Maui Gets A Sweet, Cost-Cutting Solar Deal

Maui and Molokai are getting new solar on eighteen public buildings, and it’s a sweet deal that emphasizes how transformative solar power, as it falls in price, can be in markets where electricity is now expensive, like Hawaii: Not only will the energy be cheaper than what the county buys from Maui Electric, the price will decline over the course of the 20-year power purchase agreement.

And this too: As many as five of the facilities will get microgrid systems. That means they’ll have battery storage installed along with the solar power, keeping the energy flowing even if the grid goes down.

“We will save taxpayer dollars because our starting price is lower than the MECO rate,” Mayor Alan Arakawa said in a statement. “But just as important is the fact that the County demonstrate to the community how renewable energy can be used in ways that traditional fossil sources cannot.”

We’ve written before about how Hawaii, which generates about three-quarters of its electricity by burning imported petroleum, has the highest electricity rates in the nation. According to the most recent  EIA Electric Power Monthly (see page 118), the average retail price of electricity in the state was 36.61 cents per kilowatt-hour in the residential sector; 33.06 cents in the commercial sector; and 29.12 cents in the industrial sector.

Compare that to the deal the county of Maui locked in with Hawaii Pacific Solar:

Hawaii Pacific offered the County a proposal with “price de-escalation.” The price the County will pay for the power will drop every year for 20 years by 2.75 percent (from 23.4 cents kWh in the first year to 13.8 cents kWh in year 20).

That’s for the bulk of the solar, which won’t come with energy storage. But even the solar with microgird capabilities will start at 27.5 cents/kWh and drop steadily to 16.2 cents.

The idea is that if there is a blackout, it can operate in what we call ‘islanded mode,’ and convert to using stored solar energy.”

“We thought that the market price of solar plus storage would be less than the MECO rates for Molokai, but we were not sure if the price would be lower than the Maui island rates,” Doug McLeod, Maui County energy commissioner, said in a statement. “We were pleasantly surprised by the PPA price for micro-grid systems.”

In 2012, Hawaii saw 109 megawatts of new solar electric capacity installed, seventh most in the U.S., giving it a total of 191 MW, which ranks ninth. Pretty impressive, considering that the state ranks 40th in population.

Pete Danko is a writer and editor based in Portland, Oregon. His work has appeared in Breaking Energy, National Geographic's Energy Blog, The New York Times, San Francisco Chronicle and elsewhere.

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