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Hawaii's PV Markets Calcification by Regulation

|Includes: CSIQ, ESLRQ, FSLR, SunPower Corporation (SPWR), STP, SUNEQ, YGE

 Hawaii PV Market Calcified

It seems the Hawaii PV market is facing some significant challenges with its intent and goals. With the recent filings by the utility here via the PUC, it seems unless there is some impasse, the market here will stall.

This means investment in this sector will be passed over for better returns in other more desirable markets.

Due to the penetration caps it seems our desire to reach our states energy goals of reducing our dependency on 88% of our energy from off island resources, like oil and coal will have to wait. Even heralded a couple of years ago- our Hawaii Clean Energy Initiative might need to put the brakes on under the non firm distributed generation genre.

As of this week, the filing with the PUC clearly will slow down and potentially stop the PV market here.

This is a snippet of the 126 page document- They can be found at our PUC DMS serve website as well. The docket is 2008-0273

Click on the daily activity for 02/08/2010


"Due primarily to the high level of existing and

planned renewable resource penetration on the MECO and HELCO systems, the studies

indicate that there is minimal to no room at this time to accommodate additional

renewable resources (FIT or otherwise) without significant curtailment of either existing

or planned renewable resources, or a threat to system reliability. The impact of this

determination is that the integration of FIT resources on the HELCO and MECO systems

may have to be temporarily deferred until additional studies can be performed and/or

infrastructure developed, so that additional distributed renewable generation can be

integrated on these systems without threatening system reliability or causing significant

curtailment of other renewable generation."

So, how do we get everyone to focus on the solution? The stakeholders are many. The utilities need to be made whole and solvent. The rate payer is looking to manage their operating expenses. The state needs a game plan, as we are essentially 3 weeks away at any given time from not having a super tanker show up, in effect making us Amish overnight.

How do we get public policy in alignment with the challenges we face? Our PUC is underfunded and understaffed. The utility has legitimate concerns about maintaining the reliability of the grid.

We should rate base energy storage as an incremental step to addressing the short term challenge. We should also explore the idea of understanding better exactly how much percentage of the system reliability can be stretched as a percentage to get us there from here.

How it looks now is the island of Maui and the Big Island will not be able to accept any additional non firm renewables. This will stop job growth and potentially force more companies out of business as a result and further push into the future our goal as a state to reduce our reliance on imported energy.

How this affects energy sales in the short term will impact the 10 mW's that were approximately installed in 2009, as the preliminary data suggests.

Hawaii's inflection point for the reliance on oil makes the state highly vulnerable to the index of oil which ripples through every good and service in the state. In 2008, we spent 10% of our GDP on oil imports. This unsustainable model only gets exacerbated as oil creeps north of where it is today. In a bad economy with oil selling where it is today, only makes us wonder what it will be when the economy gets back on track.

Keith Cronin

Disclosure: Short SPWRA