3 Lessons from Hawaii about Profitably Going Solar

Renewable energy has recently become a source of tension for the Hawaiian Islands, as the Hawaiian Electric Companies (HECO) struggle to accommodate the stunning growth of distributed solar generation. Given its location and climate, Hawaii has an abundance of potential solar electricity, and like any island, it faces an inherently high cost of electricity generated from imported fuels, with effective rates ranging from 26.3 to 37.6 cents per kWh. Residents are constantly seeking alternatives, but finding the right one is a balancing act — while they’re working to reduce reliance on fossil fuels, increase energy security and enjoy natural economic incentives for self-generation, individuals also need to support and adhere to utility regulations.

Luckily, many Hawaiian residents have mastered this balance. Solar penetration rates currently measure approximately nine to 12 percent on the islands — the highest in the nation — and they’re growing. Meanwhile, the HECO business model has struggled to adapt. Last fall, the elimination of net energy metering (NEM) created substantial disruption in the market. HECO pushed for a new interconnection policy, and with it, attempted to place new barriers to grid-connected solar.

This switch could happen in any state. When it does, solar is in danger of feeling like a burden instead of a boon for the companies and homeowners that have not yet made the investment. However, the benefits of self-generation and grid defection remain, and continue to gain speed. In particular, when you’re using intelligent inverters, you can ensure your ability to amplify the value of solar power and avoid the common problems of the grid.

Below are three lessons every solar user can take from Hawaii about profitably going off the energy grid.

1. Solar remains appealing despite utility restrictions.

The HECO restrictions threaten to put a dent in Hawaii’s solar industry. However, they don’t have to. With intelligent inverter technology, combined with reliable advanced storage batteries, residents can still aim for the goal of self-sustainability — or at least get close.

On a larger scale, the HECO restrictions have actually made it easier and more economical to defect from the grid altogether. With batteries now being virtually maintenance-free and having much longer lives, it’s possible to store solar energy during mid-day peaks and make that power available to loads throughout the evening and night. This setup makes it more realistic for end users to generate power to provide for the majority of their needs.

In fact, according to the Rocky Mountain Institute, these conditions that make it favorable for customers to defect from the grid may even lead to the eventual demise of the traditional utility regulatory model.

2. Energy independence is possible with intelligent inverters.

Being at the mercy of a large public utility is not an ideal situation for anyone. It can be particularly frustrating in places (like Hawaii) where the solar option is so reliable.

With intelligent inverters, it’s a viable option to increasingly defect from the grid, or even completely cut the cord. Newer inverters intelligently charge and maintain batteries, manage grid use, and can provide increased independence and improved performance. In fact, some of these models can keep customers completely off the grid for long periods of time. Basically, the home runs on solar and battery-stored power, and only draws from the grid to meet spikes in demand or to cover loads when solar power isn’t sufficient. This process is called “zeroing out,” and it’s becoming a real possibility with new inverter technology.

3. Utilities and consumers have different goals.

Utilities are increasingly turning to metering charges, monthly minimum bills and other fees to adapt to distributed solar and retain control. Utilities generate the bulk of their revenue by investing in expanding infrastructure, by putting “steel in the ground.” Solar decreases load growth and the need for investments in expanding infrastructure. Therefore, utilities continue to try to catch up with solar going into homes and businesses.  

Consumers, on the other hand, want the best, most reliable power at an economic price — and that’s before getting into the environmental benefits that renewable resources provide. As homeowners and business owners become increasingly aware of the viability of independent power, and if utilities continue to increase barriers, they may find themselves weighing what value they receive from remaining firmly connected to the grid. With the technologies discussed here, like intelligent inverters, solar and modern battery storage, relying less on the power company isn’t just a dream. Instead, solar can be an economic and flexible way for end users to take responsibility for, and control of, energy supply.

Phil Undercuffler (left) serves as director of strategic platforms for OutBack Power Technologies, a premier innovator and manufacturer of grid hybrid power electronics for renewable energy and other power applications. Prior to his work with OutBack, Phil served as the director of battery based and off-grid at Conergy, Inc. and also spent several years as Conergy’s technical services manager, providing training, design guidance and problem solving assistance for dealer partners throughout the United States and Canada.

Mark Cerasuolo (right) is the marketing director and head of the training program for OutBack Power, a designer and manufacturer of balance-of-system components for renewable and other energy applications. Prior to his work with OutBack Power Technologies, he held senior marketing roles at Leviton Manufacturing as well as with prominent consumer electronics companies such as Harman International and Bose Corporation, and was active in the Consumer Electronics Association (CEA). More recently he was the marketing lead for the Washington State Department of Commerce.  Mark also serves as a business & marketing advisor for the educational non-profit organization Healing the Culture in Kenmore, Washington, and was a volunteer field literacy tutor for the Ventura County Adult Literacy program in California.

Lead image credit: Daniel Ramirez | Flickr

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