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Grid parity in Hawaii – not a breakthrough

Now that grid parity has been reached in a number of areas, we can see what the future will look like – regulation will still be needed. In Hawaii, new obstacles were put in place at the end of 2011, right when grid parity was reached. What has the effect been?

Retail rates vary in Hawaii from one island (grid) to another, but they are generally quite high at between 30 and 52 cents per kilowatt-hour. Germany now installs the smallest, most expensive PV roof systems at a cost of less than 0.16 euros per kilowatt-hour, equivalent to roughly 20 cents in the US – clearly only a fraction of the retail rate in Hawaii.

So why are Hawaiians not installing a mass amount of PV? In a way, they are – 2012 was a bumper year for PV in Hawaii, with 109 megawatts newly installed, bringing the total up to 191 megawatts – enough to put the state in ninth place.

 - Increasingly, the debate over solar will revolve around photovoltaics cutting into the profits of conventional baseload plants. Grid parity makes no difference.
Increasingly, the debate over solar will revolve around photovoltaics cutting into the profits of conventional baseload plants. Grid parity makes no difference.

How is Hawaii going about putting the brakes on solar? The main mechanism is Rule 14H, which specifies that a study may be required for a new array to be connected to the grid if solar reaches that threshold of 15 percent of the load. Proponents of renewables are not even all fighting this barrier. On the contrary, one organization, IRECUSA, points out how bad things used to be:

In the 2011 edition of  Freeing the Grid, which went to print before the Commission approved these changes, Hawaii received an “F” for its interconnection policies. After the Commission’s order, Hawaii’s will now earn a “B” for interconnection.

Specifically, the old rule, for which the state received an F, stated that the amount of PV kilowatts should not exceed 15 percent of peak demand in a year. I reviewed an edition of Freeing the Grid a few years ago and found it to be a good example of why "the US is moving so slowly with renewables."

In Germany, demand peaks at around 80 GW, so 15 percent of that would be 12 GW. Germany has around 33 GW of PV installed at present. But on average Sunday afternoon, demand is closer to 50 GW, putting the limit at around 25 GW under Hawaii's rules. Any way you look at it, Germany is far ahead of the limit imposed in Hawaii and still has the most reliable grid in Europe.

Such a study can raise a project's total cost considerably. In its September 2012 issue, Photon magazine put the figure at 10 percent of a project and quoted an expert saying that there is "virtually no place" in Hawaii where a 100 KW array could be built without a study.

Contrary to the expectations that feed-in tariffs would no longer be needed after grid parity has been reached, Hawaii still offers them, as does Germany. The difference, as I pointed out in 2010, is that Germans have always seen feed-in tariffs as more than a simple price; the law in which they are specified is called the "Act on Granting Priority to Renewables on the Grid" and includes a stipulation that renewable electricity has to be purchased – there is no mention of any peak share of the load. (Craig Morris)

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