HECO Plan to cripple….er….triple solar by 2030

bill-problemHECO got their revised “Electric Power Supply Improvement Plan” into the PUC just under the wire.  They laud it as “tripling rooftop solar by 2030” but solar installers I’ve spoken with say it is more a plan to “cripple rooftop solar.”  Improvement might be just a little bit of an overstatement.

HECO proposes raising the connection fee from $18/mo to $51/mo for existing customers and a whopping $71/mo for new rooftop solar customers.

That immediately changes the payback period from 3 1/2  years to 4.5 years.  The payback period is the time to recoup one’s investment via utility bill savings.

But wait!  It gets worse!

HECO wants to charge an interconnection fee to new rooftop solar customers of $1,500 per KW installed.  Since the average system is about 5KW, this means that in addition to paying for the PV system, the customer will have another $7,500 tacked on to their bill!

Now the payback period is looking more like 14 years.  That’s such a lengthy payback that very few people will even consider installing rooftop solar.

So tell us, HECO, just exactly how will quadrupling  the payback period result in tripling the amount of installed rooftop solar?

But wait!  There’s more!

HECO wants to abandon net metering.  With net metering a customer essentially sells at retail but loses any excess generation over a year.  So they really are selling at some number under retail price of electricity.  What HECO wants is to buy the energy at wholesale and sell the customer at retail.  This alone increases the payback period to 8 years.

What happens when it becomes too expensive to install solar while connected to the grid?  The “Utility Death Spiral” begins.  In that scenario, it becomes cheaper to go off grid with battery backup than to pay utility bills.   As more and more customers go off grid, it becomes more expensive for those left on the grid.

HECO might think that making renewable energy more expensive than abandoning the idea of rooftop solar will prevent it from participating in the death spiral but it is more likely to accelerate it.  A better plan would be to calculate the monthly connection cost to be less than the customer would pay for battery backup and not pile on extra charges that encourage customers to go off grid.

This “Death Spiral” is not advantageous to society.  It is cheaper over-all for customers to be able to install rooftop solar and use the grid for backup.  An interconnected utility can supply backup at a lower cost – especially if they invest in pumped hydro to store excess generation and return it during low generation times.

Even if we discount the interconnection fee and the loss of net metering, the $71/mo cost of connection for new customers is getting quite close to the cost of a battery backup system.  When we pile on the interconnection fee and end net metering, there’s absolutely no reason for a customer of HECO not to go off grid.

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