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MECO’s 15% Solar
Threshold Raises Questions

Updated 11:14 AM HST, July 18, 2012
Posted 05:35 PM HST, July 5, 2012

By Anne Rillero


Solar PV panels, installed on a Kula home, are highlighted in the last rays of sunset. Photo by Anne Rillero.

The sun has been shining – both literally and figuratively – on Maui’s rapidly growing solar photovoltaic industry, with more than 1,000 solar photovoltaic systems installed on Maui’s homes, businesses and government buildings in 2011.

“We’re on pace to beat that in 2012,” says Maui County Energy Commissioner Doug McLeod.

But the exponential growth has caused the industry to confront a “15% threshold” set by the Hawaii Public Utility Commission. The threshold essentially regulates how much power from small, individual solar and other renewable energy systems can be incorporated into Maui Electric Company’s grid through what’s known as “net energy metering.”

Net Energy Metering: Making Home Solar Easy

Net energy metering has allowed solar to be financially attractive to homeowners such as UH Maui professor Doug Rice.

After installing solar photovoltaic panels on his Pukalani home, Rice was, by his own admission, “a bit obsessive” about tracking their performance via an app on his smart phone. He found that even on cloudy days, his 22 panels produced more electricity than he and his wife required.

Through net energy metering, Rice’s surplus electricity is fed into MECO’s grid. At night, the couple draws their power from the grid. Their bill is calculated on the difference between the kilowatts they provide to MECO and those they draw out. For the Rice household, the net has been $0.

Success stories like Rice’s, coupled with generous state and federal tax credits, lower equipment costs, higher oil prices and third party “no money down” financing have led to the explosive growth of solar PV on Maui during the past five years.


Large-scale solar electric installations, including these panels on the Kahului Fire Station on Dairy Road, “count” towards the 15% circuit threshold set by Hawaii’s Public Utility Commission. Photo by Anne Rillero.

The 15% Cap

Unlike mainland locations that have large industrial sectors with significant daytime power requirements, Maui’s power needs are primarily residential, with peak usage in the evening.

“As long as we have a night peak in energy usage, solar alone can’t replace other sources of power on Maui,” says McLeod.

As a public utility, MECO is mandated to provide consistent, reliable power to all of its customers. Because solar, wind and other customer-sited “distributed generation” (DG) systems do not produce consistent power around the clock, Hawaii’s PUC has issued rules regarding DG systems, which on Maui are considered to be systems producing 100 kW or less.

Per the PUC rules, the total aggregate capacity of the net-metered DG systems on each of MECO’s circuits is limited to 15% of the peak circuit demand.

Hitting the Limit

MECO’s circuits in Lahaina, Olowalu, Kahului, Haiku and parts of Kihei have reached this 15% threshold, notes Kau’i Awai-Dickson, spokesperson for MECO. She advises customers in those areas who wish to install solar PV systems to apply for a free Supplemental Review by MECO.

“The threshold is not a limit or a cap,” she emphasizes. “It is simply a trigger for the utility to take a closer look at the system being proposed to ensure that by installing this system, we are not compromising the electrical service of other customers on the same circuit.”

The utility plans to install and evaluate two battery storage systems in central and south Maui, and is working on a smart grid project to help residents reduce energy consumption during periods of high demand, which could make room for more solar installations.

A Need for More Study?

Mark Duda_Portrait-SML (2)

Mark Duda, president of the Hawaii PV Coalition. Courtesy photo.

Solar advocates question whether the 15% threshold accurately reflects Maui’s actual power needs and solar production capabilities.

“The 15% threshold is a rule of thumb developed many years ago, before DG systems became popular,” explains Mark Duda of the Hawaii PV Coalition. He explains that new studies and actual rooftop performance data challenge assumptions behind the threshold.

“Hawaii’s PUC needs to rule that DG thresholds should be established on a systemic level through more study of how the power is generated and utilized,” he says. He points to the 2,000 to 3,000 workers who are employed full or part time to support the state’s solar industry as a compelling reason to reconsider the limits.

MECO recently launched an Integrated Resource Planning process involving stakeholders from all sectors of the community, to encourage discussion and evaluation on topics relating to clean energy, reports MECO’s Awai-Dickson.


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  • http://www.facebook.com/profile.php?id=100000394317279 Karen Chun

    Funny how MECO/HECO have no trouble integrating all these new huge windfarms that will raise our rates due to the profit that is paid to the producers (and MECO) but somehow, integrating PV that REDUCES our bills has hit the ceiling.

    Very, very suspicious.

  • Dakine

    Not only that, Karen, I have been approached by TWO companies, who are offering Solar Electric to customers WHO CANT get solar panels approved because of the cap, because they secured a sweatheart deals behind the scene where they install and own your solar system, and you buy the electric off your own solar panel array they installed at a reduced rate.  MECO buys the electricity from them cause they get it for a reduced rate than what normal customers would have to get paid for net metering.  Its really about money.  Solar is too good of a deal for customers and it cuts into MECOs bottom line.  So MECO cut a deal behind its customers backs to allow these companies to resell electricity.  Amazing.  Such bs.  Im really pissed about this.

    • richard emery

       I totally agree.

  • Guest

    The 15%  is a “safety” boundary line for power flow and distribution protection schemes.  Back feed from DG units (which in this case would be the panels on peoples homes)  can cause various problems to the grid and customers by reducing sensitivity of protection relays and even falsely trip relays based on the magnitude of the current and direction of the power flowing. Residential homes are setup on a radial circuit on the distribution side of the power system  so that power is flowing only in one direction. As more residential units install solar panels or other forms of DG a more complex protection scheme will be needed, such as those used on transmission systems where power flows in various directions depending on where the load is. Wind farms and large scale PV farms are allowed access to the grid because of where they are connecting into the grid, which is the transmission side. 

    • Cora Speck

      Thank you for your information, Guest. Here’s my question: Looking toward the future, what needs to happen to allow for more residential customers to utilize PV systems in a way that is safe? Does the grid need updating? What are other public utilities around the world doing to address these issues? Do we need to invest in newer technology? Change/implement new policies? Let’s keep the conversation headed in the right direction!

      • Guest

        There are many things that would need to happen but first and foremost
        yes, the grid will need updating in order to handle the fluctuations in
        power output from wind/pv systems and the various directions that power
        could flow. Being able to monitor power flow to and from houses is what
        is needed, which is what the goal of smart meters is trying to
        accomplish, much like the Synchrophasor technologies do for utilities. Much like relays in the substations, devices will need to be
        able to communicate with each other and send information to each other
        (i.e. voltage and current information) in order to be able to identify
        load requirements and more importantly a fault when it happens. The
        technology is out there, implementing it is a different story. The size
        and sensitivity of Maui or each of the islands grid in general can make it
        harder and costlier to do. It must be understood that nothing is wrong
        with the grid since it was reliable and stable. The introduction of
        unreliable sources makes the grid unstable. Making it able to adapt to
        become more dynamic is the problem.

        Germany would be a good reference for what other countries are doing
        since they lead the world with PV integration into the grid. Every
        power system needs to be analyzed before changes are made because in the
        power system everything coordinated precisely.

        • richard emery

          Maybe it does cause problems when you make too much  . but   the power company should have realized the problem 10 years ago. but they also wanted to make the dollars.  again just like everything else (  greed )

          • Guest

            Well now your just reaching for excuses. Ten years ago, Kaheawa Phase I was still in development, the government tax benefits for renewable energy did not happen till 2008, and solar panels are highly inefficient (the best solar panels available TODAY to the public barely reaches 22% MAX) for their cost, unless you have the government discount even to this day.

            I do agree they should have regulated who gets panels much more evenly, not first come first serve. But no one could have seen this coming. Mainland utilities face the same problem but have a much longer time till they reach this point as well, but because they operate on much grander scale in terms of grid size and power flow, what is considered high DG penetration on Maui’s scale is considered minimal DG penetration to them.

  • Rainman

    KC, with the completion of the Ulupalakua project the wind farms on Maui will be capable of producing over 1/3 of Maui’s energy demands.  You are mistaken if you think there will be no trouble integrating the fluctuations the changing wind will have on the island’s grid. 

  • Wants To Install PV

    It’s all about the money (MECO’S) If MECO’S grid and system is properly designed and built, it can handle way more then 15% per circuit. Why hasn’t MECO built battery storage systems? Because there is no money in that.  What you have is a natural conflict, MECO who’s business is to generate electricity and sell it, and the general public who want to install PV and not pay MECO money. How could that ever work in favor of the consumer?

    • Dakine

      Exactly!  They have a PUC related  monopoly, but yet are acting like a free market profit making business.  Im sorry, but, if you want free market profit making be your priority, you lose your monopoly status and let other companies come to Maui do what your unwilling to do and see how long you last.    Pushing a 15% cap is outrageous considering how much we depend on foreign oil.  If the entire island was on a solar grid, and MECO stored the the excesses power they could probably cover the night time uses with just battery power, and a backup diesel in case there were long periods no wind and sun.  Their costs would be lower.  Our costs would be lower.  Everyone wins.  BUT, in doing so, their profits would be lower as they make more money the higher the costs go.  BUT, thats too bad.  They are a monopoly serving the public.

      • Guest

        While battery banks can be used to aid in the fluctuations caused by
        wind/solar, they are expensive, high maintenance, and have a short life
        span (in terms of the grid). The battery technology is not quite there
        yet for it to be very economical for the size required to support the
        grid. The way I see it is why would MECO build a battery bank if there
        grid was stable before the introduction of the solar/wind systems,
        shouldn’t those making the system unstable pay that price?  You are also
        simplifying the “equation” too much. A diesel generator is far from
        what the generators that MECO uses to power your lights. Turning on a
        generator is not the same as your backyard generator.  There are steps
        that must be taken in order to connect back into the grid, most
        generators take close to 45 mins before they can be connected back into
        the grid. There are more important problems
        that are much more prevalent from an power engineering stand point with
        solar pv integration than whose losing the most money.

        • Dugdoit

          How come Kauai does not have this problem and does not have the saturation restriction???

          • Guest

             Kauai has this problem and so does every other utility in the world, and
            they do have a DG penetration limit. But the majority of Kauai’s solar
            power that I assume you are referring to comes in the form of solar
            farms. These are “easier” to monitor than residential roof-top  grid
            tied solar panels because they are designed as generation plants. I
            assume there is a tie-in substation at each solar farm, much like
            Kaheawa substation does for the wind farm, where the utility can monitor
            the power entering the grid through the substation. What the utilities
            are monitoring is their “Power Factor”, which is the relationship
            of Apparent Power (total power measured in KVA), Real Power ( measured
            in KW), and Reactive Power (measured in KVAR) (For better understanding
            Google “Power Triangle” or “Power Factor”). For grids to remain stable
            and be efficient, most utilities set a power factor of about .90-95,
            meaning that 90 to 95% of the TOTAL POWER (KVA) produced will be real
            power (KW) and therefore the most efficient and economical for the fuel
            being used (since 100% efficiency is impossible). Now, rooftop panels
            have no metering that can be relayed back to the utility so the
            utilities have no way of knowing how much power is being supplied to the
            grid and therefore they have no idea about the stability of the grid.
            Solar panels provide real power (since it produces DC power) and most
            inverters do not provide reactive power, therefore residents with solar
            panels are using real power from the panels but reactive power from the
            grid. This now means that the utilities generators are producing more
            reactive power than real power and this is not good for the generator or
            the utility. Each grid penetration limits are set by the size of the
            grid, to some extent location of loads and
            generation, and the equipment on the grid. But as stated in the article,
            the 15% is merely a caution signal. Meaning they are getting close to
            the limit but exactly how much will be determined must be determined
            from a grid

          • Wants To Install PV

             I assume you are a MECO employee “Guest”. So where is the “Grid analysis”, why has it not been done? Why hasn’t MECO up-graded the grid to effectively handle as much PV as possible? We all know the answers, MECO has no interest in doing anything to promote the installation of more PV. Why would any company invest in anything that decreases their revenue? In all fairness MECO can’t be expected to do that, but since it is what’s best long term for Maui and our environment, the PUC must make them do it. So then the real question becomes who is going to pay for it? Not MECO of course, but a combination of State and Federal funds could be used to finance the grid up-grade, battery storage systems, etc. with the long term goal of PV panels on virtually all homes and businesses on Maui. MECO would not need to produce nearly as much electricity and would generate their revenues from maintaining the grid and systems. It would still be a solid business, just a different kind of business. Just think what could have been done if the US government had invested the 535 million it gave Solyndra, into Maui’s electric grid? Long term a way better investment. There are answers and solutions out there to do the right thing for Maui’s future, letting MECO decide is not one of them.  

          • Guest

             Nope wrong assumption, not an employee nor any affiliation to MECO. I have a degree in power and I work as a consultant to various utilities. In
            fact the company I work for had a bid to do the grid analysis on Maui,
            we did not get it but it is getting DONE as far as I know.

            All this crying and complaining about what the utility is
            or isn’t doing is useless because most people do
            not seem to know what the problem is, how to fix it or how a power grid
            works at all.  MECO is bound by the law and utility regulations to provide safe and reliable power, while try to keep up and follow the renewable initiatives but in place by the government.  They are already conducting test with the smart meters,
            which is a step in the right direction because they can relay power 
            information to the utility. However, look how much people are fighting
            that. All everyone is doing is blaming the utility because they
            can’t do what they want, when they want. People need to realize that
            this “problem” wont go away this year or even next year, because there
            is no quick , immediate and easy solution that alleviate these DG limit issues. It will take years for changes and
            upgrades to happen and then people can find
            something else to complain about.

             I agree that on the long term it is a better investment, that is what needs to
            happen and is happening. I am not arguing that it shouldn’t happen. All I
            am doing is explaining why from a engineering and mathematical
            perspective why residents  currently can’t get solar panels when they want to
            anymore.  And I agree that  Utilities will become more of asset
            management companies or holding companies. But as far being a solid business, that could be questionable..

          • Guest

            People waiting to get solar panels connected may want to just think about going off the electrical grid entirely.  If I were in the position to get solar power were MECO told me that I’d have to wait to get my solar panels connected/working I would just tell MECO to disconnect my service/wires connected to my house and then I would get a battery backup system connected to my solar panel system.  People who have solar PUC pannels don’t need MECO at all with this setup.  There’s no law that says you have to be connected to the electrical grid.

          • Dakine

            Does a HYBRID system exist?  

            What I would like to do, is have the battery bank available to me to store my solar energy, which I will draw upon.  But, if the power in my battery system gets depleted because of too many cloudy days, I would want my house to switch over to MECO as my back up.  So, I would never be net metering back to MECO, but I would only use them when I need them.  

            Does such a system exist? What is it called?  What do I need to do to do this?

          • Guest

             Yeah you are right and I agree about disconnecting from the grid, it just seems people that are complaining want to have their cake and eat it too. But that setup is doable (space and money allowed) and many of the solar companies on Maui offer those kind of packages if I’m not mistaken. Usually a system like that also works much better with a wind turbine as well, since you would be getting energy from two sources and there are better odds that at least one of the two sources would be available.

             And as far as the hybrid system, I have thought and personally researched that before. I think it theoretically could work, with an auto-transfer switch and some controllers. I would think that some load data specific to your house would be needed because the batteries and solar panels could be used as a source only if it meets all the load requirements in the house and so each houses load would need to be identified. There could be some surge issues when transferring  from one source to the other. But definitely something to look into…

          • Dugdoit

            Yes, it does. Outback makes and inverter that will not let electricity go back into the grid but you can have the grid for backup if your batteries are drained

          • JSantos

            Worse.  He is a MECO apologist.

          • Guest

            MECO apologist? Just an engineer trying to teach the cry babies why they can’t get their way. I’m not defending no one anyone. Math is fact, their is no biasing in the numbers. I don’t have to defend anything, the logic and power system does it all. I’m just explaining the numbers because I assume most people never went to school for power engineering. If you read my post you have seen that I  agree that changes need to happen within the grid.   You sound like another high maka maka idiot who thinks they have
            everyone and everything figured out with the answer to everything.

          • Wants To Install PV

            Cry Babies that can’t get their way? The “Cry Babies” are the ones trying to do what’s right for Maui and our environment. You are standing up for a large public utility whose interest is in making money, not what’s best for Maui. Don’t even go to the “Cry Babies” are just trying to save money. It’s much more then that, in my case the system is quoted at 36K, it would take me over 81/2 years just to break even! Most wouldn’t call that a blue chip investment. What this is all about is MECO and their foot dragging, delaying, stone walling tactics.

            The grid analysis, system up-grades, etc. should have been completed long ago, they knew 10 years ago that PV was coming and Maui was a natural for it. But the real failure is the PUC, who appear to be much more interested in protecting MECO, then protecting the residents of Maui. Why didn’t they long ago demand that MECO prepare their systems for PV? You can’t expect MECO to do it on their own in a timely fashion, it is not in their best interest for their bottom line. That’s why we have the PUC, years ago they should have told MECO, “Get your house in order for PV”. You can talk about Engineering  and Math all day long, but it’s just an excuse for being a day late and a dollar short.

            I respect your knowledge on the subject and I do not have all the answers to everything, but I do think it’s very unfortunate that it has really come to a grinding halt. I agree with one of your earlier posts regarding Smart Meters, but it’s just another example of being way behind the power curve. In Europe by the end of 2008 they had an installed base of 39 million units. Us? It’s the middle of 2012 and we are just starting a small test. It is however a perfect example of what the problem is…     

          • Guest

            Bottom line is, I agree that the changes need to happen. I’m not trying to provide an excuse for MECO because I don’t know their agenda and I agree that they are behind the curve.  Nor am I defending MECO about their lack of upgrades, especially because in my line of work our income comes from  utilities when they make upgrades and changes, so of course I want ALL grids and technology to develop and progress to be made be. If anything I’m trying to direct the questions in the positive direction through education of the current system, because  now there is only the future to focus on. You are right about the PUC and I agree that they need make a better push for advancements. And these advancements also need to start in Washington, because the entire U.S is behind. But from an engineering standpoint Hawaii in general has advanced grids and the potential to lead the nation in new technologies. And I agree that the current math and engineering of the grid is an example of being behind, but that is that, you cannot argue with what is existing. You can make sure that things will progress in the right direction by understanding the problem and therefore the right solution can be found…

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