I took some time off last week to recharge my battery and relax on the island of Kauai, Hawaii's northernmost and geologically oldest island.

When I wasn't out riding the big waves, I noticed a few commercial solar installations and an occasional solar installer truck, and ultimately ended up doing a little work on my vacation, looking into the state of solar on one of Hawaii's islands.  My suspicion was that with ample sun and high electricity rates, solar power would be a no-brainer on the Garden Isle (population: about 65,000 in 2009).

I was wrong.

It turns out that despite extremely high electricity rates and even taking into consideration the plummeting cost of solar modules, upfront costs remain a challenge in a state not served by a solar leasing outfit like SolarCity or SunRun or Sungevity.  There's also the pesky problem of shady palm trees.   

I spoke with Jim Psaila, a co-founder at one of Kauai's small solar installation companies, XMX Power.  We discussed the unique challenges of installing solar on an island in the Pacific with an ailing economy. 

KIUC, the island's utility cooperative, has the following electricity rates, according to XMX:

That's $0.35 per kW-hr, up 59 percent in the last year.  The utility does not have widespread net metering. 

Without a leasing entity or a PACE program, solar won't come easy, because "nobody has any money," according to Psaila.  This bleak outlook comes despite the 30 percent federal investment tax credit and the 35 percent state tax credit for solar projects.

From a technical standpoint, an island has other concerns, as well. "Our air is full of salt," said Psaila.  This means extra precautions have to be taken in mounting and installation; extra sealant has to be used on grounding lugs and there is "less liberty with inverters."  Note that the company offers a life cycle projection of 20 years because of the difficult environmental conditions, in contrast to 25 years on the mainland.

Commercial Solar Installations on the Island

The Hawaii Clean Energy Initiative has a stated goal of having 70 percent of Hawaii’s energy come from clean sources by the year 2030.

Kauai's Lihu‘e Airport has a solar installation that was installed and managed by Hoku Solar, a subsidiary of Hoku Scientific (NASDAQ: HOKU).  Funding for the project was provided by Hoku Solar and United Fund Advisors through its renewable energy fund with U.S. Bancorp Community Development Corporation.  Sennet Capital of Honolulu arranged and structured the financing for the project.  Hoku is everyone's favorite went-public-as-a-fuel-cell-company-tried-being-a-polysilicon-manufacturer-and-is-now-financing-solar-projects company.

Other Hawaiian photovoltaic installations include: Kona International Airport at Keahole, Hilo International Airport, Kahului Airport hangar and cargo building, the DOT Highways Division Baseyard in Lihu‘e, and the Nawailwili Harbor DOT Administration building.

There are also plans to build a 10-megawatt concentrated solar thermal power plant on 100 acres of “sub-optimal” Kauai farmland between Waimea and Kekaha.



Aloha and mahalo for reading.