On Tuesday, January 21st 2015, The Hawaiian Electric Companies’ filed Docket No. 2014-0192 in a motion for approval of NEM program modification and establishment of a transitional distributed generation program tariff (TDG). If approved by the Public Utility Commission, the customers of HECO, MECO and HELCO will see significant changes in world of distributed generation, DG (roof-top photovoltaics).
There are pros and cons to the suggested motion depending on which side of the fence you stand. In the long run it will provide both the Utility and Consumer an avenue to grow. The allotted PV circuit space will increase from 120% to 250% of Gross Daytime Minimum Load (GDML). However, with the increase in circuit penetration comes the drawback of reduced return on investment (ROI).
Based on the results of technical inverter testing, it was found the grid can take many more times the current level of Distributed Generation (DG). In the past the Utilities have been reluctant to allow their customers the benefit of roof-top solar touting the extreme safety concerns they had with any increase DG. Although there were no recorded instances of toasters catching fire due to inadvertent transient over voltage conditions, MECO, HECO an HELCO stood united in their sizing constraints and lectured about the possibilities of danger.
Now that the testing has been concluded, Hawaiian Electric is happy to announce they will clear the queues for those who have been waiting for PV and allow them the benefits of solar… ONLY if the PUC approves the modifications to the program. That’s right, although it has now been deemed safe, it is only safe if there are shared cost benefits to the utility. Without the PUC’s approval, the existing sizing constraints will remain in place.
Under the proposed plan a new accounting practice will be implemented. Currently, for every kW sent to the Utility, full price is paid and credited to the customer’s account. Under the new plan, customers will roughly receive half of what they receive today. It’s a little more complicated as the credit applied is equal to the Base Fuel Energy Charge plus the Energy Cost Adjustment but when it all shakes out, if MECO’s rate is now $0.38/kWh the customer would receive roughly $0.19/kWh from the utility. For Oahu, HECO’s rate is now $0.36/kWh so the HECO customer’s would receive roughly $0.18/kWh from the utility. These rates fluctuate with the price of oil.
All current NEM customers will be grandfathered and remain NEM customers until changes to the account occur. Which means, if an existing NEM customer were to sell their home and change the account holder, the new account holder would be switched to the Schedule Q program.
Hawaiian Electric expects system sizing to decrease. The ROI pencils out higher for systems sized only for daytime usage when power is instantaneously used by the loads in your house. Power goes where it is needed the most so if your refrigerator is running, power from your PV system travels straight to the refrigerator before ever checking into the utility. Therefore, the customer realizes gain from the full production of the system instead of getting halved by the utility.
Customers with Power Purchase Agreements (PPA) and Leases will need to be very aware of their situations. Under the new program, these agreements do not pencil out for the 100% offset of their utility bill unless the price of oil sky rockets increasing the Base Fuel Energy Charge.
For customers wishing to have maximum savings (zero out usage) on their utility bill, system sizes will need to be increased by 50% to 70% depending on their current lifestyle. Knowing when power is consumed is crucial in proper sizing of the system. Once this motion is passed, night time usage should be doubled when calculating system size as the utility takes half. This doubling of night time load increases system size and expense therefore decreasing the Return on Investment.
ROI under the Current NEM agreement ranges from two to four years. ROI under the proposed Schedule Q will remain the same for those purchasing PV for only daytime usage but will increase to five to seven years for those wishing to mitigate 100% of their utility consumption.
Hawaiian Electric has given a 60 day deadline to the PUC. We anticipate a conclusion sometime around March 21st. For those customers interested in roof-top PV under the existing NEM program, it is suggested they submit their NEM applications as soon as possible. Hawaiian Electric will honor all submitted NEM applications prior to the passed motion. Once the motion is passed, all new applications will be filed for Schedule Q.
For more information, Solar Consultants may be reached at (808)643-8000 toll-free throught the state of Hawaii.