Business Energy Guide 2011
Save Energy, Save Money
(page 1 of 2)
Sunetric employees install solar panels.
Swapping old light bulbs for CFLs. Servicing air-conditioning systems for optimal efficiency. Changing to solar water heaters and Energy STAR refrigerators for hot-water and refrigeration costs. If you are a business owner in Hawaii, these are likely on your “To Do” or “Done” list to reduce your business energy costs for 2011.
Now is also the time to look into more utility savings options, government tax credits and new options in renewable-energy systems that not only save money, but help make money as well. Local energy experts agree that, while 2010 was a banner year for energy efficiency and alternative-energy growth in Hawaii, 2011 is shaping up to be even bigger.
“We will see across-the-board growth in clean-energy projects, because Hawaii is the place to do it,” says energy administrator Ted Peck, of the state Department of Business, Economic Development and Tourism. He projects $1.2 billion in clean-energy investments in the state in 2011, a four-fold increase since 2009. This increase is a result of groundwork following the Hawaii Clean Energy Initiative of 2008, the first of its kind in the nation. A joint venture by the state of Hawaii and the U.S. Department of Energy, the CEI’s goal is to have 70 percent or more of Hawaii’s energy needs provided from efficiency measures (30 percent) and locally generated renewable sources (40 percent), including solar, oceanic, geothermal and wind. The partnership engages a range of private-sector companies, from representatives of the solar industry to utilities that provide the bulk of renewable-energy sources, as well as a number of county, state and federal agencies, to achieve its ambitious goals.
Ted Peck, DBEDT Energy Administrator
“Hawaii is about to enter a period of impressive growth and development in clean energy,” says Peck. The nation and the world are watching, says Chris DeBone, the managing partner at Hawaii Energy Connection, a locally-owned solar integration company dedicated to affordable solar solutions since 2007.
“Governments and utilities nationally and worldwide are looking to Hawaii as a test bed for how to deal with the adoption of renewable energy,” says DeBone. Our island state has unique energy production, variability and distribution challenges that drive up the cost of electricity to both commercial and residential users. If Hawaii can do it, the nation and the world may follow.
Every business and commercial-property owner contributes to this new energy landscape by the energy-efficiency and renewable-energy options they choose to incorporate in work environments and buildings. Navigating this changing landscape of business energy, however, will take careful planning and diligent research because of the potentially significant costs involved, the ever-increasing options in new technologies and financing, and the time limits on certain tax offsets, rebates and other attractive financial incentives. Stabilizing the cost of energy to run businesses is key for Hawaii, according to energy experts. The good news is that there are resources to help the business owner as never before.
Public and Utility Energy Initiatives
DBEDT’s Peck believes that energy can be an economic driver for Hawaii in this emerging energy landscape. That would be a seismic change for a state that has historically relied on imported fossil fuel for 90 percent of its energy use, and has consistently had the nation’s highest electricity rates. According to Peck, the Clean Energy Initiative has attracted interest and investment by the U.S. Departments of Energy, Agriculture and Defense, as well as Taiwan, Japan and South Korea.
In partnership with the U.S. Department of Energy, the state has three integrated bio-refinery projects in the works. In November 2010, the federal government awarded DBEDT a $1.2 million grant to build energy-storage systems. These systems will allow electric utilities on all islands to accept more renewable energy by helping smooth out the ebb and flow of electricity to the grid from non-firm renewable sources, such as solar and wind. New kinds of energy products, such as animal feed and ammonia, with potential for export are also being explored by the state.
“If we do it right, people will be astounded by the possibilities of clean-energy projects with the potential for enabling us to export some of the energy products,” says Peck.
Businesses should consider gas for energy savings, says Jeffrey Kissel, president and chief executive officer for The Gas Co. Gas can be nearly three times more efficient for heating water for industrial use and for backing up solar water heating. Hotels, food and laundry-service businesses save money – and energy – by using gas for cooking and drying laundry (think of all the tablecloths, dish cloths, bedding and clothing). The Gas Co. currently serves the energy needs of 28,000 commercial and residential customers using a 1,100-mile pipeline on Oahu. It also supplies propane to 40,000 customers.
“World energy prices are likely to rise as economic conditions improve and drive demand,” says Kissel. The Gas Co. is jumping into sustainability by developing processes to convert renewable-energy sources to produce synthetic natural gas (SNG) virtually identical to natural gas found and used worldwide. The company has commissioned a first-ever pilot plant to begin using plant-based oils and animal fat to produce an initial target of 5 percent of its SNG supply with renewable feedstock sources for Honolulu. If the plant proves successful, the company hopes to expand the pilot and ramp up production in coming years, Kissel adds.
Jeffrey Kissel, president and CEO,
The pilot SNG project at Campbell Industrial Park has the potential of providing an economic boost to Hawaii’s agricultural industry and generate a whole new source of economic revenue for our community, says Kissel. Currently, agricultural waste products, such as fiber from sugar, beef tallow or fat, cane stalks or aquaculture waste, incur costs for farmers to haul them away or create issues for global warming in decomposing. The plant turns these waste materials into new revenue streams for farmers, and new sources of energy for Hawaii.
“We are also supporting General Motors’ introduction of hydrogen-powered fuel-cell vehicles with the hydrogen gas we already produce at our plant,” says Kissel. In December 2010, The Gas Co.’s partnership with the automaker was joined by 10 other organizations, including the University of Hawaii, to support the integration of hydrogen as an alternative fuel source for vehicles in Hawaii. GM’s hydrogen-powered vehicles are projected to hit the roads in 2015, with 20 to 25 hydrogen stations to be installed on Oahu at stations run by existing gas-station operators. This will make The Gas Co. the first utility in the country to supply hydrogen fuel for vehicles.
Serving five islands in the state, Hawaiian Electric Co. is Hawaii’s largest electricity provider and a key player in the state’s Clean Energy Initiative. HECO believes the biggest development in 2011 will be the continued increase in renewable-energy use by both HECO and the business community, says vice president of customer service Dave Waller.
“Reliability is at the core of our business. Our customers need steady and consistent electricity they can count on,” says Waller of the utility’s plans to accelerate its renewable-energy sources in 2011. In the works are plans to convert HECO’s 110-megawatt power plant at Campbell Industrial Park and the Maalaea power plant on Maui to biofuel use. HECO is also testing biofuel use at existing power plants at Kahe Point and Waiau.
Photo: David Croxford
HECO is also an active participant in the state’s ambitious wind-energy plan to deliver electricity from wind farms on Maui, Molokai or/or Lanai, or all three islands, via undersea cable. The project’s environmental study is targeted for completion in 2012. HECO is also working on an electric-vehicle rate structure in anticipation of EV sales, and Waller’s department is working on Ke Ala Hou, a complete refreshing of its customer-information system to better serve commercial and residential customers.
For HECO’s solar-energy customers with photovoltaic (PV) systems, net metering began in 2008, says Waller. The consumer-based, renewable-energy initiative of the Federal Energy Policy Act of 2005 required all utilities, including HECO, to establish net metering. Net metering means that businesses or residents with a renewable-energy system interconnected to HECO’s grid can receive credit for the excess electricity their systems produce to offset electricity billing period expenses; in essence, spinning the meter backwards.
Dave Waller, VP of customer service, HECO
Feed-in tariffs (FIT) will be the big issue for commercial PV owners on the grid, say solar-energy experts, with 2011 being the first full year of the policy’s implementation, following its establishment by the Hawaii Public Utilities Commission in 2009. FIT mandates that regional electricity utilities purchase renewable energy from eligible Hawaii companies, thus enabling them to make money from the electricity they produce from their PV systems.
Waller is confident that FIT will take off in Hawaii. HECO is watching carefully, with “a lot to learn” on how the FIT process will affect the stability of the electricity delivered on the grid for all customers. The rates for feed-in tariff, schedule and standard-interconnection agreements were approved in October 2010. Qualified projects will receive a fixed rate over a 20-year contract, with three different rate tiers based on technology and system size.
Maximum caps on system size are set to ensure stable electricity generation and vary by island and technology, with some areas on Oahu already reaching the saturation point for the cap maximum. “The pressure for growth access (on the grid for the feed-in tariff) is across all three tiers, with commercial having the most concern,” says Mark Duda, president of Hawaii Solar Energy Association and principal for RevoluSun, a Hawaii-based company specializing in residential and commercial-scale distributed renewable-energy projects.
Do you like what you read? Subscribe to Hawaii Business Magazine »