Paradise for Renewables: Hawaiian Solar Schools RFP and Hawaii's Huge Renewable Potential

November 8, 2012

The combination of tropical sun, pleasant trade winds, spectacular geography, and a warm Polynesian culture makes Hawaii a paradise for visitors. But, for some of these same reasons, Hawaii is also a paradise for renewable energy development. An abundance of renewable resources like sun, wind, and geothermal heat, combined with by far the highest electric rates in the nation -- well above "grid parity" -- make Hawaii a premiere market for renewable energy developers.

Recognizing that its continued reliance on expensive, imported oil to generate most of the state's electricity is an economic Achille's heel, the transition to renewable energy has become a high priority of Hawaiian government. Hawaii's commitment to renewables was demonstrated most recently in last week's announcement from Hawaii's Department of Education that it will install solar panels on all 256 public schools in the state over the next five years. In order to address the challenges of financing such an ambitious goal, the plan calls for the solar panels to be owned and financed by the developer, with the schools purchasing the output of the solar panels under a long-term power purchase agreement. Hawaii anticipates that the plan will not only reduce the cost of power its schools by several million dollars a year, but could produce tens of millions of dollars in new revenue as excess power is sold on the local grid.

Similarly, Hawaiian Electric Company has a draft RFP for renewable energy in process, and is expected to issue a final RFP early next year.

The rapid growth of renewables in Hawaii is driven not only by economic necessity, but by strong public policies favoring development of renewable energy resources. For example, Hawaii has the nation's most aggressive Renewable Portfolio Standard, requiring 40% of the state's energy to be produced by renewable resources by 2030. In addition, Hawaii has a feed-in tariff, in addition to a variety of tax credits and loans aimed at encouraging solar and other renewable resources.

If you have any questions about the Hawaiian Department of Education's proposal, the Hawaiian Electric RFP, or any other matters concerning development of renewable energy, please contact a member of GTH's Energy, Telecommunications and Utilities practice group or Environment & Natural Resources practice group. These practice groups were recently recognized as among the best in the region. In addition, GTH Partner Jim Horne is licensed to practice in Hawaii.