Will the Feed-In Tariff Fail?
One of our state’s best options for clean, renewable energy is solar. Solar farms are being built and solar panels are increasingly installed on homes and businesses throughout the islands. Even shopping centers and military bases are getting on board, helping Hawaii move closer to our 2030 clean energy goals. The state has encouraged residents to consider solar by offering rebates, tax credits and incentives. One of those incentives – the feed-in tariff – has great potential, but is being held up by a lack of assurance from Hawaiian Electric Company (HECO).
A feed-in tariff, also referred to as “renewable energy payments” or “advanced renewable tariff”, is put in place to set standard rates at which residents and businesses can sell the renewable energy they produce and feed into the grid. The tariff is meant to encourage residents and businesses to consider renewable energy options, such as solar panels, that can decrease our dependence on fossil fuels while contributing power to the grid.
While the feed-in tariff is good in theory, it relies on collaborative efforts of the resident or business and the power utility. And HECO’s participation is not without hesitation. For the power utility, there are concerns of reliability. HECO spokesman, Peter Rosegg explained, “”We want to get the most possible customer-sited renewable energy on our system while maintaining reliability”. (Source) With this concern in mind, HECO cannot guarantee it will purchase the power fed into the grid.
And without a guarantee that their power will be purchased, businesses and power developers are hesitant to invest in solar projects. Few or no solar projects means continued reliance on other energy sources – and in particular, fossil fuels – and less than successful results from the feed-in tariff.
Another program, “net energy metering”, has allowed individuals and businesses with solar projects that generate less than 100 kilowatts to benefit from their solar investments. Through this program, the utility and customers have an agreement by which the power they produce from renewable resources and feed into the grid is subtract red from their electric bills. The program is so successful, Rosegg reported that 3,600 participants are generating more than 20 megawatts of electricity on Oahu alone.
So if net metering works for individuals and small businesses, what is needed to make the feed-in tariff work for larger projects and solar power developers?
If the feed-in tariff is going to work, a compromise must be made. A consultant for Blue Planet, Mike Champley, has proposed one such compromise by which HECO would need to agree to compensate solar power producers if it decides not to accept their power into the grid. While Champley’s proposal is one possible answer, it will be up to HECO to settle on a solution. For the sake of sustainability, hopefully it will be an option that encourages solar developers and moves us closer to clean energy.
