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Maui PV Plan Lights Path to Future

Energy commissioner connects contractors and lowers electric bills through county solar systems power purchase agreement.

June 9, 2011
Trisha Smith

Solar industry experts on Maui have predicted that 2011 will continue to bring together the reduction of system costs, attractive tax incentives and rising energy costs, with an increasing amount of residential and business owners investing in photovoltaic (PV) systems and other storage systems.

According to Maui Electric Company (MECO), the county’s electric bill exceeds $25 million yearly to keep building operations running, and with last year’s Cost of Government Commission setting a goal to save over $1.5 million annually, county officials were faced with the jolting reality that 2011 is the final year of the federal stimulus package that offers money back on 30 percent of the system’s costs.

As new county administration members settle comfortably into their roles, an increasing number of leaders are going forward with projects that they—or previous officials—have worked passionately to implement or push through. A recent plan to solicit contractors to install over 1,000 photovoltaic (PV) panels atop 24 buildings across Maui County hopes to significantly cut overall electrical costs and create millions of dollars in construction jobs. Contractors can take advantage of the discount on PV units through the year. The plan requires companies to be licensed in the state.

Article Photos

Radiant energy. The photovoltaic experts at Rising Sun Solar installed this 50kW system for Central Maui Self-Storage on a circuit system, which is now at/approaching the 15 percent capacity limit. Energy Commissioner Doug McLeod hoped to include the police station nearby in the current Request for Proposals bid, but limits to the circuit forbid it. Regarding other police departments, McLeod said the future Kīhei station is part of a separate PV project, and there are currently proposals in the works for Ha‘ikū.

Photo: Alberto Bresson, Rising Sun Solar

Maui County is accepting requests for proposals (RFP) for the “furnishing, delivery, installation, operation and maintenance of solar photovoltaic systems selling electricity to the county under a power purchase agreement (PPA) to Maui’s Office of Economic Development.”

Maui County Energy Commissioner Doug McLeod is helping head technical aspects of the RFP process. He looks forward to advancing what leaders before him—such as former Energy Commissioner Victor Reyes—worked toward during past administrations. The PPA process was previously suggested by the Cost of Government Commission as well, and used by the state on a number of projects, according to McLeod.

“We have set aside one contract for the four sites as a way to make sure local companies would have a manageable size of project,” said McLeod. “There will be a second contract awarded for the other 20 sites.”

They have already had a lot of interest from vendors over the last few weeks, spending several days already in the field doing walkthrough inspections, said McLeod on Friday, June 3. “We have averaged 15 contractors per site.”

Energy experts said the PPA allows the county to establish beforehand the amount of power and what it will cost, regardless of fluctuating oil prices. Tax credits are not applicable to governmental sectors, yet private companies can utilize them and charge Maui County electrical fees that will remain much smaller than MECO rates.

“Our project is about getting something done now, while the tax credits are available, said McLeod. “We are planning additional projects for wind and eventually for ground-mounted solar.”

Although there are hopes that smaller businesses participate in this process, “I think that the award will go to a larger non-Hawai‘i based company,” said Rising Sun Solar President Brad Albert, who said Rising Sun Solar will “probably not” bid on these projects. “I think they’re trying to allow a smaller company to bid a smaller scope of work. Conceptually this is a good idea, but the way it is broken up it is not a great opportunity as we see it.”

Solar experts such Clean Energy Maui CEO and Maui Weekly Columnist Chris Mentzel applauded McLeod and company for their efforts in this county solar plan, an initiative he has been suggesting “for awhile now.”

“If it all works out, it is a job very well done,” said Mentzel, a Maui resident whose native country of Germany remains the world leader in solar power systems. “I’m just glad it’s out there now and proud of Doug. He’s a ‘doer’—a man who will make things happen in renewable energy, I believe.”

According to Mentzel, a PPA—in latent terms—would involve the county awarding the winning company space on the roof, with contractors then seeking monetary backing through a bank or financial system. Companies can enjoy the 35 percent state and 30 percent federal tax credit through 2011, and be able to sell a reduced amount of power to Maui County under the PPA and using programs such as the Feed In Tariff (FIT). The county never owns the building, although McLeod said they plan to own the systems within the next two decades.

“I think the biggest issue is financing,” said Mentzel. “I have some ideas I will reveal soon to fix the financing situation, and what government could do….”

Regarding 24 sites listed, the highway baseyards (Lahaina, Läna‘i, Makawao, Wailuku) are for the Department of Public Works Division and are bid as a package of four. Then, the remainder is bid on as a package of 20 sites under a separate contract—most likely awarded to one large company.

“The timing is very short and it is probably not feasible to meet the deadlines,” said Albert.

The deadline is set at Monday, June 20, at 4 p.m. to submit the one-page qualification form, followed by a Wednesday, June 29, due date for proposal submission.

Proposals will be reviewed by a county committee consisting of Department of Public Works Director David Goode, Department of Environmental Management Director Kyle Ginoza and County Energy Coordinator Kal Kobayashi.



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