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The Honolulu Advertiser
Posted on: Monday, June 25, 2001

Power-selling bill to become law

By Walter Wright
Advertiser Staff Writer

Gov. Ben Cayetano says he has decided to support a bill making Hawai'i the 35th state in the nation to allow customers with their own small electrical generating systems to sell power back to the electric company.

John Grandinetti of Grand Solar, Inc. shows off the sun's power using a large fresnel lens to burn a soda can in half at Bishop Museum.

Gregory Yamamoto • The Honolulu Advertiser

The legislation will be signed into law, Cayetano spokeswoman Kim Murakawa said.

Solar equipment power vendors at a Bishop Museum fair yesterday were abuzz with the news, and had varying opinions about whether net metering will make photovoltaic panels a cost-effective source of electricity in Hawai'i.

John Grandinetti of Grand Solar, Inc., thought not, and said he is focusing on solar hot water heating and on a solar powered system to purify drinking water in the Third World.

But Scott Sparkman of Mercury Solar said an investment plan he intends to offer to increase tax credits for photo-voltaic installations may make them feasible on the Neighbor Islands, where electricity costs almost three times the national average price, and about 50 percent more than on O'ahu.

An estimated 500 homes and farms in Hawai'i already use photovoltaic systems, which convert the sun's rays to usable energy, for some or all of their electricity needs.

"The people that could really benefit from this are people who are building a home that can incorporate photo-voltaic shingles or panels, or even a wind powered generation system," said State Rep. Hermina Morita, (D-12th, Kaua'i), who pushed for passage of the legislation.

The law allows customers to send any surplus energy from their own system back into the utility grid, causing their electric meter to run backward and reduce their electrical bill accordingly.

Hawaiian Electric Company said such systems most likely will reduce but not eliminate anyone's electric bill. It is highly unlikely that the small 10-kilowatt generating systems allowed under the bill would ever produce more electricity than a customer uses in a month, company spokesman Chuck Freedman said.

But if they did, users "could enter into a purchased power agreement with us to receive payment for the excess kilowatt-hours they delivered to the grid."

The bill recognizes solar, wind, bio-mass, and hydroelectric sources, alone or in combination.

In daylight hours, a photo-voltaic system may generate more power than a customer is using at that time. With net metering in effect, the meter would roll backward as the customer's excess generated electricity was fed back into the utility grid.

Otherwise, any electricity the customer could not use or store in expensive batteries would just go to waste.

One of the first to benefit from the new law will be Lana Plum of Kawaihae on the Big Island, who is about to build a 7.2 kilowatt photovoltaic system to help power her Plum Hall Inc. software company offices on the ground floor of her home. The system will cost $70,000, she said, but will be eligible for both federal and state tax credits for renewable energy installations.

Plum's contractor, Marco Mangelsdorf of ProVision Technologies, an Hawaiian Electrical Industries subsidiary in the photo-voltaic business, said he estimates Plum's system will pay for itself in nine years.

That is partly because electricity on the Big Island costs about 23 cents a kilowatt hour, compared to about 14 cents on O'ahu.

But Plum said the biggest payback for her company will be electrical system reliability essential to run her e-business, which operates primarily through computers on the Internet.

"The brownouts that we have experienced" in electrical service "have sometimes knocked us off the Internet for two days at a time," she said.

Correction: Hawaiian Electric Company believes the typical small photovoltaic system Hawai'i homeowners might buy to generate electricity at home will not produce more than the customer will use in a month. Because of a reporter's error, a different statement was posted in a previous version of this story