative session begins in mid-January.

Considering all that’s at stake—for homeowners, solar companies, and environmentalists—it should be an interesting fight.

Do you think restrictions should be placed on the growth of Hawaii’s solar industry? Tell us in the COMMENTS below.

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Lawrence Karol is a writer and editor who lives with his dog, Mike. He is a former Gourmet staffer and enjoys writing about design, food, travel and lots of other stuff. @WriteEditDream | Email Lawrence | TakePart.com