With Utility Rates at 42 cents/KWh on Oahu, Hawaii, LMI Community Seeks Lower Costs via Solar Microgrids

Sharlette Poe, executive director and CEO at L.E.I. Foundation is expected to be the first of many native Hawaiians in her 200-acre community–consiting mainly of lower and moderate income (LMI) residents–to receive a solar microgrid for her home at the end of August.

She can’t wait to realize what’s expected to be 50% savings plus resilience, she said.

Lower costs needed for native Hawaiians 

Reducing utility costs and achieving energy resilience is critical to the survival of her community, located in the Waiʻanae Valley, Poe said. Her community is home to many native Hawaiians who have lived there for seven generations.

The Wai'anae Valley has about 2,700 homes, many of which house multiple families and generations, and is subject to high winds and wildfires. Twenty-seven residents are affected by utility public safety power shutoffs (PSPS)  and some rely on  medical equipment powered by electricity, she said.

Poe’s foundation, which focuses on educating people about decarbonization and renewable energy, wants to make solar more accessible and affordable for areas with high rates of LMI residents. The foundation also has a larger goal of protecting natural resources and the area’s quality of life.

“How do we own our own power, how do we share it for resilience, health and safety and what does that look like in the long run?” she asked.

Three requests for proposals for solar, zero bids

Her efforts to reduce energy costs for native Hawaiians began when her foundation issued three requests for proposals over a three-year time period and received zero responses.

The problem: She was looking for standardized pricing for about 1,000 homes, but all the homes were different, with many too old to deploy solar on roofs.

Now, through a new program, “Utility Lite,” her community members plan to acquire solar microgrids through a power purchase agreement (PPA), paying no upfront costs and receiving one of a few microgrid options that involve new carports equipped with solar. With carports, there’s no need to upgrade roofs.

The program right now is only available to native Hawaiians living on Department of Hawaiian Home Lands property, 130,000 acres set aside for native Hawaiian families. 

PPA power expected to be about 50% lower than utility power

For a two-carport option, homeowners receive 9 kW of solar, a 40-kWh battery and an electric vehicle (EV) charger, according to AJ Perkins, architect of the Utility Lite model. They pay a flat rate of $300 a for 25 years, which amounts to 18 cents/kWh, over 50% less expensive than Hawaiian Electric’s 42 cents/kWh rate, he said.

The four-carport option provides 18 kW of solar and a 30-kWh battery with vehicle-to-grid capabilities, with a PPA payment of $500 a month. That compares to $1,300 utility bill from Hawaiian Electric, said Perkins.

In both cases, adding a propane fuel cell costs $150 extra and would likely be purchased by homeowners who have propane fuel tanks in their yards.

Utility Lite has nine contracts in place, along with a letter of intent for 120 systems in a community that is now being built, Perkins said.

Battery rebates and revenues through utility

Under the Utility Lite program, solar microgrids will be connected to the utility. Homeowners and businesses will benefit from a new Hawaiian Electric incentive, Bring Your Own Device Plus. Utility customers receive a $400/kW rebate for batteries, and LMI community members receive an $800 rebate.

Customers sell to Hawaiian Electric 70% of their battery capacity to the grid two hours a day, and are paid the retail cost of the power, in this case, about 42 cents/kWh, Perkins said.

“Now we have these battery assets that can support the grid and create a revenue model that goes back to these communities,” he said.

Utility Lite will invest portions of the revenues back to communities–generally community nonprofit organization and state workplace development efforts.

Some community members are expected to oversize their systems so they can use them to generate income and also support neighbors during outages, which is part of Hawaiian culture.

“Whenever there is a blackout, people give away ice to help neighbors preserve their food. Or they’ll get an ice machine. It’s not about money, it’s about taking care of their neighbors,” Perkins said.

Taking care of the land and the culture

Protecting and embracing that Hawaiian culture is the aim of Myron Thompson, a Hawaiian native, solar contractor and partner, along with Perkins and others, in Hawaii Pacific Alliance for Worldwide Advancement, a consortium that helps scale clean energy technologies. He’s in charge of funding the microgrids, and has an investor ready to fund about 1,000 systems, he said.

“We’re here to take care of the land and community,” he said. “It makes sense to not only provide solar, but serve the Hawaiian community in a large way.”

Serving the community will include creating resilience hubs in the coastline communities, said Poe. The first one, now being built, will be located at the Waiʻanae Coast Comprehensive Health Center operated by the  Department of Hawaii Home Lands.

Not only is it anticipated the Utility Lite model will help homeowners. Farms, businesses and local infrastructure could benefit from the model, said Keoni Ford, President, Dibshawaii, LLC, a business association.

"Dibshawaii and its association of local businesses and not-for-profit partners will be focusing on a carbon negative energy platform to educate, train, and develop people and places in the most vulnerable and diverse communities to transition to a clean and renewable energy future," he said.

Residents, too, are eager to move toward that clean energy transition.

“Many people have been waiting for a long time for this. We want survivability for our community by removing one of the highest costs for families and creating opportunities for them to benefit directly,” Poe said.