HawaiiSolarUpdate

ChristyImataHawaiiSolarEnergyAssocia:on

POBox37070HonoluluHI,96837www.hsea.org

Christy.HSEA@gmail.com

USEPAInnova:veEnergyManagementWorkshopOahu&Kaua’iFebruary2010

SOLARMARKETOVERVIEWSec:on1

PVGrowingDespitetheDownturn

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2001 2002 2003 2004 2005 2006 2007 2008 2009

HELCO

MECO

HECO

Source:HECOCompaniesNetEnergyMeteringAnnualStatusReport2009.

kW,netmeteredsystemsonly

SolarHotWaterInstallsup196%from2004‐2009

Source:HoneywellU:litySolu:ons.

HECOprograminstallsonly

SolarHotWaterPenetra7onRoughly25percentofsinglefamilyhomes

Note:Totalisbasedonnumberofcombinedsingle‐familyaaachedanddetachedhomes.Source:USCensus,AmericanCommunitySurvey,threeyeares:matesfor2007;HECOCompaniespressrelease,June4th,2009.

GridPowerisExpensiveinHawaii

Source:USDOEEnergyInforma:onAdministra:on,AverageRetailPricetoEndUser,December2009release(dataforSept2009).

costperkWh

EnergySupplyVulnerabilityCannotbeOverstated

Source:USDOEEnergyInforma:onAdministra:on,ElectricPowerIndustryGenera:onbyPrimarySource(asof2007).

Hawai‘iResidentsPreferSolarWhichSourceofCleanEnergyIsBestforHawai‘i?

Source:BluePlanetFounda:onSurveyofHawai‘iresidents,N=403,Nov‐Dec2008.

DragsonGrowthin2009

•  Creditmarkets

•  Businessconfidence

•  Gridaccess

•  Othersignsarestronglyposi:ve

SOLARINCENTIVESSec:on2

©DistributedEnergyPartners,LLC2009

FederalLegisla:on

•  EnergyPolicyActof2005‐raisedfederalsolarinvestmenttaxcredit(ITC)from10%to30%

•  EmergencyEconomicStabiliza9onActof2008(“BailoutBill”)‐extendedsolarinvestmenttaxcreditto2016

•  AmericanReinvestment&Actof2009(“S:mulusBill”)‐madecreditavailableinformofagrantin2009‐2010(forcommercialonly)‐60daypayoutforcommercialonly

CurrentStateofHawaiiTaxPolicy

•  HRSSec:on235‐12.5RenewableEnergyTechnologiesIncomeTaxCredit(RETITC)

‐Op:on1:35percentofinstalledcost;non‐refundable‐Op:on2:24.5percentofinstalledcost;refundable‐Op:on3:35percentofinstalledcost;refundable(onlyforverylow‐income(<$20,000AGI)orpension‐only)

•  MACRSdeprecia:on‐‘fiveyearproperty’‐basisisinstalledcost

MACRS:FederalandState

Deprecia7onSchedule

Year1 20.00%Year2 32.00%Year3 19.20%Year4 11.52%Year5 11.52%Year6 5.76%

• Depreciablebasisisinstalledcostlesshalfoffederaltaxcreditforfederal(currently85%ofinstalledcost).

SolarWaterHea:ng

•  Samestateandfederalincen:vesasPV

•  “Mandate”kicksinfornewhomespermiaedaperDecember31,2009(loopholeallowscompliancewithgas)

•  Ratepayerfundedrebatedeclining‐Endsfornewconstruc:onJanuary1,2010buthomespermiaedin2009cans:llreceiverebatesun:lMarch2010‐Reducedfrom$1,000to$750February1,2010

RegulatoryPolicy:NEMandFIT

NEM•  ‘Store’electronsinthegridforlateruse•  Accoun:ngbasedonkWhcredits,notdollars•  Appliesonlytosystems<100kW(inroughterms$3,000/mo.powerbillon

Oahu)•  Cappedat1%(roughly12MW)HECOor4%(roughly8MW)MECO&HELCO

ofpeakdemand•  OnlycrediteduptoannualkWhused

FIT•  HighersystemsizecapsthanNEM•  Accoun:ngindollarsnotkWh•  Appliestosystemsupto5MW•  Cappedat5%ofpeakdemand(HECO:60MW,MECO/HELCO:10MW)•  Notlinkedtoloadatsite

Summary

•  NEM&FITservedifferentneedsinthemarket‐NEMisformanagementofopera:ngcosts‐FITinvolvesgetngintotheenergybusiness‐Risksandrewardsaredifferent

•  Currentlycustomersneedingmorethan100kWcanmusteither:‐install100kWsystems‐sizesystemabove100kWbutneverexportpower‐nego:atewithu:lityforpurchaseofexcesspower

•  RulesmakeitdifficulttooffsetlargerloadswithPV

INTERCONNECTIONSec:on3

Rule14H

Addi:onaltechnicalstudymaybeneededbasedon:

1.  Complexityofthepor:onofthegridsystemisbeinginterconnectedto

2.  Connec:ontoanetworksystem3.  Plantoexportpower4.  Feederpenetra:on>10%5.  Star:ngvoltagedrop6.  Genera:ngfacilitycapacity7.  Shortcircuitcontribu:onra:o>5%8.  Typeofinterfacetransformer

Source:Rule14,AppendixIII,Sheet34D‐8and34D‐9.

ChallengesofInterconnec:onStudy

•  Costtodeveloperofexis:ngstudieshasbeen$30,000‐$100,000

•  Timeframe>6months(typicallyshipsplaced‐in‐servicetaxyear)

•  Outcomecanbepurchaseofequipmenttointerconnectthesystem

Challenges:NEM&Interconnec:on

Source: FreeingtheGrid:BestandWorstPrac:cesinStateNetMeteringPoliciesandInterconnec:onStandards.November2009.

FUTURESec:on4

FutureIssues/Trends

•  Risingcostsofgridpowerdueto:oilpricetrends;costrecoveryoninfrastructureforsmartgrid;carbonpricingschemes

•  Endoffederalgrantop:onin2010

•  Con:nuedmoduleavailabilitybutwithincreasingdemand

•  Con:nuedgridaccesschallenges

ThankYou

HawaiiSolarEnergyAssocia:onPOBox37070

HonoluluHI,96837www.hsea.org