Solar Electric: The New Normal
/The worldwide Covid-19 pandemic has created a new normal in our day to day lives. From zoom meetings to the work-at-home employee, despite the challenges we face, we strive to continue to thrive and grow. Increase in electricity use at our homes and workplaces gives us even greater incentive to adopt solar electric (PV systems) or other renewable energy sources or energy efficiency programs as part of this new normal.
Funding for PV systems is critical due to high capital cost involved. The 2020 spending bill extends the solar ITC at its current level of 26% for two additional years, through the end of 2022, before decreasing to 22% in 2023 and disappearing for residential properties in 2024 and continuing at 10% for commercial properties. Businesses have availed PPP loans in round 1 and 2 which support their overall cash flow situation during this pandemic. Residential customers have received stimulus payments to the tune of $1,800 per adult at the time of writing this article and look forward to receiving additional $1,400 per adult in the future if congress passes the American Rescue Plan. The State of Hawaii also provides Renewable Energy Technologies Income Tax Credit (RETITC) @ 35% with caps for PV systems. Local banks and other financial institutions also offer loans which are self liquidating through energy savings and tax incentives. Hawaii based 3rd party funded Power Purchase Agreements (PPA) and leases are available at a lower cost of capital due to the availability of ITC and RETITC.
Technologies for PV systems have kept innovating constantly to provide higher power density solar modules, higher efficiencies advanced inverters, racking systems to go on various roofs, solar canopy covered parking stalls, and Battery Energy Storage Systems. The array of technologies available makes it easier to custom design a PV system for any energy user in the state.
Interconnection with Utility is made possible with various programs available from Hawaiian Electric and KIUC. These interconnection programs range in sizes and amount of kWh credits available to the utility customers. The utilities are required to generate 100% clean energy by 2045 as per state government mandate and Hawaiian Electric claims in Feb 2021 that 34.5% of its electricity generation mix was made up of renewable energy sources such as wind and solar. As we grow closer to 100% clean energy production, the utility interconnection programs must be adapted to require more controls, storage, and non-export which in turn would increase the cost of PV projects. There is an opportunity for early adopters to acquire and interconnect PV systems at relatively lower cost today than in future.
Energy Storage is increasingly becoming common in PV systems due to improved and lower cost lithium-ion battery technologies available and the need to self-consume electricity produced to maximize electricity savings at retail rate. Moreover, a battery storage system attached to a PV system constitutes a “qualified solar electric property expenditure” under § 25D(d)(2) of the IRS Code. Battery Energy Storage Systems will be the new normal for new PV systems and will also aid as back up energy sources in case of utility power shut down during emergencies. The currently available lithium-ion battery technologies provide a warranted life of around 10 years and considering the useful life of a PV system to be about 25~35 years, one should be prepared to change the battery couple of times during the lifetime of the PV system. Lithium-ion prices are expected to fall in the future and thus replacement of batteries will be cost effective. With increased penetration of intermittent renewable resources in the grid, comes the need for grid stabilization services, which may be able to be sold to the utility by owners of energy storage systems.
Electric Vehicle (EV) charging stations are an important factor to enlarge the electric grid and thus transfer vehicles from fossil fuel transport economy to a greener electric grid. Honolulu City Bill 25 signed into law June of 2020 requires every new home that is built from now on to be photovoltaic-ready, and that every new building have the infrastructure to support EV charging stations; new parking lots must have at least 25% of their stalls wired and ready to go. Hawaii Energy is also offering rebates for EV charging stations at any commercial facility or multi-unit dwelling with a limited-time rebate for all islands statewide.
About the Company
Greenpath Technologies, Inc is a renewable energy project developer and contractor in Hawaii since 2007. Greenpath is committed to helping Hawaii reach independence from fossil fuels by engaging the adoption of renewable energy systems and technologies. Greenpath delivers turnkey renewable energy projects with Photovoltaic Systems (PV), Battery Energy Storage Systems (BESS), and Electric Vehicle Charging Stations (EV) for its customers.
